SportsTurf and its sister publications, Arbor Age, Outdoor Power Equipment and Landscape & Irrigation, are presenting a series of interviews and articles on the economy’s effect on the Green Industry: the recession, the stimulus package and what they mean to us. Our findings will be presented during the coming weeks on our websites, followed by in-depth articles in our upcoming issues. In this installment, we hear from Joe Cunningham, Vice President of Marketing, for Jacobsen, a Textron Company.
ST: Would you say that the passing of the economic stimulus is positive or negative for the sports turf industry? Why?
Cunningham: I suppose it depends on how you define the sports turf industry. Parks and recreation spending should see some benefit from the public works projects. Also, people might not fly away on vacation because money is tight but they [still] need a place to play. I believe little leagues and town leagues will be very important to families during this slow down.
ST: What type of feedback are you receiving from your customers regarding the stimulus?
Cunningham: Most are worried about the spending but they hope it will help the economy. The big question on people’s minds seems to be “will it help or is it a waste?” No one really seems sure.
ST: How has the recession affected your customers most acutely?
Cunningham: Customers are looking for solutions that increase productivity and reduce expenses. They need to do more with less.
ST: What are you recommending to your customers during this recession?
Cunningham: Leasing. It will really help your cash flow for the next few years. We have some attractive lease options.
ST: What is your outlook on economy long term?
Cunningham: Long term the U.S. always comes roaring back. It may seem grim at the moment but we will get through it, we always do. People that focus on quality will be valued and get through it fine.
The American Recovery & Reinvestment Act (ARRA) was signed into law last month. The $787 billion stimulus package is designed to kick-start the sagging economy and get millions of Americans back to work.
The stimulus plan includes tax relief for middle-income families and spending programs for things like transportation, environmental and broadband infrastructure projects, aid for states and energy assistance, all designed to create millions of good-paying jobs.
The good news is that 95% of America’s taxpayers will benefit from at least one of the tax breaks. Unlike the 2008 “economic stimulus,” there will not be rebate payment checks sent to the majority of Americans. While some of the relief will be paid this year, the majority of the relief for an average taxpayer is most likely to come next year.
Key taxpayer provisions:
Tax credit for workers: for 2009 and 2010 there is a “making work pay” tax credit of up to $400 for working individuals and up to $800 for couples
Temporary suspension of taxation on unemployment benefits: the jobless get a little more help with a $25 increase in weekly benefit checks through 2009 and suspension of federal tax on the first $2,400 of unemployment benefits received in 2009
Retirees and disabled individuals: those receiving Social Security benefits and individuals on disability will receive a one-time payment of $250 in 2009
First-time home buyer credit: increased to $8,000 for qualified first-time homebuyers purchasing homes after Dec. 31, 2008 and before Dec. 1, 2009; repayment requirement waived unless sold or no longer principal residence within 36 months
“American Opportunity Tax Credit” for education: an ‘enhanced’ Hope credit applies to the first four years of college; it provides 100% credit for the first $2,000 and 25% for the next $2,000 on qualified expenses such as tuition and books; the credit is 40% refundable, meaning even taxpayers who have no tax liability can receive a credit for 40% of qualified college expenses, up to $1,000
529 plans: qualified computer technology and equipment is now allowed as higher education expenses from the plan, so distributions from 529 plans to buy a computer, for example, for college will not be taxable
Earned Income Tax Credit: increased EITC amounts for families with 3 or more children and additional marriage penalty relief
Additional Child Tax Credit: earnings threshold is lowered to $3,000, helping more people qualify for the credit and receive more money; for 2008 the earnings threshold was $8,500
Vehicle purchase: state and local sales taxes paid for purchases of qualified new motor vehicles are deductible
AMT: the one year typical patch for 2009 of the Alternative Minimum Tax (AMT) to prevent as many as 24 million middle-income households from being hit with a tax that was originally designed to prevent the very wealthy from avoiding taxes.