The debate over comprehensive tax reform and the implications of such reform on the tax credit program have been a long simmering issue in the affordable housing community. A flurry of reports on debt reduction over the past year and the debt-ceiling debate that followed have contributed to a fiscal and political environment that put many in the industry on watch. So, with all of the attention this issue has been getting, what are the odds the low income housing tax credit is in any real danger from super-committee action? According to several industry experts, the answer appears to be low.
For starters, one of the committee’s co-chairs, Patty Murray (D – WA) is a staunch ally of affordable housing causes. “Patty Murray is very supportive of housing”, said Colleen Fisher, Executive Director of the Council on Affordable and Rural Housing. “John Kerry also has a very good track record… in general, amongst all members of the committee, there appears to be support on the tax credit side of things”.
Peter Lawrence, Senior Director of Public Policy & Government Affairs for Enterprise Community Partners, echoed Colleen’s sentiments, “Patty Murray has been a long standing champion of affordable housing and huge advocate for housing and community development.” He also mentioned Senator Kerry (D – MA) and Representative van Holland (D –MD) and Baccera (D – CA) as allies of the affordable housing cause.
More broadly, both experts think the odds of comprehensive tax reform in the super committee are low, “From the tax end of things, I don’t think anyone would venture a bet on comprehensive tax reform” said Fisher. “There may be some reform around the edges but given the politics of this thing, if they decide to go really big, it’s going to be hard to get through.” Lawrence agreed, “Given the extremely compressed time schedule under which the super committee is working, the chances for comprehensive tax reform as part of deficit reduction seem pretty low.”
Lawrence did warn however, that the committee’s “unprecedented mandate” warranted vigilance from the industry, “We have to make the case for these (LIHTC and NMTC) programs. Once they’ve got seven committee members to sign on to their proposal, it will be very difficult to derail”
As the committee continues its work on a debt reduction proposal, both experts felt continued vigilance was warranted, stressing that the industry continue to communicate to members of Congress the program’s successes, or as Fisher summed up, “the program is proof that a public-private partnerships can work”.
The extent to which the LIHTC program is safe, is the extent to which comprehensive tax reform is a politically and logistically untenable position for committee members to take. Looking forward, as many republican presidential candidates have made tax reform a key tenant of their platforms, one has to wonder just how long comprehensive tax-reform remains off the table.