Economists Discuss State Recession, Federal Stimulus at CEA
Key state economists gathered at CEA today – along with reporters – to discuss a variety of topics from the depth of the state recession to the wisdom of how federal stimulus funds were applied by state policymakers. The reason for their meeting was the release of the Spring 2010 issue of The Connecticut Economy: A University of Connecticut Quarterly Review.
In an overview of the latest issue of the review, Steven Lanza, the review’s executive editor, compared the severity of Connecticut’s recession to that of other states. In a relative sense, it was not as deep in Connecticut for complex reasons from homebuilding to the finance industry.
As for the future, particularly the looming state budget deficit, Lanza warned that education is vulnerable . Lanza detailed the areas of the state budget that will have to do some “heavy lifting” unless revenues rise or changes are made in the tax structure.
John Yrchik, executive director of the Connecticut Education Association, has a guest column in the new issue of the review. He argued that Governor M. Jodi Rell’s use of federal stimulus money will put K-12 education at a disadvantage when the extra funding runs out.
Yrchik wrote, “By supplanting state education aid with federal dollars, Connecticut reduced its own contribution to public education by $269.5 million per year— a 14% reduction in state education aid to municipalities.” Connecticut created a funding cliff that other states did not.
Economist Arthur Wright summed up the situation telling reporters that Connecticut essentially squandered the stimulus. “We had a great opportunity to use the stimulus to create jobs, but we didn’t. We squandered the stimulus.”