The Treasury Department announced a new round of tax credits meant to encourage community development in low-income neighborhoods.
The Treasury’s Community Development Financial Institutions Fund said Thursday it will deliver $7 billion in tax credits to 120 organizations across the country. Those groups, spread out across 36 states, the District and Puerto Rico, will use the funds to boost investments to businesses and nonprofits in their communities.
“By attracting private business and development to distressed communities, this tax credit spurs economic growth,” said Treasury Secretary Jack Lew in a statement.
In past years, the tax credits have been used to encourage investments that may help improve organizations in struggling communities, such as grocery stores, theaters and schools.
For instance, Lew spoke Thursday in Anacostia at Educare DC, a preschool that received low-cost financing through the program in 2009. The school, which educates children from low-income families, used the loan to pay for construction of the building — a 32,100-square-foot facility with a courtyard, sleek wooden panels and glass walls.
On a tour of the school, Lew waved at toddlers playing with building blocks. One little girl in a Hello Kitty sweater offered him a slice of imaginary pizza. “We created a new learning community for families that wouldn’t have had it otherwise,” said Pyper Davis, executive director of Educare DC.
The treasury secretary also met with representatives from some of the organizations that will be receiving tax credits. They talked about how they plan to use the money to help support affordable housing, vocational training programs, charter schools and health centers.
“So many of the communities we work in haven’t fully recovered yet from the economic downturn,” said Annie Donovan, director of the CDFI Fund, which runs the tax credit program.
One woman asked him for advice on how to maintain support for the tax credit program among a changing political climate. Lew, who was appointed by President Obama in 2013, will be replaced after President-elect Donald Trump takes office in January.
Lew pointed out that the Community Development Financial Institutions Fund began as a joint effort from both political parties.
Still, the organizers of the tax credit program won’t have to worry about the political environment in Washington for a couple of years at least. As part of the latest renewal, funding for the New Markets Tax Credits was secured through 2019.