Function isn’t a word one often hears in connection with the New York State Legislature — at least without that now-familiar prefix attached to it. But function it did last Friday when the Senate passed a bill to improve the state’s preservation tax credit program for historic properties. Even more amazing than the fact that the ever-squabbling senators acted on this important piece of legislation, they passed a bill identical to the one the Assembly passed in June. Now if only Gov. Paterson would sign it.
He refused to sign a similar bill last year due to the anticipated tax revenue loss, but this one addresses that concern. It does so primarily by limiting use of the enhanced credits to projects in distressed areas, a move that would cut the lost tax revenue from an estimated $60 million a year to around $30 million. And implementation would be delayed until 2010, so the loss wouldn’t be felt for at least a year, when the recovery may have begun and the state could be in better shape.
In fact the program will serve as an economic stimulus, particularly in cities, where most of the historic commercial and residential properties are (many of them vacant, underutilized and deteriorating), and where the boost is most needed. The bill would raise the rate of credit for commercial properties from 6 percent to 20 percent and raise the cap from $100,000 to $5 million. For residential properties the cap would go from $25,000 to $50,000, and rebates would be available for those without significant tax liabliity.
For too long, developers have been covering over green space and putting up ugly, inferior buildings in the suburbs because it is cheaper than rehabbing older, architecturally distinguished ones in the city. As a result, many of those old buildings have been neglected and eventually lost. This program could help reverse that trend and bring new projects and jobs to the cities, as well as new tax revenue — income, sales and property — to the state and local governments. If it doesn’t work, the Legislature can simply not renew it when it sunsets in 2014.