Preserve Historic Tax Credit (Editorial)

Everyone has a favorite government program that under no circumstances should be cut because it helps the right kind of folks, whoever those folks might be.

But almost everyone also agrees the federal tax code is too complicated, burdened with deductions and loopholes and tax credits, and that it should be simplified. Congress is ostensibly trying to do that while also cutting taxes.

One of the tax credits in its crosshairs is the historic tax credit, which developers and historic preservationists across Arkansas have made excellent use of not only to preserve important historic structures but to stimulate development. (See our cover story this week, Tax Reform Poses Threat to Historic Preservation Program.)

And they want to continue to be able to use it, as Al Rajabi, who heads the company that bought the Arlington Resort Hotel & Spa in July, made clear. He says the tax credit is a big component of his plans to renovate the beloved landmark.

Historic rehabilitation projects “are catalytic and game-changers for the sections of town where they occur,” Rajabi says. “The HTC is, hands down, the largest contribution to historic preservation in our nation, and it is market driven, bringing outside private investment into local development.”

He’s right. The projects undertaken by developers like Moses Tucker in Little Rock and many others throughout the state have attracted other private investment, building momentum that in turn sparks more development, bringing jobs and generating tax revenue.

And that is, perhaps, the strongest argument for continuation of the program, praised by President Reagan of hallowed memory: As U.S. Rep. Bruce Westerman, who’s working to preserve the tax credit, says, the program should be viewed “as a strategic investment,” one that sees a return “of more than $1.20 for every dollar credited.”

The historic tax credit return on investment alone justifies its retention.