Senator Mike Crapo | Official U.S. Senate headshot
Senator Mike Crapo | Official U.S. Senate headshot
U.S. Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) delivered remarks at a hearing titled "Tax Tools for Local Economic Development" on July 31, 2024, in Washington, D.C.
Crapo expressed his gratitude for the bipartisan effort on the topic and emphasized the importance of incentives that encourage local economic growth as discussions begin to extend the Republicans' 2017 tax law, the Tax Cuts and Jobs Act (TCJA). He highlighted the success of the opportunity zones program in driving investment into distressed areas by offering tax incentives for investments in opportunity funds.
"In Idaho, within just the first two years of the opportunity zones program, 54 percent of the state’s opportunity zones saw investments," Crapo noted. "According to the Joint Committee on Taxation, by the end of 2022, Idaho had received $130 million in opportunity zone investment."
Crapo cited research by Treasury Department economists and compiled by the Economic Innovation Group showing that in its initial two years, invested opportunity zones were significantly high in poverty and unemployment rates while having lower median household incomes.
He acknowledged Senator Scott's leadership on this issue and mentioned legislation introduced by Senators Scott and Booker to extend and improve the program. This includes requiring reports so Congress can monitor how investments are working.
One witness at the hearing was Shay Hawkins, President of the Opportunity Funds Association. Hawkins played a key role in developing the opportunity zones program while working with Senator Scott's staff in 2017.
Crapo also referenced other tax tools that spur local economic development such as new markets tax credits, historic tax credits, tax-exempt bonds, and low-income housing tax credits. He provided examples from Idaho: Twin Falls’ Second South Market food hall project developed through an opportunity zone initiative and Mountain Home’s Desert Sage Health Center funded via new markets tax credit investment.
The senator commended committee members working across party lines to promote these incentives. For instance, Senators Daines and Cardin have proposed legislation to permanently extend new markets tax credits; Senators Cassidy, Cardin, Collins, and Cantwell have introduced measures to expand historic tax credits.
Crapo concluded by expressing eagerness to discuss existing policies and explore new ideas for supporting local economic development responsibly.
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