For Immediate Release
Thursday, March 07, 2002
House Republican Leaders Deal Major Blow to Reeling States, AFSCME Charges
Latest "Stimulus" Bill Would Mean $14.6 Billion Revenue Loss Over Three Years
WASHINGTON —Dealing a devastating blow to working families and states buffeted by skyrocketing health care costs at a time of recession, the Republican leadership pushed a bill through the U.S. House of Representatives today with tax cuts that worsen the crisis, charged the American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO.
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 and having increasing trouble providing vital services such as public safety, health care and education to their residents.
AFSCME President Gerald W. McEntee noted that the union strongly supports an extension of unemployment benefits, though more generous than the 13 weeks the House Republican leadership bill offers. But he accused the bill's authors of hypocrisy for first passing three "stimulus" bills loaded with tax breaks for corporations and the wealthy, and after coming under fire for doing nothing to help the economy and jobless, now appearing to do so while bullying states into enacting harmful spending cutbacks to cover the extra lost revenue.
"If Republicans truly favor giving state and local governments more power, why are they cynically snatching away these desperately needed revenues?" President McEntee said. "States and localities are on the front lines struggling to provide essential services, but this bill would put more pressure on them to take drastic measures that will hurt the economy and their residents." AFSCME and the bipartisan National Governors' Association have been lobbying the Bush administration and Congress to provide increased assistance to the states to deal with the rising cost of Medicaid, prescription drugs, and other health care costs. In this respect, the House leadership bill represents a giant leap backward, President McEntee argued.
"The U.S. Senate must see through this political ploy, remove these harmful provisions, and pass a balanced economic recovery package with immediate benefits and health insurance for the jobless and Medicaid assistance for the states," President McEntee added.
The following are state-by-state figures on the cost of the depreciation provision calculated by the independent Center on Budget and Policy Priorities:
Cost to States of Depreciation Provision, federal
fiscal years 2002 – 2004
(in millions of dollars)
| Alabama |
-135 |
Montana |
-52 |
| Alaska |
-168 |
Nebraska |
-81 |
| Arizona |
-262 |
Nevada |
not affected |
| Arkansas |
-129 |
New Hampshire |
-103 |
| California |
not affected |
New Jersey |
-633 |
| Colorado |
-210 |
New Mexico |
-95 |
| Connecticut |
-240 |
New York* |
-2,646 |
| Delaware |
-74 |
North Carolina |
-469 |
| DC |
-96 |
North Dakota |
-37 |
| Florida |
-511 |
Ohio |
-474 |
| Georgia |
-426 |
Oklahoma |
-115 |
| Hawaii |
-50 |
Oregon |
-246 |
| Idaho |
-75 |
Pennsylvania |
-814 |
| Illinois |
-872 |
Rhode Island |
-45 |
| Indiana |
-433 |
South Carolina |
-139 |
| Iowa |
-146 |
South Dakota |
-18 |
| Kansas |
-137 |
Tennessee |
-262 |
| Kentucky |
-176 |
Texas |
-810 |
| Louisiana |
-137 |
Utah |
-105 |
| Maine |
-72 |
Vermont |
-27 |
| Maryland |
-283 |
Virginia |
-330 |
| Massachusetts |
-645 |
Washington |
not affected |
| Michigan |
-144 |
West Virginia |
-86 |
| Minnesota |
-427 |
Wisconsin |
-337 |
| Mississippi |
-133 |
Wyoming |
not affected |
| Missouri |
-211 |
Total |
-14,118 |
* The total for New York includes revenue loss for New York City resulting from the interaction between the depreciation provision and the city’s income tax, as well as the revenue loss to the State.
