The use of government-issued New Market Tax Credits will bring Whitewater a Fairfield Inn and a building for the existing local campus to lease. Proponents of an ordinary hotel and a lease agreement for the university cannot offer any evidence that these projects will boost local individual or household incomes.
What one can show – now – is that the New Market Tax Credit program has been a federal failure. Nicole Kaeding explains New Market Tax Credits Fail to Deliver:
Created in 2000 as part of the Community Renewal Tax Relief Act, the federal New Markets Tax Credit (NMTC) program provides tax credits to “spur new or increased investments into operating businesses and real estate projects in low-income areas.” Two new reports [in 2014], one from the Government Accountability Office (GAO) and the second from [then] Senator Tom Coburn’s office, question the effectiveness of NMTC in accomplishing that goal.
The program provides tax credits to investors in low-income neighborhood development projects equaling 39 percent of the investment value over seven years. For example, a $1 million investment provides a $390,000 tax credit to the investor—a healthy sum. Congress has provided $40 billion in tax credits since 2003 with banks and other financial institutions receiving “nearly 40 percent of all NMTC[s]” since 2007.
But the program’s structure is flawed. According to GAO, the Treasury Department—which oversees the program—does not have adequate oversight of the program. For instance, the Treasury is unable to determine if a project has failed even after receiving seven years of tax credits. Treasury’s reporting on numerous aspects of the program is incomplete and missing.
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Unfortunately, these reports are not the first to document the NMTC program’s failings. GAO has issuance reports in 2004, 2007, and 2010 highlighting the program’s numerous flaws. Yet, Congress continues to reauthorize the program wasting billions of dollars.
A local story about the hotel and ‘community engagement’ center’s groundbreaking is unintentionally embarrassing —
Paltry Attendance. The Daily Union‘s stringer – because the publisher doesn’t seem to think Whitewater’s worth a dedicated reporter – writes that“The ceremony, which drew about 75 people, was held under a tent set up on the future hotel site. Attending were UW-Whitewater officials, city and regional governmental representatives, members of the construction and contracting firms involved with the project and four elected officials from the county and state levels.”
Whitewater has 14,622 residents, but only 75 were at the groundbreaking for a community engagement center. With only one-half-of-one-percent of the local population in attendance, one can guess that Whitewater’s not that engaged at this time. Chancellor Kopper and university public relations flack Sara Kuhl have their work cut out for them.
(Kuhl will have to do better than the typical no comment/still reviewing via email she’s used in a recent campus assault case if she wants to turn around the lack of enthusiasm for community engagement. Kopper has no one in media relations who’s useful for more than tired boilerplate.)
Ray Cross, Man of Platitudes. Ray Cross, president of the UW System, had this to say:Beginning his remarks, UW System President Cross pointed to the ceremonial hardhats and shovels near the tent for the groundbreaking.
“Those are symbolic of what we are doing — we are breaking ground on building a new partnership,” he said. “It is a mutually-beneficial partnership, and we all win from that. We appreciate the leadership and the campus for making this happen. On behalf of the Board of Regents, it is my pleasure to congratulate you.”
Cross said that Fairfield Inn & Suites was “making a bold move, but a good move,” jesting that “I hope you make a lot of money.”
Ceremonial hardhats and shovels as symbolic of construction – honest to goodness, does Cross think his audience needed a reminder of the symbolism? (Next up: Cross explains to Whitewater’s officials that a red octagon symbolizes a need to stop moving forward.)
“New partnership….mutually-beneficial partnership….we all win from that” – it’s the jargon of a statist official traveling about likely saying the same words for any occasion. Small wonder he’s lasted so well under this state administration.
By the way, it’s too funny that Cross thinks an average hotel in Whitewater is a “bold move” – it’s more subtle than saying ‘I’m surprised you yokels are getting even an ordinary hotel,’ but it amounts to the same thing.
Cross isn’t clever enough (or disciplined enough) to check his condescension in front of his own audience.
The Key Question. How will these millions in tax credits for a hotel and leased university space improve the individual and household incomes of Whitewater’s residents?