With his veto of expanded state historic rehabilitation tax credits, Gov. Andrew M. Cuomo has a chance to follow through on suggestions that he make a more-effective program part of his 2013 budget plan.
The tax credit program has been a vital piece of the effort to revitalize Buffalo’s historic buildings. One example is developer Rocco Termini’s spectacular $43 million makeover of the Hotel @ the Lafayette downtown.
As much good as the legislation has done in Western New York, it has some major flaws: The credit limit wasn’t big enough and the program ends in 2014.
The bill pushed through the Legislature by Republican Sen. Mark J. Grisanti of Buffalo and Democratic Assemblyman Steve Englebright of Long Island would have fixed the first problem by raising the limit per project from $5 million to $12 million. But the bill would not have extended the life of the program.
Cuomo should follow up his veto by working on his own proposal to increase the cap and extend the program. The changes should be included in his next executive budget and he should commit to them in his State of the State address.
Termini was a strong supporter of the higher cap and had indicated earlier in the year that he would use the new limit to tackle the monumental renovation of the old AM&A’s department store on Main Street. When the governor hadn’t signed the bill by early this fall, Termini shelved plans for that $60 million rehabilitation and moved on to smaller projects in North Buffalo.
But as News Albany Bureau Chief Tom Precious reported, the governor generally opposes legislation that creates a financial impact outside of the normal budget-making process in the spring.
Fine. Now Cuomo can include the matter in his own executive budget, and the Legislature should do the same in its own budget proposals.
The short-term costs of the tax credits to the state treasury – budget officials estimated the higher tax credit measure would cost the state $20 million in tax revenues in the upcoming fiscal year and $80 million over the following two years – will be more than offset by economic activity those projects will generate far into the future.
Other changes to make rehabilitation projects more attractive to new investors also should be integrated into the new proposals. An increased pool of potential investors will help speed the work and create jobs and expand municipal tax bases.
On the federal side, Sen. Charles E. Schumer is pushing to expand and extend two major federal tax credits designed to help revitalize historic buildings. Used together, the state and federal programs can go a long way toward maintaining the rehabilitation momentum in the area.
Disappointment over Cuomo’s veto should quickly turn to optimism as long as the governor pushes for an even better state historic credit program.
As Termini said: “It might be a little delay, but I think it’s a win-win for everybody.”