Economic Opportunity Zones: ‘A Huge Deal’

SEN. TIM SCOTT: ‘Opportunity Can Truly Be The Difference That Changes The Course Of One’s Life’

SEN. TIM SCOTT (R-SC): “These are private sector dollars coming into distressed communities, where 50 million Americans live, that will provide long-term opportunities to transform communities and the people who live in there – everything from workforce investment to better education, to businesses being attracted into these Opportunity Zones.” (Fox Business, 2/5/2018)

• SEN. SCOTT (R-SC): “Since I entered Congress, my goal was simple: create opportunity for everyday Americans wherever possible… It is a passion because I grew up in a single-parent household, surrounded in poverty, with very little expectation that I would find my way to success. But I learned that opportunity can truly be the difference that changes the course of one’s life. I know that when the [Investing in Opportunity Act] is passed, when it actually reaches the people it’s intended to help, the results will be truly amazing because it will help everyday people in South Carolina and beyond build their way to a brighter future.” (Sen. Scott, Press Release, 11/17/2017)

SEN. MITCH McCONNELL (R-KY): “Of the new jobs that were created from 2010 to 2016, according to one estimate, three quarters went to major metropolitan areas. Only three percent of those new jobs went to rural America. Across the nation -- including my home state of Kentucky, particularly eastern Kentucky -- many rural areas, small cities, and suburbs were left behind by the Obama economy. It’s time to change that. That’s why my colleague, the junior Senator from South Carolina, made sure that tax reform included a provision to create ‘opportunity zones’ across the United States. My Republican colleagues and I were proud to support this policy. It allows state governors to designate economically-distressed areas for special tax incentives that will make them more attractive places to invest and create jobs. It will empower communities that have been passed over time and time again to, in effect, put up big neon signs that say ‘We’re open for business.’” (Sen. McConnell, Floor Remarks, 2/6/2018)

PRESIDENT DONALD TRUMP: “I want to thank Senator Tim Scott for ‘opportunity zones.’ Our tax plan encourages this investment. … Thank you, Tim. We’re investing in distressed communities to create more jobs for those who have too often been left behind. And Tim worked hard on that. We want every American to know the dignity of work, the pride of a paycheck, and the satisfaction of a job really well done.” (President Trump, Remarks At The 2018 House And Senate Republican Member Conference, 2/1/18)

‘A Little-Noticed Section’ In The Tax Law ‘Is A Huge Deal’

“A little-noticed section in the $1.5 trillion tax cut that President Trump signed into law late last month is drawing attention from venture capitalists, state government officials and mayors across America. The provision, on Page 130 of the tax overhaul, is an attempt to grapple with a yawning hole in the recovery from the Great Recession: the fact that, in huge swaths of the country, the economic recovery has yet to arrive. The law creates ‘Opportunity Zones,’ which will use tax incentives to draw long-term investment to parts of America that continue to struggle with high poverty and sluggish job and business growth. The provision is the first new substantial federal attempt to aid those communities in more than a decade.” (“Tucked Into The Tax Bill, A Plan To Help Distressed America,” The New York Times, 1/29/2018)

• “If the zones succeed, they could help revitalize neighborhoods and towns that are starved for investment.” (“Tucked Into The Tax Bill, A Plan To Help Distressed America,” The New York Times, 1/29/2018)

• “The program allows taxpayers to defer and reduce the recognition of capital gain if the taxpayer reinvests all or a portion the capital gain proceeds in a ‘Qualified Opportunity Fund.’ A Qualified Opportunity Fund must invest at least 90% of its assets in certain qualifying businesses or property located in a ‘Qualified Opportunity Zone.’ The governor of each state may designate up to 25% of the state’s qualifying low-income census tracts as Qualified Opportunity Zones. …this new program will provide a number of tax benefits to investors and direct much needed capital to low-income communities.” (“Capital Gain Deferral And Reduction - Benefits Of Investing In Opportunity Zones,” The National Law Review, 2/6/2018)

“The zones were included in the tax law by Senator Tim Scott, a South Carolina Republican who was born into poverty in North Charleston, and based on a bill he co-sponsored in 2017 with several Democrats. The effort to create the zones was pushed by an upstart Washington think tank, the Economic Innovation Group… a previous iteration of an opportunity zone bill included Senator Cory Booker, Democrat of New Jersey, and House lawmakers from both parties.” (“Tucked Into The Tax Bill, A Plan To Help Distressed America,” The New York Times, 1/29/2018)

“Colorado’s economic development office is scrambling to craft a list of areas in the state eligible for new federal tax breaks with the potential to funnel billions of dollars into struggling areas. … ‘It was buried in the tax bill, but it is a huge deal,’ said Stephanie Copeland, director of the Colorado Office of Economic Development.” (“Colorado Eyes Creating Opportunity Zones Under New Tax Law To Spur Investment In Distressed Areas,” The Denver Post, 1/18/2018)

“The mayor of Hartford [Connecticut] is urging the governor to nominate wide swaths of the city for a designation created in the GOP federal tax legislation that would reward private investment in low income neighborhoods. … ‘the bipartisan Investing in Opportunity Act, could provide an opportunity to spur private investment in long-disadvantaged communities in the capital city,’ Bronin, a Democrat, wrote.” (“Hartford Mayor Luke Bronin Seeks 'Opportunity Zone' Designation For Neighborhoods,” Hartford Courant, 1/9/2018)

‘One In Six Americans Lives In … A “Distressed Community”’

“One in six Americans lives in what the Economic Innovation Group calls a ‘distressed community,’ where median household incomes remain far below the national level, which is $59,000 a year, and the poverty rate is well above the national average. Those communities are urban, rural and suburban. On average, the communities lost 6 percent of their jobs and a similar share of their business establishments from 2011 to 2015, according to census data.” (“Tucked Into The Tax Bill, A Plan To Help Distressed America,” The New York Times, 1/29/2018)

• “The national economy grew and added jobs during that period, but that growth was disproportionately in large cities. Metropolitan areas with at least one million residents provided just under half of America’s jobs in 2010. But from 2010 through 2016, those metropolitan areas accounted for nearly three-quarters of the country’s net job creation, according to new research by the Metropolitan Policy Program at the Brookings Institution in Washington.” (“Tucked Into The Tax Bill, A Plan To Help Distressed America,” The New York Times, 1/29/2018)

• “Rural areas accounted for just 3 percent of the job growth in that time. From 2010 to 2014, according to the innovation group’s research, rural areas saw more businesses close than open.” (“Tucked Into The Tax Bill, A Plan To Help Distressed America,” The New York Times, 1/29/2018)

• “Economic development professionals in those areas have struggled to attract the attention of companies and venture capitalists, who channel most of their money to major cities.” (“Tucked Into The Tax Bill, A Plan To Help Distressed America,” The New York Times, 1/29/2018)