The retroactive proposal would thwart projects already underway, trigger costly litigation and send a chilling message that businesses should be wary of investing in Rhode Island

The Carcieri Administration has introduced a supplemental budget proposal capping the redemption of historic tax credits at $20 million in FY '08, $40 million beginning in FY '09 and proposing a full program sunset by 2017. The Supplemental Budget proposal is detailed in House Bill 7204 (Article 20) beginning on page 102.

The proposal comes at a time when it appears that natural market forces are causing a slowdown in historic tax credit activity. "The preliminary indication is that without doing anything, the slowing of projects may reduce the state's projected budget deficit in FY '09 by as much as $40 million", said Scott Wolf, Executive Director of Grow Smart Rhode Island. "An update on the status of all active tax credit projects is currently underway and that's how it appears to be shaking out", he said.

Still, Grow Smart and other key allies from such varied sectors as business, housing, local government and historic preservation are opposed to the Governor's proposal for the following reasons:

• It would be counterproductive to fight the state's structural deficit by crippling a proven economic stimulus program when it's most needed.



• We need a state budget that promotes prosperity as well as austerity. Without that balance, we won't have a "balanced budget" that is in the best interest of all Rhode Islanders.



• The proposed tax credit cap is a false savings because it fails to account for the lost income and sale tax revenue that the program generates - revenue that is essential for a healthy state budget.



• Drastically changing the rules in the middle of the game sends a bad message to the business community and would likely lead to severe financial problems for Rhode Island companies and expensive litigation for the state.



• A cap would make participation in the program unpredictable and therefore discourage worthwhile neighborhood revitalization projects from going forward.



• A cap would make the program particularly susceptible to political favoritism because it would be difficult to establish a fair and transparent method for allocating limited credits.



• Caps have proven to undermine other previously successful historic tax credit programs such as that in Maryland.

House Majority Leader Gordon Fox voiced his continued support for the Historic Tax Credit program during his televised response to the Governor Carcieri's State of the State address on January 22nd.

The House Finance Committee has scheduled a hearing on the proposed tax credit changes. It will be held on Thursday, January 31st at 12:00 p.m. in Room 35 at the State House.

Program airs this Sunday, January 27th at 7:30 a.m.

Grow Smart Executive Director Scott Wolf and Rhode Island Housing Executive Director Richard Godfrey will be featured guests on ABC6's On the Record show with host Jim Hummel this weekend.

The segment featuring Wolf focuses on Grow Smart's assessment of Rhode Island's fiscal and economic challenges as well as its perspective on strategies to overcome these challenges.

Stakeholder groups encouraged to propose and help facilitate a range of workshop topics to advance an agenda for Sustainable Prosperity

Grow Smart's inaugural Power of Place Summit in 2006 drew nearly 500 people and helped to launch Rhode Island's new smart growth-oriented state land- use plan, Land Use 2025.

On May 2nd, 2008 state and local decision-makers, builders and developers as well as architects, engineers, nonprofit groups, citizens and other community stakeholders will reconvene for a closer look at how the growth and development choices we make today will impact our economy, environment, public health, efficiency of government and how they permanently shape the quality of life for all Rhode Islanders.

This year we are also partnering with Providence Business News to produce a Special Supplement insert chronicling Grow Smart's 10 years of advocacy and future vision for Rhode Island as well as to preview the Power of Place Summit. Confirm your Summit sponsorship by February 15, 2008 and get your organization's logo included on the supplement cover.

Click HERE to download a Workshop Proposal form*

* Deadline for workshop proposals has been extended to 2/15

Grow Smart acknowledges and thanks the many individuals and organizations who provided us with generous financial support during the all important 4th quarter of 2007 (October-December).

Tax deductible donations to Grow Smart help to sustain our work in formulating and advocating development policies and incentives to expand economic opportunity while safeguarding and enhancing Rhode Island's distinctive quality of place.

Individuals

Corporations

Foundations

Nonprofit / Government / Universities

The Grow Smart RI Land-Use Training Collaborative is still accepting registrations for an upcoming workshop entitled Design Strategies for Mixed-Use Development. The one-night session will be offered on Thursday, February 28th at the CCRI Newport Campus.

This workshop will look at the elements that contribute to the livability of our urban and town centers, design strategies for successful mixed-use development, environmental design and regulatory issues and how to make the most efficient use of limited sites. No matter how you're contributing to shaping your community's future - as an official, developer, designer or active citizen - this workshop will provide an opportunity to gain useful new insights and knowledge.

Featured speakers include Arnold Robinson, AICP of the Newport Collaborative Architects Inc., Donald Powers, AIA, CNU of Donald Powers Architects Inc., Ross Speer, AIA of Mostue & Associates Inc., and Scott Millar of the RI Department of Environmental Management.

Click here to download flyer