Federal Reserve Governor Praises New Markets Tax Credit’s 25-Year Track Record in Boosting Low-Income Communities
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The NMTC Program’s 25-Year Legacy of Economic Development in Underserved Communities
Federal Reserve Governor Michael S. Barr recently praised the New Markets Tax Credit (NMTC) program for its remarkable 25-year legacy of economic development in underserved communities during a speech at the 2025 Fall New Markets Tax Credit Conference in New Orleans, Louisiana. The conference brought together key stakeholders from various sectors to discuss the program’s past achievements and future prospects.
The NMTC provides a crucial platform for investment in low-income communities by offering investors a 39 percent tax incentive paid over seven years. This initiative has been instrumental in attracting investors to underserved areas, thereby fostering economic growth and stability.
A Historic Achievement
In his speech, Governor Barr described the permanent extension of the program as "a historic achievement" that will bring stability and growth to investments in low-income communities. The NMTC’s recent approval ensures a continued flow of investment into these regions, promoting sustainable development and job creation. This significant milestone highlights the program’s efficacy in driving economic progress.
Unlocking Hidden Potential
According to Governor Barr, the NMTC "unlocks the undercounted, underappreciated potential of so many communities." By doing so, it creates opportunities for both investors and local residents alike, thereby contributing positively to the US economy. His statement emphasizes the importance of the program’s ability to mobilize resources and expertise within these areas.
Origins of the NMTC Program
The origins of the NMTC program can be traced back to the 1990s as part of President Clinton’s New Markets Initiative. The initiative aimed to stimulate investment in domestic underserved communities, thereby creating economic opportunities for these regions. During this period, Governor Barr worked at the Treasury Department and accompanied the then-President on visits to rural areas like Clarksdale, Mississippi.
These first-hand experiences undoubtedly influenced his perspective on the vital role that community development initiatives play in driving economic progress. He recalled meeting entrepreneurs seeking financial support and community lenders striving to grow local economies.
Bipartisanship and Comprehensive Reach
Governor Barr attributed the NMTC’s long-term success to its ability to transcend party lines, demonstrating a collaborative spirit among lawmakers from both parties. This unique consensus facilitated comprehensive geographical coverage of rural and urban areas across the United States. Initially, when the bill was passed, Republican lawmaker Jim Talent acknowledged the program as "the most effective anti-poverty package coming out of the federal government…in a generation."
The NMTC’s Public-Private Partnership
Governor Barr emphasized that the NMTC operates as a public-private partnership that integrates community resources to promote investment and job creation. He acknowledged the program’s considerable achievements, stating that it has helped create approximately one million jobs over its 25-year history.
A Promising Future for the NMTC
Finally, in his keynote address, Governor Barr concluded by expressing optimism about the program’s prospects, suggesting that the conference marked a new chapter in the NMTC’s contribution to economic development. His words highlighted the essential role of initiatives like this one in fostering community growth and prosperity.
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