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Facing More Layoffs, States Say Stimulus Falls Short

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Jake Thompson, a spokesman for Nelson, defended the stimulus, saying that forestalling state layoffs had not been its main goal. "This is a stimulus bill, not a state bailout bill," he said. "While the economic recovery bill will undoubtedly help states with their budgets and employment, the primary intent was to stimulate the economy."

Collins was equally blunt: "The fundamental purpose of the stimulus bill is to save and create jobs and help get our economy moving again," she said. "The bloated House-passed bill stood no chance of passing the Senate."

The White House, meanwhile, has conceded that the final package was smaller than it had expected. Shortly before the bill was signed, Chief of Staff Rahm Emanuel said, "We clearly thought that economic activity needed [a larger stimulus], but it was more important to get it done than argue about just that."

Officials in some states say they are grateful for and satisfied with the money. Maine has had to lay off 250 people, but because of the stimulus it will be able to avoid more layoffs, even after discovering a new $570 million shortfall. "Without any recovery funds . . . we would be in a very, very different situation," said Maine finance commissioner Ryan Low.

Virginia Gov. Timothy M. Kaine (D) said the state would have had to cut 7,000 jobs without the stimulus but ended up eliminating 1,500 mostly open slots. Maryland avoided layoffs with furloughs and by using an unusually large share of its stimulus funds in next year's budget.

In some states, layoffs are occurring partly because legislators are not taking every step to avoid them. Republican lawmakers in Missouri want to use less than a third of the state's $2.1 billion in flexible stimulus funds to close budget shortfalls. They want to proceed with cutbacks and return $1 billion of the money to residents in the form of tax cuts. Using the money to plug budget gaps, they argue, will leave a deficit once the stimulus money is gone in 2011.

Scott Pattison, executive director of the National Association of State Budget Officers, noted that some cuts may be justified. "You never want to see an individual be removed, but sometimes lost in the discussions is whether some of these positions should be eliminated," he said.

But in most states facing big layoffs, officials say they made the easy trims long ago. For instance, Florida's court system has cut 200 employees in the past 18 months. Judges lack staff members to prepare materials for trials at a time when property crimes and foreclosures are up significantly. The state cut so many hearing officers for traffic infractions that drivers started to realize that there was no one to hear cases and contested more tickets. This meant a big drop in revenue -- leading the state to rehire some of the officers.


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