OK, I've now done the math on Storey County, Nevada's newest opportunity zone. My quoted tweet, here, is incorrect. I'm going to correct it in a stream. Treasury didn't change the OppZone rules. Nevada officials took advantage of rules already on the books. 1/
(No one is going to share this thread but it's wonk-portant.) 2/
Reminder: Opportunity Zone designations are meant to helped *distressed* communities. But the Feds have to determine what distressed means. So they have a formula. They lay that formula out in IRS guidance. 3/
There are two ways you can satisfy the formula. You can meet the distress definition (most counties) or you can be right next to a distressed county, with a median income, in your county, that is <125% of the distressed county's median income. 5/
Stick with me here.
The numbers in the formula rely, as a base case, on 2011-15 ACS (Census) data. But in February, the IRS issued guidance that said states COULD nominate zones based on 2012-16 ACS data:
The numbers in the formula rely, as a base case, on 2011-15 ACS (Census) data. But in February, the IRS issued guidance that said states COULD nominate zones based on 2012-16 ACS data:
Tl;dr: Storey County, Nevada, did not meet the criteria for an adjacent OppZone based on the 11-15 data. But it does -- juuuuuuust barely -- based on 12-16 data. Its median income fell just enough that it was, by a few hundred dollars, w/in 125% of an adjacent distressed tract 7/
Getting Treasury to recognize that change appears to have been the subject of a huge lobbying effort, as @damianpaletta reports so well here: washingtonpost.com/business/econo… 8/
@damianpaletta But Treasury does not, at least as far as I can tell based on my math from two different sets of ACS data (fun!), appear to have changed its policy in regards to which tracts are eligible for designation. It appears to have followed the guidance set out in Feb. fin/
(To be clear, Nevada took advantage of that policy in order to substitute a county that is at the very very very edge of qualifying for OppZone status -- a county with a median income well above the nation's -- at the expense of a much poorer county.)
