The tax package compromise includes a 1-year extension, but the senators said a second year is needed to complete post-Katrina housing
Louisiana Sens. Mary Landrieu and David Vitter failed Wednesday to add a two-year extension of a hurricane recovery program to the compromise tax-cut package approved by the Senate, but said the fight is not yet over.
Redevelopment of the B.W. Cooper housing program would be threatened if the deadline isn't extended, according to the Housing Authority of New Orleans.The Gulf Opportunity Zone tax credit program is seen as critical to completing mixed-income housing in New Orleans and other communities. The tax package compromise includes a one-year extension, but the senators said a second year is needed so that as many as 5,000 planned Gulf Coast housing units, most in southern Louisiana, do not fall short of completion.
Landrieu, a Democrat, and Vitter, a Republican, said they did win a commitment from two influential senators to try to bring the extension to a vote early in 2011.
Landrieu and Vitter joined on the Senate floor Wednesday to push for the extension, but couldn't move past objections by Sen. Jon Kyl, R-Ariz., who opposed any last-minute changes in the $858 billion extension of Bush-era tax cuts he helped negotiate. That measure, which includes a one-year extension of expanded unemployment benefits, passed 81-19 with support from Landrieu and Vitter.
During their unusual joint appeal, Landrieu and Vitter, who have had an acrimonious relationship since Vitter was elected to the Senate in 2004, agreed the one-year extension of the housing tax credits included in the legislation isn't sufficient to complete housing projects critical to the region's post-Katrina recovery. The projects were stalled by the collapse of private financing markets, they said, and need a two-year extension to qualify for tens of millions of dollars in federal tax credits.
During a discussion on the Senate floor, Senate Finance Committee Chairman Max Baucus, D-Mont., and Kyl, the lead GOP negotiator on the legislation to extend the Bush tax cuts, said they will support the GO Zone extension in the next Congress. Both said the extension could be included in a bill making technical corrections in the giant tax bill, a common practice after any complex legislation is enacted.
"I will work with the senators from the Finance Committee, our committee, when we bring up the legislation next year to do our very best to make sure the provision is included so that we can help these people who really desperately need housing in Louisiana," Baucus said.
"I also share the confidence of the chairman of the Finance Committee that we will find an appropriate tax bill early in 2011 to include this change, which I think we all view as a technical change that will allow this special financing to be used as Congress intended," Kyl said.
Landrieu had planned to offer an amendment Wednesday that would have included the two-year extension in the $858 billion tax bill. But it would have required the unanimous consent of all senators, and she was informed Kyl would object.
"We fought to the last minute to make this fix in the Senate, and we still have hope to get it fixed in the House, but I did receive a strong commitment from Chairman Baucus and Sen. Kyl to get the date extended early in 2011," Landrieu said. "The extension is critical to the people of the Gulf Coast, to our cities and to all the businesses that are depending on a full economic recovery from the storms of 2005."
Vitter said he joined Landrieu "in stressing the importance of the second year of a GO Zone extension and look forward to continuing to work with all of these folks in getting that done absolutely as soon as possible in 2011."
While pleased that Baucus and Kyl agreed to support the two-year extension in 2001, Landrieu said it is hard to understand why the Senate would approve $800 million in extensions of the Gulf Opportunity Zone provisions enacted after Hurricane Katrina to spur redevelopment along the Gulf Coast, and leave out the "all important" second year of the housing tax credits.
Included in the tax bill passed by the Senate Wednesday is a one-year extension of the 50 percent bonus depreciation for businesses rebuilding in hurricane-affected communities but not a second-year of extensions for the housing tax credit
The tax bill also would extend by two years the rehabilitation credit for historic buildings damaged by the hurricanes.
Matt Morrin, New Orleans development director for Enterprise Community Partners, said the shorter extension raises problems for his organization's plans to develop 568 mixed-income units with tax credits from the GO Zone program at the Lafitte housing development.
Of those, 134 are near completion, and will be completed well within the one-year extension included in the compromise tax bill, he said. But the remaining 424 units will take longer than one year to complete, Morrin said.
Redevelopment of the B.W. Cooper project would also be threatened if the deadline isn't extended, according to the Housing Authority of New Orleans.
In all, about 2,800 units in New Orleans, Chalmette, Marrero, Terrytown, Covington, Hammond, Houma and Lake Charles are at risk if the deadline for getting projects into use isn't extended beyond the one year duration in the tax compromise legislation.
Bruce Alpert can be reached at balpert@timespicayune.com or 202.383.7861.