Baton Rouge’s illuminated downtown skyline, a tangible measure of the resurgence of development in the area, has been shaped by a relatively small and obscure state tax incentive that has kept intact an air of history in the Capital City.
Taxpayers fund the Commercial Rehabilitation Tax Credit, a statewide incentive that gives developers who renovate historic, sometimes hundred-year-old buildings a check for 25% of the project’s cost. The credit comes at a cost of around $8 million to $13 million per year to the state budget, which has struggled with repeated shortfalls year after year.
But for every dollar the state spends on the credit, it receives around $2.77 back in its coffers in tax revenue, according to the most recent study on the program in 2015.
The program is projected to cost around $16.5 million this year, according to state Department of Revenue Data. The incentive expires in 2018, but the Legislature is expected to consider renewing it or rolling it back in the spring.