Media Release: State Budget Will Cost the Piedmont Triad 7,300 jobs
“Right-sizing” state government downsizes the region’s economy
RALEIGH (August 25, 2011) – The recently enacted state budget will have severe and negative impacts on the Piedmont Triad’s economy, according to a new report released by the North Carolina Budget & Tax Center.
“In a misguided effort to “right-size” state government during a jobs crisis, this budget’s $2.6 billion in spending cuts only serve to downsize the state’s economy, with especially negative consequences for the Piedmont Triad region,” said Allan Freyer, a policy analyst with the BTC. “This report demonstrates that deep cuts to public sector investments will also damage private sector businesses and increase unemployment across the board.”
Unlike other economic impact studies released during the recent budget debate, this BTC report examines 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 for FY2012-13—for all seven regions across the state, and the results are ugly for the Piedmont Triad. Specifically, the BTC report finds the following:
The budget’s spending cuts take more money out of the Piedmont Triad’s economy than the cuts put back in, causing the region to lose $1.62 in spending cuts for every $1 it gains from the tax cuts included in the budget.
In the addition, spending cuts will also more than wipe out any positive job creation related to the tax cuts in the Piedmont Triad, resulting in the net destruction of 7,300 jobs and $340 million in lost labor income by FY2012-13 when the budget fully phases in. Contrary to the hopes of legislative leaders, these job losses will hurt the private sector, too—60% of the jobs lost in The Piedmont Triad will occur in the private sector, in industries like hospitals, retail services, and medical-device manufacturers.
The budget is a bad trade-off for the Piedmont Triad, killing 2.8 jobs from spending cuts for every job gained from tax cuts.
The counties included in the Piedmont Triad Region are: Alamance, Caswell, Davie, Davidson, Forsyth, Guilford, Montgomery, Randolph, Rockingham, Stokes, Surry, and Yadkin.
FOR MORE INFORMATION, CONTACT: Allan Freyer, Public Policy Analyst, Budget & Tax Center, firstname.lastname@example.org, 919.856.2151; Jeff Shaw, director of communications, NC Justice Center, email@example.com, 503.551.3615 (mobile).