Supporting Development with Research
UI law professor’s editorial on tax credits draws new investments to Idaho
Idaho needs innovative solutions for expanding its economy – and research conducted by the University of Idaho College of Law’s Economic Development Clinic has built a foundation for new opportunities in the state.
In 2011, a group of students at the Boise-based clinic investigated the New Markets Tax Credit as part of a project for a small Idaho city.
Stephen R. Miller, an associate professor of law at UI and director of the Economic Development Clinic, says he and his students were surprised to discover that areas all over Idaho were eligible for the tax credit, but almost no one was using it.
“Only a few deals had been done, which was surprising because surrounding states had done quite a few,” Miller says.
Promoting a Plan
The New Markets Tax Credit program, created by Congress in 2000, is designed to help low-income communities attract investors, who can then receive a federal tax credit for their investments in economic development projects.
The law students studied federal documents that helped them determine which areas of Idaho are eligible to use the New Markets Tax Credit. They discovered not only that many of the state’s rural areas were eligible, but also that much of downtown Boise met the mark.
Miller wrote an editorial piece in the Idaho Statesman arguing that the credits were underutilized in Idaho. Then the interest started rolling in.
“A project that started out for one specific city morphed out into this multi-year larger project about the entire state,” Miller says. “We played a really important part in the informational component, helping people understand the potential of these deals and what they could offer.”
Paying Off for Idaho
Miller has since worked to promote the tax credit to people in Idaho’s business community and elsewhere. The largest success came when Dave Glaser, president of the Montana Community Development Corporation, read the editorial and called Miller.
The Montana CDC had facilitated about $100 million in investments in Montana through New Markets Tax Credits, and Glaser asked Miller about opportunities in Idaho.
Since then, the Montana CDC has pioneered use of the credit in Idaho, securing tax-credit based financing for four Idaho projects – Kootenai Medical Center in Coeur d’Alene, Targhee Professional Offices in Rexburg, Golden Valley Natural in Shelley and Western States Equipment Company in Pocatello – totaling $61 million.
Glaser said the projects have created or retained 469 jobs, plus 730 construction jobs, and he estimated a 10-year economic impact of more than $175 million.
“It was really because of Stephen’s research and his willingness to write an op-ed,” says Glaser, who in 2014 hosted a training session in Boise at which he talked to public and private officials as well as developers about New Markets Tax Credits, and also stopped to talk with Miller’s students.
Miller says the New Markets Tax Credit project demonstrates how the Economic Development Clinic’s work can help the whole state.
“For students, this is a chance to work on projects they wouldn’t normally get to see as a young associate. They get to participate in cutting-edge issues where law can help communities to thrive,” he says. “This is something that wasn’t going on in Idaho, and we played a part in making that happen here.”
