WTC Records Folder 0123 Clippings label, Sept 2001

NYC 9/11 Public Portal Document

Flynn, Barbara From: [email protected] Sent: Tuesday, November 13, 2001 2:51 PM To: [email protected]; [email protected] Cc: [email protected]; [email protected]; [email protected]; [email protected]; piscitellia%busctr% [email protected] Subject: fwd: Federal Stimulus Package

Please see the attached FYI. Original Text ---------- ----------

From: Schupperl@CommExec@Centre, on 11/13/01 2:50 PM: To: EristoffA@CommExec@Centre Cc: HymanM@CommExec@Centre Several provisions in the House and Senate stimulus bills related to depreciation deductions will result in a significant revenue loss to the City unless we decouple from those provisions. The bill that passed in the House would allow firms to immediately deduct 30 percent of the cost of new capital investments (excluding real estate) rather than following the current depreciation schedule that could extend up to 20 years. This incentive would apply for purchases over the next three yearrs. The effect of the bill is to accelerate depreciation deductions into the first year as an incentive to buy new equipment or similar property. The Center on Budget and Policy Priorities estimates the cost to the State at $700 million a year for the next three years. We are working on an estimate for the City and I expect the number to be quite large.

TheSenate bill, approved by the Finance Committee, is smaller. It would provide a special "bonus depreciation", allowing firms to deduct 10 percent of the cost of new investments made over the next year. The Center's estimate of loss for the State is $270 million. The Senate bill also includes another provision that would allow firms to postpone the recognition of income from insurance proceeds if the proceeds are used to-purchase replacement property. I believe this will also result in a sizeable loss to the City if we do not decouple from this provision.

The only option is to get the State Legislature to decouple the City GCT, UBT , Bank Tax and Personal Income Tax from these provisions. We are contacting o the Statato see if they have a position on this issue, but I'm pretty sure they will want to do the same .

Visit the NYC Department of Finance online at www.nyc.gov/finance

NYC-WTC 000137026