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Prosperity through Infrastructure and Education Spending, New Study Says

August 18, 2010

NEW HAVEN, Conn. - You can't outsource bridge work in Connecticut to China. A new study concludes state investments in infrastructure and education are more effective in promoting jobs and prosperity than providing tax incentives for businesses.

The report, from the Political Economy Research Institute at the University of Massachusetts, confirms the findings of many earlier studies, says Joachim Hero, a research analyst for Connecticut Voices for Children.

"It puts a number to the employment benefits of investing in public infrastructure such as roads and bridges, clean water, railroad, as well as in education."

For example, the study concludes that each $1 million spent by the state on education - including early childhood, K-12 and higher education - creates between 25 and 33 jobs for teachers, and many other types of workers. The study also notes that an educated workforce attracts business.

Data from the Office of Fiscal Analysis shows Connecticut spent an estimated $556 million on corporate income tax deductions and credits in 2009. According to Hero, many of these credits are ineffective or inefficient uses of state funds.

"Numerous studies have found that most of the jobs that are said to be created by business tax credits would have been created in absence of the credits."

Infrastructure spending is especially cost-effective because it often brings in federal dollars as well, adds Hero, and the study indicates there's plenty of need for it in Connecticut. Research included in the document says one-third of the state's bridges are structurally deficient or obsolete, and almost half the roads are in poor or mediocre condition.

The Connecticut Business and Industry Association, which supports business tax incentives, did not return calls seeking comment.

Melinda Tuhus, Public News Service - CT