As reported by the New London Day, August 21, 2009.

State Needs Recovery Plan to Stem Job Losses

A recent report from the Connecticut Center for Economic Analysis at the University of Connecticut offered a pessimistic job outlook through 2010 - concluding that state policies are hurting, not helping, the situation - and issued a call for action.

Report author Peter Gunther, a senior research fellow at the Connecticut Center for Economic Analysis, wrote, “State action is contributing to the contraction of the state's economy in the short run and undermining its capacity to recover in the long run.”

In particular, Mr. Gunther points to the sharp reduction in state-funded capital projects, a move he said is “costing the state thousands of jobs and the income they generate.”

The report strongly urges the administration of Gov. M. Jodi Rell to develop a recovery plan.

”This outlook underlines the importance of such state initiative - the assumption of a strong national recovery fails by itself to begin the process of job creation in Connecticut,” the report concludes. The author, not us, added the italic emphasis. It is critical, he wrote, for the administration to “develop and implement a coherent, focused economic strategy.”

What could a recovery plan look like? It could prepare Connecticut to take best advantage of the “green revolution” in energy efficient, environmentally sensitive products. It would back the “University Hospital” plan to merge the University of Connecticut Health Center and Hartford Hospital, creating a 1,100-bed teaching and research medical institution. This could form the nucleus of a powerful life-sciences cluster creating upwards of 20,000 well-paying jobs, states the report. Support for tourism and using the film tax credit to continuing luring entertainment-industry jobs to the state should also find a place in such a plan.

The report should strengthen the hand of Democratic leaders in the legislature as negotiations continue with the Republican governor on passing a two-year budget and closing the nearly $9 billion deficit projected over the next two years.

It recommends that Connecticut reverse its steep cuts in capital projects and adopt a “balanced approach” to addressing the “massive budget deficits.” That language favors the Democratic strategy of balancing spending cuts with tax increases rather than Gov. Rell's emphasis on reducing government spending.

We agree with the governor's resistance to tax hikes, but given the economic analysis she may have to go further in accepting them than she, or we, would have liked. Job growth is vital, and cutting government too deeply, too quickly would be counterproductive.

On calling for development of a recovery plan, the report is spot on. This administration has been slower than those in other states to funnel federal economic stimulus money into the Connecticut economy. For example, $455 million in stimulus money is set aside for transportation work, but contracts are signed for 15 projects totaling just $174 million. All told, Connecticut expects to get $3 billion in stimulus money.

The report predicts Connecticut could lose an additional 35,000 jobs over the next year, leaving it with 1.62 million jobs, fewer than it had 20 years ago. That's hardly progress. About 70,200 jobs have been lost since March 2008 alone.

This is a disaster, and not a natural one. And disasters require recovery plans. Along with Mr. Gunther, we await one.