In 2024, an obscure Pennsylvania government office in Harrisburg assisted owners of historic properties across the state secure federal tax credits to help pay for about $335 million in rehabilitation work. By next year, such support for historic properties could all be gone, shuttered by a Trump administration plan to axe a comparatively paltry $1.5 million in federal funding that helps pay for staffing at the office.

The program in question is the Pennsylvania State Historic Preservation Office (PA SHPO), which is housed within the Pennsylvania Historical and Museum Commission. Those familiar with the office say it plays an important, but behind-the-scenes role in the historic preservation ecosystem. It is a state office staffed by state employees, but it performs a federally-mandated function to, among other tasks, review applications to list buildings on the National Register of Historic Places. In turn, the office is then able to help developers interested in rehabbing or adaptively reusing historic properties obtain federal tax credits to do so.

All states and territories in the U.S. have a SHPO office. Because their responsibilities are federally mandated, Congress has seen fit to provide the offices with federal funding to carry them out. Advocates say such funding is actually at zero cost to the taxpayer as it originates from a federal fund whose revenue is generated by royalties from federal offshore oil and gas leases.

However, at the behest of President Donald Trump, the current Republican-controlled Congress may get rid of it anyway. A draft federal budget bill introduced by a House committee on May 12 seeks to zero out the National Park Service’s Historic Preservation Fund (HPF) starting next year, which is a primary source of funding to state SHPO offices. At the moment, specifics about what would happen next are unavailable, including where revenues from the oil and gas leases would go instead.

“Many historic preservation projects have matching funds from state, local, and private sources, rendering the Historic Preservation Fund highly duplicative,” the Trump administration claimed in its proposal to cut the fund by $158 million next year. “Further, the projects are often of local, rather than national, significance.”

Already, this year’s HPF funding has been frozen since early in the Trump administration in what opponents say is part of a wider, unprecedented executive branch policy of withholding funds already approved by Congress. In recent weeks, Ohio’s SHPO office laid off 12 employees after about $1.5 million in funds allocated for this year were frozen, multiple local media outlets have reported, a development that has spooked Pennsylvania-based advocates into thinking the same fate could be in store for the Commonwealth.

Coupled with similar cuts to staff at the National Park Service, the loss of funding presents a potentially “devastating” scenario, said Mindy Crawford, executive director of the nonprofit Preservation Pennsylvania. “The concern is if we’re laying off National Park Service workers, and we have to lay off state historic preservation workers, that means there is no one to review the National Register nominations and there is no one to review the state historic tax credit,” Crawford explained. “The building doesn’t happen because that money is needed to make it work.”

Paul Steinke, executive director of the Preservation Alliance for Greater Philadelphia, likened the budget proposal to a four-alarm fire. “Preservation projects will stop. Properties could be lost. Projects will be suspended. And that will have negative, perhaps irreversible impacts on historic landmarks, on cultural sites, and archaeological sites. All of the things the SHPOs do,” said Steinke.

Megan McNish, eastern region community preservation coordinator for PA SHPO, said that as of mid-May no staff have been laid off and no decisions have been made about what may happen in the future. As a state employee, McNish cannot advocate for any policy measures. However, she noted that the federal funds for PA SHPO are supplemented by $1 million from state coffers, which are currently providing extra funds to cover the federal freeze. Her office is reaching out to various lawmakers to ensure they are educated on the office and its work. “Our budget is not entirely reliant on federal funds. However, they do add significantly to our overall funding,” McNish said. “There is a lot of uncertainty at the moment.”

Advocates say they believe it is ultimately the Trump administration’s goal to shift all of the costs of the program onto other sources, particularly state governments. That fear is leading them to take action. Preservation Pennsylvania last week sent out an “advocacy alert” to its supporters to ask their congressional representatives to support HPF and other measures designed to support historic preservation. Local interest groups like the Preservation Alliance are amplifying the message to its supporters as well.

