Committee considers raising downtown tax-credit cap from $3 million to $5 million in S.327

The Economic Development, Housing & General Affairs committee on Feb. 4 reviewed Section 2 of S.327, which proposes increasing the cap on downtown tax credits from $3,000,000 to $5,000,000. Alex, a bill presenter, told members that administrations in prior years had proposed the same increase but the governor’s current budget does not include it.

Alex said program demand outstrips available awards: “applications exceeded and in one year far exceeded $5,000,000,” and the committee was told applications typically return repeatedly until projects secure funding. Chair members noted past estimates of return on investment and asked staff to confirm program leverage figures as part of their review.

Committee members emphasized the program’s role in supporting commercial downtown cores as well as housing, and discussed tradeoffs between investing additional state capacity and prioritizing smaller-town projects that often achieve larger relative community impacts. No formal vote was taken; members signaled this is one option the committee can consider as it advances S.327 and asked staff for follow-up on demand and ROI numbers.

The committee did not adopt any change to Section 2 at this meeting and will return to the item during later deliberations.