Menendez, Booker Announce $35M in Federal Tax Credits to Spur Economic Investment in New Jersey

Menendez, Booker Announce $35M in Federal Tax Credits to Spur Economic Investment in New Jersey

 

WASHINGTON, D.C. – U.S. Senators Bob Menendez, a senior member on the Senate Finance Committee that sets national tax policy, and Cory Booker today announced that the Community Loan Fund of New Jersey, Inc. located in New Brunswick has been awarded $35 million through the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) New Markets Tax Credit Program (NMTC) to attract private investment and spur economic activity in low income communities throughout the state. This federal tax credit builds public-private development partnerships by helping to leverage greater private-sector investments than would otherwise be possible.

“New Markets Tax Credits act as a catalyst for growth and prosperity in communities across New Jersey,” said Sen. Menendez. “CDFI investments have proven to work in successfully attracting real investments to underserved communities often challenged by high unemployment, abandoned properties and stagnant incomes to spur economic activity and job creation, grow small businesses and revitalize neighborhoods.”

“New Market Tax Credits are a powerful way to spur economic growth and development in low-income communities in New Jersey,” said Sen. Booker. “Every day, the Community Loan Fund of New Brunswick opens up access to capital to ideas and businesses that would traditionally be overlooked. This proven tool will help expand opportunity for New Jerseyans.”

The CDFI Fund generates economic growth and opportunity in some of our nation’s most distressed communities by offering innovative programs that invest federal dollars alongside private sector capital. Private community partners have for the better part of a century injected capital, created jobs, and provided mortgage credit, small business loans, and banking services to spur economic growth in lower-income, distressed communities. In 2018 alone, CDFIs made over 280,000 loans and investments totaling more than $11 billion, financed over 15,000 small businesses and over 33,613 affordable housing units.

This year, the CDFI Fund is awarding $3.5 billion in NMTCs to 73 organizations in 35 different states, Puerto Rico and the District of Columbia to support investments across the nation. Every dollar invested by the federal government, the NMTC program generates over $8 of private investment.

In past years, the Community Loan Fund of New Jersey, now known as New Jersey Community Capital, has used their federal funds to finish projects such as the Hahne & Co. Building in Newark and the Millville Arts and Innovation Center in Millville.

“New Markets Tax Credits are critical to building communities of opportunity by reviving local economies,” said Wayne Meyer, President of New Jersey Community Capital. “With this award, we are able to expand our impact and support catalytic projects ranging from manufacturing to educational facilities that create living wage jobs, improve health outcomes, and serve all residents in low-income communities.”

The NMTC program allows individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in vehicles known as Community Development Entities (CDEs).  The CDEs in turn use the capital raised to make investments in low-income communities. 

CDEs that receive the tax credit allocation authority under the program are domestic corporations or partnerships that provide loans, investments, or financial counseling in low-income urban and rural communities. The tax credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year period. 

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