Thursday, January 15, 2009

Everything's on the Table

With the state facing (according to some forecasts a $7 billion) deficit, the broad brush approach to collecting all available revenue (read: taxes) may have unintended consequences for the long-term state economy.

An easy mark for those seeking more taxes (oops: revenue) is to cancel all incentive programs. Sounds good unless you take the time to look at what that means. Of most immediate concern is the state's Manufacturing & Equipment (M&E) Sales Tax Exemption. This tax incentive program is estimated to cost the state (if manufacturers continue to expand and modernize once the tax is again imposed) about $400 million.

But a new study by John Urbanchuk, the original researcher for the study that convinced the state to adopt the M&E, that between NOW and 2016, it will create 54,100 new jobs, incomes of $22 billion, local and state tax revenues of $2 billion. AWB has promised to place the study and explanatory PowerPoints on their website.

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