UConn: Economic Outlook Is Good, With Reservations

A new UConn study has a positive economic oulook, but it comes with a warning. 

The study indicates that without major government cuts, we can expect a modest recovery in the Connecticut economy and employment, but reductions to close a budget gap could undermine economic growth.

The impact of a $2 billion cut in state spending would deliver only about 75 percent of the spending cuts policy makers want because welfare payments would rise and the tax base would be eroded, according to the November Connecticut Economic Outlook.

The report calls for "smart efficiency-based" cuts, rather than across-the-board spending reductions, restructuring the revenue base, providing stimulus with state bonding of capital projects and encouraging private sector investment and job creation.

A budget framework presented to Gov.-elect Dan Malloy's chief of staff in a meeting with Gov. M. Jodi Rell's budget officials shows that the new budget year that begins July 1 is forecast to be $3.44 billion in deficit. 

Malloy will unveil his official two-year budget in February.

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Copyright AP - Associated Press
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