Cuccinelli and Goldman team-up on school rehab tax creditsPolicyPoliticsVirginia

GOP gubernatorial nominee Ken Cuccinelli and former DPVA chairman Paul Goldman held a conference call with reporters to talk up an idea Goldman has long championed and Cuccinelli has decided to embrace: using federal tax credits to rehabilitate aging public school buildings. Cuccinelli outlined his support for the idea in this Politico piece. If it al sounds somewhat familiar, it should. George Allen backed the idea, along with Goldman, in the pages of the New York Times back in 2009.

What is this most recent odd couple saying about the tax credits? Let’s go to the tape…

  • DJRippert

    Several questions:

    1. If federal tax credits are offered to localities all across America the federal government would take in less money (by granting the credits). Doesn’t that serve to make the deficit bigger? Does Mr. Cuccinelli have a list of federal programs to cut in order to make this deficit – neutral? Whereas Mr. Cuccinelli attended a very expensive private high school I went to a Virginia public high school. In my high school we were taught that there’s no such thing as a free lunch.

    2. Mr. Cuccinelli states that “We spend more money per capita on education than every country except Luxembourg…”. But our schools are falling down? I am sorry Mr. Cuccinelli – that sounds more like mis-management than under-funding.

    3. Is this a relative benefit for Virginia? Every school system in the country will be able to use these tax credits, not just Virginia. While I can’t find state-specific data on the age of public schools I can find region-specific data. The schools in the Southeast US are, on average, the youngest in the country. The average age for all public schools in the US is 42 years old. The average in the Southeast is 37 years. Will this plan essentially have Virginians subsidizing school renovations in other states (with more 50+ year old schools that qualify for the tax break)? http://nces.ed.gov/surveys/frss/inc/displaytables_inc.asp

    This seems like one of those “feel good” measures that hasn’t really been thought through.

    • NormLeahy

      You may want to check out this Rutgers study on the matter. Their numbers say the program is a net tax gain: http://www.policy.rutgers.edu/reports/HTCimpact/EJB-NTHPrelease1.pdf

      • DJRippert

        That’s an interesting study and probably should be included in the Cuccinelli – Goldman narrative. However, it will need some tweaking. Ken Cuccinelli wants to extend the tax breaks to “same purpose” renovation. The study evaluated “different purpose renovation”. A decrepit and abandoned building that is restored to serve some useful purpose needs employees for the long term once it is restored. A decrepit school being used as a school does not require any more employees after it is restored. In fact, it should require slightly fewer employees since it will have few physical problems. The construction jobs during renovation are a benefit of the program but they are temporary.

        While this might be a good idea it represents the shifting of costs from one place to another. A diligent locality or state that has maintained its schools will see this program decrease federal monies without getting much benefit in return. While the Rutgers study does cite more new taxes than costs in the “different purpose” renovations it does not specify that there will be more federal taxes. If most of the new taxes arise from higher property values, new sales taxes, etc then the federal government will increase the federal deficit even if some states benefit at the state level. All of which holds open the question of whether this is a cross subsidy of some states at the expense of others.

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