As previously covered by MyHometownOhio, the pilot program of the Ohio Historic Preservation Tax Credit was thrown into some question late last year when a press release from the Ohio Department of Development referred to it a “120 million dollar program.” When that happened, several individuals involved in the effort, including legislators, began to discuss the meaning of that phrase, and openly questioned whether or not an announced second round of applications would actually be accepted this Summer.  As it turns out, not only will there not be a Round Two, but several pending Round One applications will not be approved.

An overview of state historic preservation tax credits prepared by the National Trust for Historic Preservation (click here, and then click on “state-by-state list of tax incentives”) shows that most states do have tax credit caps. These are either placed on the size of the credit per taxpayer (Colorado, for instance, has a credit limit of $30,000) or on the total state outlay (Kentucky, for instance, limits the total awards to $3 million annually). Several states have both types.

The challenge in Ohio is that the program was that when the program was announced, no cap on individual credits or the total program was included. As a result, projects have been submitted in the first year of applications that, if successful, exceed that $120 million limit – and the second year of applications has not yet begun.

Today, in a press release announcing the award of several more credits, the Ohio Department of Development announced that, in essence, the pilot program was now officially closed. In part, it states:

“The tax credits for applications approved to date total approximately $123 million, exceeding the amount budgeted for the program. When the program was designed by the legislature, the Legislative Service Commission prepared a fiscal analysis estimating its total cost would be between $42 million and $94 million for all projects approved over a two-year period. At the same time, the Ohio Department of Taxation estimated that the total cost of the program could be as much as $150 million over two years. Using these estimates as a guide, Ohio's Office of Budget and Management assumed for budgeting purposes that the total two-year program cost would be $120 million.

The tax credits for applications approved to date approximate the $120 million budgeted for the program. Following a review of four pending applications for low value projects to satisfy the statutory requirement that a mix of high and low value projects be approved, no other applications will be approved for the remainder of the two-year program. If all pending applications were approved, the total cost of the program to the State would be $214,804,261, exceeding the $120 million budgeted for the program by approximately $90,967,788.”

The application itself has been removed from the ODOD website.

Somewhat ironically, this comes the same week as news came that the National Trust has received a $100,000 Gund Foundation grant to evaluate the Ohio Historic Preservation Tax Credit and to “…determine its economic impact.”

Photo: Ohio Statehouse -- fusionpanda/Creative Commons License