Model state resolution on jobs crisis

Model resolution calling on the President and Congress to enact a comprehensive job creation and state fiscal relief plan (Progressive States Network)

A resolution to memorialize the President of the United States and the United States Congress to enact a new, broad-based job creation plan, including significant additional fiscal relief to states and local governments to foster economic growth and create and maintain jobs across the nation.

Whereas, almost eight million more Americans are unemployed today than at the start of the recession in December 2007,

Whereas, the number of Americans who are unemployed or underemployed has reached over 27 million,

Whereas, state tax revenues dropped nine percent during fiscal year 2009, the largest decline since the years directly following World War II,

Whereas, states are facing an estimated $350 billion budget shortfall in 2010 and 2011,

Whereas, teachers, nurses, police officers, fire fighters, and many workers across the state face the dire prospect of job loss during a time of economic uncertainty,

Whereas, families will have to deal with the reality of budget cuts: larger class sizes, an inferior educational asystem, reduced health care and safety services, and generally diminished quality of vital public programs,

Whereas, further budget cuts will only deter consumer demand, discourage private industry activity, lead to higher unemployment, and hamper overall economic growth,

Be it resolved by the [House of Representative or Senate] of the State of _______________________, that we hereby memorialize the President of the United States and the United States Congress to take proactive steps to create jobs and enact fiscal relief for state and local governments to foster growth, avoid further budget catastrophe, ensure that states perform the core functions that all American families deserve, and deliver jobs to Americans on Main Street,

Be it further resolved, that any job creation and state fiscal relief plan must include extending FMAP increases for Medicaid, providing additional support for education, boosting funding for infrastructure projects and public transportation investments, supporting the long-term unemployed to sustain them until they reenter the workforce, and providing direct financial assistance to state and local governments to perform the vital services needed to maintain growth in local communities across the nation,

And be it further resolved, that copies of this resolution be transmitted to the President of the United States, the President of the United States Senate, the Speaker of the United States House of Representatives, and the members of (state) congressional delegation.

Posted by Chuck Bell at 6:27 AM    

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More action needed to help ailing states preserve and create jobs

Good info from Progressive States Network on State Budget Crisis

Last month, President Barack Obama signed the $17.5 billion Hiring Incentives to Restore Employment (HIRE) Act into law to assist small businesses and spur job creation. This was definitely a start, but the gravity of the current crisis demands much bolder and quicker action. Congress needs to enact further state fiscal relief to support jobs and avoid the massive layoffs that threaten social and economic vitality in the states.

Federal action is still needed to provide support for state Medicaid programs by extending the increased medical assistance percentages (FMAP), boost funding for educational programs, invest in infrastructure projects and public transportation, support the long-term unemployed to sustain them until they reenter the workforce, and provide direct and comprehensive financial assistance to state and local governments to perform the vital services needed to maintain growth in local communities.

In the past few months, Congress has started to take action:

• Jobs for Main Street Act (H.R. 2847): On December 16, 2009, the House passed this bill, which would redirect money from the Wall Street bailout to fund environmental and infrastructure projects, extend FMAP, support education jobs, and provide small business loans. The bill would additionally provide funding to public safety and law enforcement jobs, address public housing needs, and invest in clean and safe water projects.

• American Workers, State, and Business Relief Act of 2010 (H.R.4213): On March 10, the Senate passed this piece of legislation to provide state fiscal relief through FMAP increases, provide support for the long-term unemployed though Unemployment Insurance and COBRA extensions through the end of December 2010, reverse a scheduled 21 percent payment cut for doctors who provide services through Medicare, and extend several tax breaks, such as the research and development tax credit. The bill also raises almost $40 billion in new revenue by reducing a biofuel tax break utilized by the paper industry and strengthening tax shelter rules.

• The Local Jobs for America Act (H.R. 4812): Rep. George Miller (D-CA) introduced this bill last month to provide $75 billion to local communities to hire needed staff over two years, funding for 50,000 private-sector training jobs, $23 billion to support education and teaching positions, and $1.18 billion for law enforcement. Overall, the legislation would appropriate $100 billion to job creation efforts. Within a month of its introduction, the bill already has 105 co-sponsors.

Individuals and advocacy organizations should press their Congressional leaders on the need for action. If you are a state or local lawmaker, please sign onto this letter calling on the President and Congress to enact a comprehensive jobs plan, including relief to states and local governments to foster economic growth and create and maintain jobs.

Resources:


Campaign for America's Future - Major New Jobs Bill Gains 105 Co-Sponsoring


Center on Budget and Policy Priorities - Recession Continues to Batter State Budgets; State Responses Could Slow Recovery


Center on Budget and Policy Priorities - An Update on State Budget Cuts


Economic Policy Institute - Dire states--State and Local Budget Relief Needed


Economic Policy Institute - Jobs Crisis Fact Sheet


Progressive States Network - Take Action: Additional Federal Job Creation and State Fiscal Relief

Posted by Chuck Bell at 6:15 AM    

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More Federal Help Needed for Stressed State Governments

From AFL-CIO Now Blog

"...[S]tates face a two-year $357 billion budget shortfall for the fiscal years 2010 and 2011, while local governments face an additional $80 billion deficit. The American Recovery and Reinvestment Act provided much-needed relief, but its $106 billion in aid to states fills only about 25 percent of the shortfall. The rest of the budget must be balanced by spending cuts and tax increases. Click here to read the report, “Dire States: State and Local Budget Relief Needed to Prevent Job Losses and Ensure a Robust Recovery.”

