State, Local Budgets Tanking, Need Help Fast
With official unemployment at 10.2 percent, creating new jobs is a critical part of any economic recovery. But huge state and local budget shortfalls caused by the nation’s economic crisis will make joblessness worse unless state governments receive massive amounts of aid, according to a new report.
The report by Ethan Pollack, an Economic Policy Institute (EPI) policy analyst, says the recession has led to much lower tax revenues for state and local governments. Unlike the federal government, state and local governments must balance their budgets by law. So state and local policymakers are cutting spending and raising taxes, steps that will lead to lower consumer demand and more unemployment.
At an EPI forum yesterday to release the report, Trenton [N.J.] Mayor Douglas Palmer said mayors and governors could use additional federal stimulus money to create jobs now, improve the nation’s infrastructure and help small businesses—all of which would have lasting economic and environmental benefits.
