GOP Budget Proposal Puts NMTC on Chopping Block
The proposed GOP FY-2012 budget resolution released last week proposes a number of cuts and policy option to cut discretionary. The section of the budget pertaining to Function 450 (Community and Regional Development) beginning on page 89 (97 of the .pdf) of proposed Concurrent Resolution on the Budget Fiscal Year 2012 notes:
“At a time when shrinking spending is imperative for the government’s fiscal well-being, this resolution recommends taking a hard look at community and regional programs; focusing on those that deliver funds for non-core Federal government functions; and consolidating, streamlining and jettisoning wherever possible. Among programs that should be considered in this review are the following:
The Community Development Financial Institutions [CDFI] Fund. The main purpose of the CDFI, which is in the Department of the Treasury, is to direct funding to a range of financial institutions to assist with community development. Spending for CDFI has grown 43 percent since 2008, there is overlap with CDFI in other areas of the government, and the core purpose of the program is increasingly hard to define. Its New Markets Tax Credit Program, designed to spur private capital investment in low-income areas, has financed development in luxury hotels, condominiums, and other projects for financial institutions such as The Blackstone Group, Goldman Sachs, and JPMorgan Chase. In addition, the President’s budget would use CDFI for the Healthy Food Financing Initiative [HFFI]—part of the ‘‘Let’s Move!’’ program led by the First Lady—provides financing from CDFI to certain retail operations that offer healthy food options.”
Click here for the FY-2012 Full Report.
GAO Report Calls for Increased IRS Guidance, Controls for NMTC Program
The Government Accountability Office (GAO) recently released a new report that addresses the complex financial structures of New Markets Tax Credit (NMTC) transactions.