"State and local spending cuts can be particularly harmful to the economy, Palmer and Pollack said. Not only do they deprive citizens of needed public services like health care, transportation, education and safety, they also fall disproportionately on the backs of those with low incomes. Businesses’ sales fall, forcing firms to slash wages or lay off workers, and these workers then cut their own consumer spending. As a result, each dollar of spending reduction by state and local governments leads to $1.41 in lost economic activity."

"Without additional state and local budget relief, current and future shortfalls will cause millions of job losses and likely contribute to a drawn-out and painful recovery."

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Posted by Chuck Bell at 5:12 PM    

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Majority of states face severe budget problems

STATE BUDGET TROUBLES WORSEN
By Elizabeth McNichol and Iris J. Lav
Center on Budget and Policy Priorities 6/29/09

The ongoing decline in tax receipts has worsened state budget problems. At least 48 states addressed or are facing shortfalls in their budgets for the upcoming year totaling $166 billion or 24 percent of state budgets. New data show a majority of states expect shortfalls in 2011 as well. Aggregate gaps through 2011 likely will exceed $350 billion...

...If revenue declines persist as expected in many states, additional spending and service cuts are likely. Budget cuts often are more severe in the second year of a state fiscal crisis, after largely depleted reserves are no longer an option for closing deficits.

The experience of the last recession is instructive as to what kinds of actions states may take. Between 2002 and 2004 states reduced services significantly. For example, in the last recession, some 34 states cut eligibility for public health programs, causing well over 1 million people to lose health coverage, and at least 23 states cut eligibility for child care subsidies or otherwise limited access to child care. In addition, 34 states cut real per-pupil aid to school districts for K-12 education between 2002 and 2004, resulting in higher fees for textbooks and courses, shorter school days, fewer personnel, and reduced transportation.

Expenditure cuts and tax increases are problematic policies during an economic downturn because they reduce overall demand and can make the downturn deeper. When states cut spending, they lay off employees, cancel contracts with vendors, eliminate or lower payments to businesses and nonprofit organizations that provide direct services, and cut benefit payments to individuals.

In all of these circumstances, the companies and organizations that would have received government payments have less money to spend on salaries and supplies, and individuals who would have received salaries or benefits have less money for consumption. This directly removes demand from the economy. Tax increases also remove demand from the economy by reducing the amount of money people have to spend – though to the extent these increases are on upper-income residents that effect is minimized because much of the money comes from savings and so does not diminish economic activity.

The federal government — which can run deficits — can provide assistance to states and localities to avert these “pro-cyclical” actions...

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Posted by Chuck Bell at 6:17 PM    

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Where's the Federal Help for State and Local Government?

As we pointed out in the Progressive Populist many months ago, the economic stimulus package adopted by Congress should have included help for struggling state and local government, as it was easy to forsee that their budgets would be hit in a downturn. It's not too late for Congress to revisit this issue.

As reported by VOA News:

In the House Ways & Means Committee, state governors, a city mayor, and state and local officials called for another government stimulus plan.

New York Governor David Paterson said his state is among 25 U.S. states facing huge deficits. "There are 25 states in deficit, totaling more than $48 billion of debt. Their projections for 2010 are spiked upward incredibly. There will be 39 states in deficit and the amounts owed total over $105 billion."

Among more dire warnings, Robert Greenstein, of the Center on Budget and Policy Priorities, spoke of potential sharp increases in poverty, with Americans facing what he calls holes in the social safety that did not exist during previous deep recessions in the 1970's and 1980's: "I think we are facing a growing prospect of levels of destitution, not just poverty, destitution, severe hardship and increases in homelessness that we haven't seen in several decades," he said.

Among other things, New York's Gov. Paterson called for Congress to approve an increase in the Federal Medicaid match (FMAP) to help states deal with increased costs for health care because of rising unemployment. An increase in the FMAP is critical both for ensuring financial health of state Medicaid programs, and preventing job losses that will aggravate the economic slowdown.



The US Conference of Mayors is calling for an $150 billion Main Street Stimulus package (nice name!!), which would include extended unemployment benefits, additional support for food stamps, and funds for short-term infrastructure projects.


A second stimulus package is also strongly supported by the AFL-CIO.

All initiatives of our Main Street Stimulus meet the jobs and infrastructure criteria of quick short-term investments to stimulate Main Street with jobs for unemployed workers and economic activity for businesses in our metro areas. We have added three initiatives to the House-passed bill. They are Community Development Block Grants (CDBG), Infrastructure, Green Jobs- Energy/Environment Block Grants, and Public Safety. In addition, we are adamant that highway funds must be distributed through the Surface Transportation Program to ensure the flexibility of funding will be given directly to our local officials to meet the infrastructure needs in our metro areas.

In all three of these initiatives, CDBG, Energy Block Grants, and STP, upwards of 30 percent would be sent to the 50 states. The remaining 70 percent of these three initiatives would go to cities and county areas - which accounts for 90 percent of the nation’s gross domestic product.

Posted by Chuck Bell at 6:13 AM    

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