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Prolonged Shutdown Could Damage CT Economy

By Keith M. Phaneuf and Mark Pazniokas

www.ctmirror.org

As the federal government stood at the brink of a shutdown today, state and business leaders were most wary of a prolonged stoppage.

Though many of the 9,000 federal employees residing in Connecticut could be furloughed shortly after the new fiscal year begins Tuesday, a potential lag in billions in federal dollars earmarked for the Nutmeg State poses the biggest threat to state government.

And should a shutdown linger for several weeks, or more than a month, both furloughs and a bottleneck in federal aid could undo much of Connecticut’s already sluggish recovery from the last recession.

“The spectre of uncertainty would be key” if a shutdown of a month or more were to develop, said Don Klepper-Smith, a senior economist with DataCore Partners in New Haven. “It would mean less hiring, less job creation, less economic growth. Then this recovery is very much in jeopardy.”

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