The Connecticut Center of Economic Analysis at the University of Connecticut has released its latest economic outlook for the state, its December report, titled “Averting the Doldrums: Will Connecticut Avoid Recession?”
Here are a couple of excerpts from the executive summary:
“Job recovery has been … anemic, barely recovering a quarter of the jobs lost while the quality of jobs deteriorates. The unavoidable outcome has been tax revenues falling below projections, driving the current state budget into a significant deficit and confronting the Governor and Legislature with billion dollar deficits in each of the next two years’ biennial budgets, to be adopted next Spring. With the state’s economy still struggling to recover, the cuts in public sector expenditure will weaken the economy further, and may even put the state back into recession…”
“This Outlook again looks at the impact that significant cuts in the state budget may inflict on the state’s economy by modeling $200 million cuts in each year of the biennium. Such cuts would cost more than 5,000 jobs each year; if cuts rose to a billion dollars, the result would be a loss of about 25,000 jobs each year, eliminating essentially all jobs created since the recovery began. The current forecast anticipates little capacity of the private sector to offset the impact of public sector contraction. Ironically, Super Storm Sandy may help improve conditions as the region rebuilds…”
Go here for the full report.