Five States Swap Tax Credits for Treasury Stimulus
The US Treasury is setting up nearly $135m in Recovery Act funds for Iowa, Maine, New Hampshire, Rhode Island and Washington. The money is meant to go towards creating jobs in the states and developing a more affordable housing market for residents. The states, in turn, will swap tax credits for the aid. Iowa has been granted $72m; Rhode island, $36m; Washington, $11m; New Hampshire, $10m and Maine, $4m. Under the agreement, these states are exchanging a portion of their unused low-income housing tax credits (LIHTCs) for direct cash assistance, some of which will then go to contractors to build housing this demographic can afford. "LIHTC projects around the nation have experienced financial problems getting to the finish line but these critical funds will provide a much-needed final push to get people home," the Treasury said in a press statement. The funds announced today are part of an initiative that will eventually provide more than $3bn from the Recovery Act to put people to work building affordable housing across the nation -- simultaneously creating jobs and low-cost housing. The Treasury says it will work with state housing agencies, in effort to jump start the development or renovation of this housing. The funds announced today are the second round in a series of awards based on a rolling application process. The Treasury's announcement came within hours of the Labor Department's jobless claims report. First-time claims for benefits actually dropped, but continuing and first-time claims remain at relatively high levels. The four-week average of the continuing claims, which smoothes out distortions in the week-to-week data, rose by 88,750 to 6.69 million, a record-high level. The four-week average of first-time claims rose 4,000 to 631,250. Iowa -- which will receive $72m from the Treasury -- reported the second highest increase in initial claims, the Labor Department said, with 2,312 people filing a claim. Write to Kelly Curran.