Certified Capital Companies (CAPCO) programs are initiatives that allow investors to receive tax credits for their investments. These investments are used in establishing, enlarging or improving businesses that are located in regions where they can aid low income citizens or boost the opportunities in impoverished areas around the United States. There are numerous plans enacted by individual states, most of which are based on a federal program that has since expired. Currently, 20 percent of the states in the U.S. are using CAPCO programs to increase their economic stability.
CAPCO was designed to encourage investments specifically from the insurance industry. By investing in CAPCO funds these companies are able to receive a matching credit that reduces their tax liabilities to the state where the investment is made. The funds they have donated are then invested directly into small businesses.
Local economies are being strengthened by these programs in numerous ways. It helps startups receive funding that may have been unable to do so otherwise. In addition it creates well-paying jobs and helps to increase local and state tax revenue that can be re-invested into neighboring communities.
Despite some concern over the amount that was committed to the program, Texas is now able to show genuine progress, with many of the recipients, their employees and the communities thriving. The employment opportunities are being created in industries that were once stumbling, including manufacturing and technology. Both of these sectors are now providing numerous skilled, full-time career opportunities for people who were previously either unemployed or underemployed.
Approximately $87 million has been invested through the CAPCO program in Texas alone, with additional follow-on capital totaling over $100 million. This has resulted in an estimated 1,700 new or preserved jobs. Those positions are directly related to the program, with even more additional jobs being created in areas that are experiencing a financial boost due to the investments in their infrastructure.
These improvements were able to be seen even during a time when the rest of the country was facing record job losses due to the Great Recession. As a whole, the state has added jobs throughout the recession and continues to outpace the remainder of the country, even as the recovery continues to take hold. Continued investment into targeted areas through programs like CAPCO