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Glimmers of good economic news can't alleviate fears of the future

Date: 11/25/2009

By G. Michael Dobbs

Managing Editor



WEST SPRINGFIELD -- While there were glimmers of good economic news in the state last week, some area legislators expressed concerns about the overall financial health of Massachusetts at the annual Legislative Reception sponsored by the Affiliated Chambers of Commerce of Greater Springfield Thursday night at the Carriage House on the Eastern States Exposition grounds.

The Executive Office of Labor and Workforce Development reported last week the unemployment rate in Massachusetts dropped from 9.3 percent in September to 8.9 percent in October, the first monthly rate decline since June 2007.

The release also noted jobs were down 900 for the month of October. The Professional, Scientific and Business Services; the Education and Health Services; and the Government and Construction sectors added jobs in October, while Manufacturing; Trade, Transportation and Utilities; Information; Financial Activities and Other Services recorded job losses.

The October national unemployment rate was 10.2 percent compared to 9.8 percent in September. The September job loss for Massachusetts, which was originally reported at 9,200, was revised upwards to 9,300. At 3,175,400, jobs are down 101,500 or 3.1 percent from one year ago, the state office reported.

Kevin Lynn, manager of business services at Future Works in Springfield, also had positive news last week. Lynn said job posting activity continues to show improvement.

"Since August the number of job openings posted has registered increases when compared to the same month a year ago. While October's 261 openings are still seven percent below October 2008, we may finally be in the position in November to outperform the previous year's activity. Also, businesses saw worker productivity jump almost 10 percent in September. Inventories are at their lowest levels in four years and retail sales recently ticked up one percent. Together these factors could be setting the stage for hiring," he wrote.

With this in mind, Reminder Publications asked a number of legislators the following question: Many people nationally say the recession has ended, but do you think it's over in Massachusetts and especially in Western Massachusetts?

As a follow-up question, the legislators were asked if they thought there would be the possibility for another round of mid-year budget cuts from Gov. Deval Patrick.

State Rep. Angelo Puppolo believes the state is "still in a lull."

"I'm somewhat encouraged by last month's [state] revenues," he added.

He believes the decline in the state's economy has been stopped and "in Western Massachusetts ... a lot of great things are going on."

"We have a ways to go, but we're not as bad as other places," he said.

The possibility of further mid-year budget cuts from Patrick -- the Legislature would have to authorize Patrick to have the power to make those cuts -- rests on the state revenues for December and January, Puppolo said.

State Rep. Rosemary Sandlin called herself optimistic and that she sees the glass half full, but she doesn't see the recession as ended in the state.

"We may have plateaued, but we may not have hit bottom," she said.

She added, "For a working man in Western Massachusetts it's tougher to come back ... People are calling my office. They still are having problems."

Sandlin predicted there would be more mid-year budget cuts as well.

Without even hearing the question, State Rep. Joseph Wagner said his answer is "jobs."

Once hearing the question, Wagner said the unemployment report is an "encouraging sign."

"We've got a real problem between state spending and revenues," he said. He added that tax revenue is the "lifeblood" of the state and with more people working there is less of a burden placed on state resources.

"Jobs" is the answer for the state, he repeated.

Mid-year budget cuts will depend upon the trends seen by revenue reports, he explained.

State Rep. Donald Humason said, "I don't think the recession is over until unemployment rates go down and people go back to work.

"The people who are out of work are never going to say the economy is better," he continued.

Humason knows first hand how difficult the employment situation is as his wife was out of work for six months. "This is the first year of my life where unemployment impacted my life," he said.

He added that when he was on the floor of the House debating measures concerning the economy, "it was kind of personal."

The mid-year budget cuts depend upon state revenues from the Christmas season, Humason asserted. "If people are employed, if shoppers bought and if the companies that hired people kept them," he said.

State Sen. Gale Candaras, coming from working on the state budget, is not convinced the recession has ended. "We're feeling the impact greatly," she said.

Based on reports from her constituents, she said events are poorly attended and that businesses "are struggling to get customers."

"We're at the bottom and it's painful," she added.

"I don't see the Commonwealth coming out of this for another year," she said.

As far as mid-year budget cuts, Candaras said they are "highly probable."

"We don't have much choice," she said.