The Senate reconvenes on December 4th in whatís commonly called a ďlame duckĒ session. Usually a lame duck session means that with the election over, little is expected to be accomplished until the new Congress begins in January. But Iíll be working hard to make sure this short session is not lame, but very productive, especially when it comes to extending tax incentives for Mississippiís hurricane-stricken counties.
As you may recall, last year we passed almost $8 billion in tax relief to help the Gulf States recover from hurricanes Katrina and Rita. Collectively these provisions are called the Gulf Opportunity Zone or GO Zone, because they apply to counties hardest hit by the hurricanes. In Mississippi the GO Zone reaches from counties along the coast, extending northeast to Lowndes County and northwest to Humphreys County.
GO Zone incentives were designed to help restore jobs and replenish pocketbooks throughout the region, as well as to lure new investment. My reasoning in designing the GO Zone initiative was simple: The first and best way to spur recovery is to get folks back to work, earning a much-needed paycheck. The quickest way to do that is to lower the cost of doing business for all employers, making it easier for them to buy new equipment, deduct expenses and hire or rehire workers.
A year into this program, our stateís economy and employment statistics show GO Zone is working for Mississippi. Weíve got to keep it going by prodding Congress and the Administration to extend several expiring GO Zone provisions. Depreciation expensing breaks allowing businesses to dramatically reduce their property acquisition expenses are key among them.
For example, if your company makes any sort of improvement to property being used in its business, you can claim an additional first-year depreciation deduction equal to 50 percent of the cost of that new property. This will avoid additional taxes and save money.
This, like some of the other GO Zone provisions, will expire in the coming years. Itís become clear to me that this many not be enough time for Mississippi businesses to take advantage of the GO Zone, especially given the challenges still before us, like labor and material shortages, as well as questions about financing and insurance.
Iíll be working to ensure the Senate passes extenders for several expiring GO Zone provisions before the lame duck session ends later this month. Particularly important for individual Mississippians, we should extend GO Zone provisions that expand low-income housing tax credits to ensure that we have an adequate housing supply.
We also must prolong tax relief provisions which include tax credits for military combat pay, New Market Tax Credits to boost investments in economically-challenged communities, tuition deductions, welfare-to-work incentives and provisions that allow cash-strapped, disaster-struck cities and counties to restructure their debt.
The American people canít afford a typical lame duck session from this Senate. Mississippians deserve much more. With our nation at war and millions still recovering from our worst natural disaster, the Senate must move forward. And we should start by making sure that the GO Zone keeps going.
Senator Lott welcomes any questions or comments about this column.
Write to: U.S. Senator Trent Lott, 487 Russell Senate Office Building, Washington, D.C. 20510 (Attn: Press Office) or Email