Usually A Job Engine, Localities Slow Us Economy

share: digg facebook twitter WASHINGTON (AP) — In a healthy recovery, states and localities produce jobs, expand social services and help fuel the nation's economic growth. [...] ordinary Americans are feeling it — from reduced services to fewer teachers, police officers and firefighters. Mark Vitner, senior economist at Wells Fargo Securities, expects state and local governments to slash 20,000 to 30,000 jobs a month through the middle of 2012. Joel Naroff of Naroff Economic Advisors notes that when states cut spending to balance their budgets, as required annually, a ripple effect multiplies the damage: "There's a whole slew of private companies that have to cut back when they don't get the (government) contracts they had been getting," Naroff said. — In Alameda, Calif., police and firefighters last week couldn't save a drowning man in the ocean because the fire department had cut funding for water rescue training, wet suits and other equipment. State tax revenue is forecast to rise 2.1 percent in the fiscal year that starts July 1, according to a report last week from the National Governors Association and the National Association of State Budget Officers. Steven Leslie, financial services analyst for the Economist Intelligence Unit, a research firm, predicts that tight government spending at the local, state and federal levels will persist during a prolonged period of slow growth.