Support for Preserving LIHTC from Tax Reform Surfaces
On July 24, the Cleveland Plain Dealer’s Editorial Board wrote an op-ed supporting the Low-Income Housing Tax Credit (LIHTC). This op-ed was in response to Congressional efforts to reform the tax code. On June 27, Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Orrin Hatch (R-Utah) had proposed a “blank-slate” approach as a legislative starting point for tax reform and called on Senate colleagues to provide proposals for tax expenditures to add back and improve in a reformed tax code.
“Over the past three years, the Finance Committee has been working hard on tax reform on a bipartisan basis. We’ve held more than 30 hearings and heard from hundreds of experts on reforming the tax code,” the senators wrote in a letter to their colleagues. “We’re now entering the home stretch. We need your input and partnership to get tax reform over the finish line.”
In an effort to develop the foundation for tax reform legislation, Senators Baucus and Hatch called on all senators to submit legislative language or detailed proposals for what tax expenditures and other provisions should be added back to a reformed code. The senators stressed that tax expenditures and other provisions should be added back only if they: help grow the economy, make the tax code fairer, or effectively promote other important policy objectives. This plan effectively meant that the Senate Finance Committee would approach tax reform with all tax credits, including the low-income housing tax credit, as eliminated from the tax code.
The op-ed pointed out that in Ohio, the LIHTC program has helped finance more than 100,000 affordable-housing units for working families, the elderly, the disabled, the homeless, and veterans. And its estimated economic impact in Ohio for fiscal years 2011 and 2012 was significant: the development of 4,608 affordable-housing units and the creation of 5,348 jobs paying $386.8 million in wages and salaries, according to a study commissioned by Ohio Housing Finance Agency.
The op-ed also pointed out that while simplifying the U.S. tax code is a worthy and overdue project, the LIHTC, “with its long record of success and critical public purpose, should lead the list of tax credits allowed into the revamped legislation.”
This local outreach and demonstration of the positive effects of the LIHTC may be important in the effort to preserve the low-income housing tax credit program. It’s anticipated that Ohio’s Congressional delegation will play an important role in tax reform. Both Senators Rob Portman (R-OH) and Sherrod Brown (D-OH) are on the Senate Finance Committee, with Portman spending time during President Bush’s term as the head of the Office of Management and Budget. Also, House Speaker John Boehner is from southwest Ohio, and the Chairman of the Select Revenues subcommittee, Pat Tibiri, is from the Columbus area. Rep. Jim Renacci, whose district covers northeast Ohio, is also on the Ways and Means Committee.