‘Fiscal Cliff’ Deal Also Doles Out Millions for Hollywood, Railroads, Rum Producers

The mix of tax perks covering the next year, but with budget implications for the next two years includes these:

$430 million for Hollywood through “special expensing rules” to encourage TV and film production in the United States.  Producers can expense up to $15 million of costs for their projects.

$331 million for railroads by allowing short-line and regional operators to claim a tax credit up to 50 percent of the cost to maintain tracks that they own or lease.

$222 million for Puerto Rico and the Virgin Islands through returned excise taxes collected by the federal government on rum produced in the islands and imported to the mainland.

$70 million for NASCAR by extending a “7-year cost recovery period for certain motorsports racing track facilities.”

$59 million for algae growers through tax credits to encourage production of “cellulosic biofuel” at up to
$1.01 per gallon.

$4 million for electric motorcycle makers by expanding an existing green-energy tax credit for buyers of plug-in vehicles to include electric motorbikes. Read more >>

Florida 19th State to Borrow Unemployment Money

Olga Pierce, ProPublica

Florida has become the 19th state to borrow money to keep unemployment benefits flowing after the trust fund ran dry.

So far the state has borrowed $45 million, but officials estimate that it will have borrowed $1.2 billion by the end of the year.

As we detailed earlier this year in our series with public radio's Marketplace, states operate their own unemployment insurance systems [1] with little federal control over benefit levels and how well they choose to finance their systems. Like many states, Florida requires employers to pay unemployment insurance tax only on the first $7,000 of each employee's income -- the federal minimum, which has not been updated since 1983.

Because of the stimulus bill, states have until January 2011 to pay back their loans with no interest. But if Florida's balance is not repaid before then -- a process that in many states has necessitated business tax increases or benefit cuts -- Florida will face tens of millions of dollars of interest payments that must be repaid from its general fund, taking money away from other state priorities. Is your state's trust fund in danger of running out? See our interactive map.