Media Release: State Budget Will Cost the Research Triangle 9,200 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 Research Triangle’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 Research Triangle 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 in FY2012-13—for all seven regions across the state, and the results are ugly for the Research Triangle. Specifically, the BTC report finds the following:
The budget’s spending cuts take more money out of the Research Triangle’s economy than the cuts put back in, causing the region to lose $1.64 in spending cuts for every $1 it gains from the tax cuts included in the budget.
In addition, spending cuts will also more than wipe out any positive job creation related to the tax cut in Research Triangle, resulting in the destruction of 9,242 jobs and $486 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—53% of the jobs lost in Research Triangle 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 Research Triangle region, killing 2.9 jobs from spending cuts for every job gained back from tax cuts.
The counties included in the Research Triangle Region include: Chatham, Durham, Franklin, Granville, Harnett, Johnston, Lee, Moore, Orange, Person, Vance, Wake, and Warren.
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).