BTC recently released a report examining the economic consequences of the “whole budget”—taking into account both the plan’s $2.6 billion in spending cuts and its $1.6 billion in tax changes in FY2012-13—for all seven regions across the state. This blog post is one in a series detailing the results of this analysis.
According to this BTC report, every region will have more money taken of the local economy through spending cuts than is put back in through tax cuts. Rural regions are especially hard-hit, averaging a loss of $1.80 in spending cuts for every $1.00 put back into those regions through the tax cut, while urban regions only lose $1.50 in spending cuts for every $1.00 gained through tax cuts.
Contrary to the hopes of legislative leaders, the results of this unbalanced approach to budgeting are bad for the state’s economy across every region in the state.
Once the budget takes full effect in FY2012-13, the whole-budget impact will cost each region between 1,624 and 9,242 lost jobs and between $65 million and $486 million in lost labor income.
And critically, a large portion of these job losses occur in the private sector in industries like hospitals, healthcare services, and retail. These private sector job losses range from 42% of total employment losses in the Eastern Region to 60% in the Piedmont.
(Post author: Allan Freyer)