Sometime soon, in the next few weeks or few months, the federal government will begin to inject approximately $800 billion through spending programs and tax relief and incentives to help revive the American economy.
The best estimate is that Wisconsin will have access to about $3 billion to $5 billion from the federal spending and potential access to billions more to the extent that the state takes advantage of the tax relief and incentives.
Whether you are a Democrat or a Republican and whether or not you like the mix of spending and tax cuts in the stimulus package, one thing is clear: There are significant opportunities for southeastern Wisconsin businesses to help the economy, themselves and their employees. The key is being ready to take advantage of those opportunities.
To make sure that your business is ready, you should know the answers to these key questions:
What is Congress spending money on?
The stimulus package will provide significant funding for a wide variety of public infrastructure projects. The areas with the most significant funding will likely include highways, mass transit, alternative energy, energy transmission, energy efficiency, water and wastewater treatment, broadband and other telecommunication, housing and health care. So if your company does any work in these or similar areas, you should look closely at the package.
Where is the money going?
On the spending side, most of the money is going to state and local governments and quasi-governmental entities such as publicly-owned treatment works. Most of the projects will be implemented by private contractors, who will actually build the roads, water works, computer systems and other projects. So, you should gain knowledge about how government contracting works, as well as contacts to key state and local decision makers. In addition, in some areas, such as renewable energy development, funds will likely be made directly available to private companies. So, if you work in these areas, you should examine your projects to see if they can qualify to receive funding.
What tax incentives can I receive?
In addition to spending, the stimulus package will include significant tax incentives. No matter what your company does and regardless of its financial situation, it may be able to take advantage of these tax incentives, which likely will include the ability to carry back operating losses, incentives for hiring certain workers and the ability to expense rather than depreciate certain assets. In addition, there are targeted tax incentives for renewable energy projects, as well as manufacturing facilities that produce the components for those projects. Finally, there are significant expansions in tax-exempt bonding, as well as clean renewable energy bonds, energy conservation bonds and new market tax credits, which should provide significant low cost funding opportunities for a wide variety of projects.
So, no matter what you have heard, it is important to remember that there are a wide range of programs in the stimulus package, many of which may be available to help your company in 2009 and beyond.
