Send the Stimulus to the States

I recently argued that, rather than sending out tax rebates to stimulate the economy, the money should be sent to state and local governments because they’re hurting and will spend the money. Case in point, Boston’s public schools:

The new superintendent of Boston’s Public Schools (BPS), Carol Johnson, dropped a bombshell this past week, declaring that her department has discovered an unanticipated budget problem so severe that millions of dollars’ worth of programs must be cut — some schools may even be forced to close.

….According to the BPS and Menino’s office, if no cuts are made, next year’s schools budget would be $846 million–eight percent above the current year’s allotment.

Menino wants to ask for $815 million–a four-percent increase–in the budget he will send to the City Council next month, so he is insisting that the school committee find $30.7 million to excise. This past week, committee members unveiled administrative cuts that get them halfway there, setting the stage for some $15 million in program cuts yet to be floated. That could include reductions in after-school programs and teachers’ aides, and even school closings….

Boston is hardly alone. All over the country, rising health-insurance and gasoline prices, combined with tightening state budgets, are straining to meet the demands of federal mandates. Miami-Dade County, in Florida, expects a $200 million deficit next year. San Francisco may be forced to lay off more than 500 teachers.

“It’s as real as real can be,” says John Connolly, newly named vice-chair of the City Council’s education committee. “There will be tough decisions on how to close the shortfall without ceding any ground on education.”

I would argue that a good strategy for weathering a recession should not involve closing schools and laying off teachers.

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2 Responses to Send the Stimulus to the States

  1. trog69 says:

    Good morning, Mike. Earlier today, I attended my grandchild’s elementary performance of “Cat on a hot tin…Okay, it was some dance and poetry gig, but the oncore was performed by the Music Director, who very earnestly suggested, both before, and after the show, that we pony up some of those checks to the school, should we care to see future performances.

  2. A says:

    Well, the ‘stimulus’ is a cheap political trick, whereby the current administration borrows money to hand an insignificant bit to every voter, to be repaid by higher taxes later (or inflation).
    Let’s hope the voters recognize this.–
    To put it in perspective, the Bear Stearns bailout had a loan guarantee by the Federal Reserve of 30 Billion $; divided by about 300 million inhabitants [or about 100 million households]of the U.S., that’s $100 per person or $300 per household, for just the first bailout. (And the Fed doesn’t even get a share position in Bear Stearns, we taxpayers just share in the losses).–
    And the War in Iraq, with a total cost of 3 trillion, (as per Joseph Stiglitz & Linda Bilmes’s new book) is costing us $30,000 per household. So that’s where the real priorities are.

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