The Importance of Tax Credits

Ken Weinstein, a Northwest Philadelphia-based developer whose Philly Office Retail firm specializes in adaptive reuse of historic buildings, said federal tax credits for historic preservation and PA SHPO’s role in obtaining them are often essential elements to redevelopment. Weinstein spoke to Hidden City in his capacity as a private developer, but he is also a commissioner of the Pennsylvania Historical & Museum Commission. “Needless to say, discussions are happening and this is something Pennsylvania needs to deal with,” he said.

Weinstein explained he is most worried about impacts to historic preservation in areas of low-to-mid income and property value. Historic renovation often comes with a price premium compared to new construction, he said. The numbers work better in “hot” neighborhoods where developers can command higher rent or sales to offset the costs. Yet, the tax credits become essential to make the numbers pencil out in other areas, especially the economically-challenged towns and communities that dot much of the interior of Pennsylvania. “It’s not just Philadelphia and Pittsburgh. There are rural areas around the state where the rents just aren’t there, where historic tax credits are most needed,” said Weinstein.

Locally, he offered an example of 147 W. Berkley Street in Wayne Junction, the site of a former Arguto Oilless Bearing Company factory. Weinstein said he relied on historic tax credits to make the math work on an ongoing plan to convert the building to a groundfloor cafe run by the adjacent Attic Brewing Company, with office space above. “Those are already locked in,” he said. “But it’s the type of project where the budget is very tight. If we did not receive the historic tax credits, both federal and state, we would not be doing those projects.”

Even in neighborhoods closer to Center City, the tax credits can play a large role. Former owners of the Willow Street Steam Generation Plant in Callowhill have for decades discussed various new uses, including conversion to an apartment building as recently as 2023. New owner James Maransky said he intentionally worked to add the building to the National Register last year, unlocking federal tax credits. Conversion of the building into apartments is now moving forward with a target opening of next year. Maransky’s team was uncertain of the potential impact of a loss of federal funding to historic redevelopment in general, but predicted it could lead to layoffs at PA SHPO and subsequently longer review times.

In PA SHPO’s most recent annual report the office reported that, in 2024 alone, it helped developers complete rehabilitation work on 22 properties across the state and also obtain $5 million in Pennsylvania historic tax credits. It reviewed 485 properties for inclusion on the National Register and listed 29. The office also reviewed thousands of submissions for other projects requiring various forms of federal and state review. 

In addition to the loss of funding, another major concern among developers is the lack of certainty, Weinstein said. Will the HPF funding be completely eliminated? If so, will there in fact be a reduction in staff at PA SHPO? What would that mean for the ability of developers to obtain the federal tax credits? All are questions currently eating at developers, he said. “We can deal with change. We can deal with different funding priorities,” Weinstein said. “But when you don’t know day-to-day what’s happening or what’s going to be funded it freezes your activities… you can’t work in an environment like that.”

It may be some months until a final answer is rendered. The congressional budget bill remains in committee and is expected to be subject to ample negotiations both within and between the House of Representatives and the Senate. The bill can be passed in both chambers with a simple majority, but that still means Republicans can only afford to lose a handful of defectors from their party. With no Democrats expected to vote for the bill, if there are even half a dozen Republican lawmakers willing to stand their ground on the HPF, the funding could be restored, at least partially. Congressional leadership is currently aiming for final passage on the bill some time in July.

Advocates must contend with similar dynamics in the Pennsylvania State House, where budget negotiations also are underway and could prove critical if federal funding indeed disappears. Crawford said preservation groups are encouraging supporters to reach out to all of their state and federal representatives and voice support for the funding. Specifically, Preservation Pennsylvania recommends contacting a congressperson and voicing support for the immediate release of 2025 HPF funds, funding the program at $225 million for 2026, and co-sponsoring of HTC-GO (H.R. 2941/ S.B. 1459), a bipartisan bill to “modernize” historic tax credits. “Our voices have to be loud enough to get something to happen,” said Crawford.

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