The Multiplier Effect

Randy Stapilus,at Ridenbaugh.com, points out one more unintended consequence of Idaho’s “slash and burn” budget.

In Oregon, the campaign against two tax measures on the ballot – which passed – was centered around the idea that those taxes were “job-killing.” In Idaho, the very notion of a tax increase of any sort is way off the table, in large part because of that same assumption, that taxes imposed on people and businesses will kill private sector jobs. (There’s probably a grudging acknowledgement that public sector jobs would be saved, but that appears to be a lesser factor.)

But consider this point from the latest Idaho Reports program from this weekend, reviewing the state of the budget-setting Idaho. The matter of jobs may not be quite so simple.

The subject was the state budget and jobs, as discussed by three members of the budget-writing Joint Finance-Appropriations Committee. Here’s Democrat Wendy Jaquet:

“What bothers me as we lay people off because we don’t have this revenue, or we think we don’t have the revenue, then we have kind of a multiplier effect. I asked the director of the Department of Health & Welfare how many private sector jobs would be lost [under current budget proposals] because most of our [services] are done by private providers. And he estimated on the worst-case scenario, which is where we’re headed, it would be about 8,000 private-sector jobs. So its like we’re creating a downward spiral, and that’s what I find really worrisome.”

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