MEDIA RELEASE: Study: Job losses from state budget cuts could devastate economic recovery

Study: Job losses from state budget cuts could devastate economic recovery
Gov. Perdue’s proposed cuts could cost 21,000 jobs, crippling the public structures vital for long-term growth

RALEIGH (Dec. 20) – With unemployment already close to 10 percent, a new study finds that state budget cuts could result over 21,000 more unemployed, hampering economic growth and thwarting North Carolina’s recovery.

Gov. Beverly Perdue has requested budget cut proposals from state agencies that would amount to 10 percent for public schools, community colleges, and universities and 15 percent for all other services.

The study, released this morning by the NC Budget & Tax Center, analyzes the economic impact of these potential cuts. One crucial point: an approach based on cuts would not just undermine jobs in the public sector, but slash private-sector employment as well.

“Job creation has to be our leaders’ top priority,” said Alexandra Forter Sirota, director of the NC Budget & Tax Center and author of the report. “Preserving jobs and the vital public structures that support growth is absolutely fundamental to economic recovery.”

The report’s key findings:

•    The budget cuts from state agencies providing proposals, under a 15 percent scenario for all departments and a 10 percent scenario for education, will result in the elimination of more than 21,000 positions, which represents 7.4 percent of the state government workforce in 2010.

•    There will also be very direct—in addition to substantial indirect—cuts in private-sector jobs due to the loss of contracts as well as the decline in consumer spending resulting from newly unemployed workers reducing their purchases of goods and services. 

•    A cuts-only approach will not only result in job losses but could negatively affect a variety of public services that pave the way to long-term growth of the economy.  

FOR MORE INFORMATION, CONTACT: Alexandra Forter Sirota, 919.861.1468, alexandra@ncjustice.org; Jeff Shaw, director of communications, 503.551.3615, jeff@ncjustice.org.

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