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Minnesota Public-Sector Jobs Benefit Most From Stimulus

Dave Umhoefer and Patrick Marley | The Milwaukee Journal Sentinel via YellowBrix

October 14, 2009

The main effect of the stimulus money that went to state and local governments was to prop up health care and education spending so the state could balance its budget without huge tax increases, Koskinen said.

Republicans not happy

Republicans on the Assembly Committee on Jobs, the Economy and Small Business noted that taxes were in fact raised in the last budget despite the aid from Washington.

After the hearing, Rep. Rich Zipperer (R-Pewaukee), a member of the committee, called the stimulus job report “very disappointing” because so few private-sector jobs appear to have been created.

He noted that the August survey of Wisconsin households showed 12,800 fewer employed than in July, and 118,600 fewer employed than one year ago.

And other Republicans said the report calls into question the whole stimulus program. “The point I take away from it is, this is government giving government money to create government jobs,” said Rep. Phil Montgomery (R-Ashwaubenon).

Top Democrats chose to highlight not the tangible job-creation/retention figure but a month-old White House estimate that the broader spin-off effect of the stimulus bill had boosted employment by some 22,100 jobs in Wisconsin.

“Those jobs are helping Wisconsin families keep a roof over their heads and food on the table,” Assembly Speaker Mike Sheridan (D-Janesville) said in a statement.

The report from Doyle’s office also found that under the federal stimulus funding:

• 240 homes are having lead paint removed.

• More than 89,500 meals have been provided to 9,175 homebound seniors.

• 476 people have received services meant to prevent homelessness.

• Almost 4,000 young people received summer jobs.

• 175 AmeriCorps members provided services at 139 locations.

The state used $632 million of the federal funds to help fill a giant budget hole. Supporters said that helped the overall economy by keeping people employed and saving essential government services; critics said it allowed the state to avoid making tough spending decisions.

Koskinen delivered a generally upbeat forecast Tuesday, but also made it clear that the budding recovery is fragile and that a return to pre-recession employment and income levels is two to three years off.

“It’s a long way back,” Koskinen said.

Wisconsin is “not the epicenter of the recession” and could see economic growth in 2010 that tops the U.S. average, Koskinen said.

Wisconsin’s status as the No. 1 manufacturing state in the country will benefit it as the recovery grows, Koskinen told the Assembly committee.

He said many states are facing far worse conditions than Wisconsin, citing in part the higher rate of housing speculation elsewhere.

New signs of wage growth could “easily be derailed” by a new shock to the economy, he said. The recovery, Koskinen said, “is just getting under way . . . and it doesn’t really have firm, established momentum.”

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