Cash strapped states get federal aid
Cash-strapped states from Maine to Hawaii are tearing up the pink slips – for now – relieved that the $26 billion state aid bill passed by Congress this week has saved hundreds of thousands of jobs. But it might be the last time the federal government comes to the rescue.
The legislation is a stopgap for long-term budget problems, letting states postpone hard choices at a time of record federal deficits. While the appetite for such cash infusions is wearing thin, some analysts say the latest package is essential to preserving the fragile economic recovery.
University of Rhode Island economics professor Leonard Lardaro says his state must fix its regressive tax laws and consolidate school districts to save money. He says the federal assistance lets lawmakers avoid tackling those problems.
Some officials cited a more practical concern – the teachers whose jobs were saved this time will likely be laid off next year, when the federal help runs out.