Economic Stimulus Package Cost to States: $14.6 billion

Governors will be forced to make cuts in education, health care and transportation budgets in light of the recently passed stimulus package that will reduce state revenues but provide no financial assistance for states facing increasing health care costs, says the National Governors' Association (NGA).



H.R. 3090 contains a three-year, 30 percent bonus depreciation provision that would cost the 45 states with corporate income taxes calculated under federal rules an additional $14.6 billion over three years, according to the nonpartisan Congressional Research Service. This comes as the states, nearly all of which are required by law to balance their budgets, are facing a cumulative $50 billion budget shortfall.



What may further complicate matters is a new study from The Council of State Governments (CSG) that shows states could lose an additional  $14 billion over the next nine years in projected Master Settlement Agreement (MSA) tobacco settlement payments. States have collected $1.6 billion less than projections made in the MSA in 1998, the CSG study concludes.



SSTI has published a table that provides state-by-state figures on the cost of the depreciation provision. The table was prepared by the independent Center on Budget and Policy Priorities and provided by the American Federation of State, County and Municipal Employees. Although the official CSG study will be released to the states on March 20, 2000, a faxed copy of the executive summary may be obtained by calling (859) 244-8246 or writing press@csg.org. Full copies also can be mailed or faxed.



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