The new fiscal year starts in most states tomorrow, but don’t expect governors and state legislators to mark the occasion with champagne. From Augusta to Austin, Tallahassee to Sacramento, the mood is dour.
BEYOND THE NUMBERS
Combining bad economics with bad fiscal policy, opponents are on the verge of defeating the compromise jobs bill before the Senate, and we can expect more hardship and a slower economic recovery as a result.
As I’ve said before, the case for extending unemployment insurance (UI) benefits and state fiscal assistance is powerful:
When New Jersey Governor Chris Christie claimed that his proposed budget would “protect and care for the most vulnerable among us,” he apparently was referring to the state’s millionaires rather than its low-wage workers.
As Ezra Klein’s research desk explains, most studies show that rich people don’t flee higher-tax states for lower-tax ones and “the revenue generated by state tax increases on high earners overwhelms that lost from taxpayers’ leaving.” (Brad DeLong and Matthew Yglesias also discuss this issue here and here.) In fact, raising taxes on the highest-income households — a group that’s enjoyed the greatest rise in incomes and the greatest decline in taxes in recent decades — is a sensible and effective way for states to help offset the huge drop in revenues during the recession.
“Most striking is the sense of political paralysis in both chambers and an almost visceral hunkering down in the face of the tough choices ahead,” Politico’s David Rogers wrote this morning regarding the Senate’s failure thus far to approve pending jobs legislation.
Today, we sat down with Michael Leachman, a Senior Policy Analyst at the Center, to discuss the latest information showing that the Recovery Act is creating jobs and boosting the economy.
“[W]e cannot commit to raising [educational] standards in one breath and turn around and issue layoff notices to thousands of teachers in the next,” columnist David Broder wrote yesterday, terming it “unconscionable” for Congress to fail to help states avert these layoffs. I couldn’t agree more.
As my colleague Chad Stone explained this morning, today’s jobs report shows that “unemployment is still very high, and jobs are still hard to find.”