WTC security and emergency response newspaper article

NYC 9/11 Public Portal Document

Attacks Strike Hard at States ’ Economies By PAM BELLUCK The terrorist attacks last week are The effects of last week’s attacks economy, “we’re seeing cancella­ beginning to deal a blow to state are acute in states that rely on tour­ tions of hotel reservations around the economies, damaging tourism and ism and air travel. southern Utah national park areas, travel-related industries, chipping “I’m concerned uniquely about as well as smaller convention and into sales tax revenues and, with the Florida’s economy as it relates to business meetings,” said Spence prospect of war on the horizon, this because commercial aviation is Kinard, assistant director of the throwing many states into uncertain­ a lifeblood for our state,” Gov. Jeb ty about their economic future. Bush said. States across the country, many In Hawaii, with its multibillion­ already struggling in a slowing na­ tional economy, are considering dip­ dollar tourism industry and depend­ ence on air travel, hotel occupancy is More budget cutting ping further into rainy day funds or making deeper cuts in budgets al­ down sharply, and Gov. Benjamin J. Cayetano plans to meet with law­ and dipping into ready stripped to the bone. “We had a number of states that makers and representatives from the airline, tourism, btinking and re­ rainy-day funds. were already concerned about their tail industries on Wednesday to find budgets and their revenues,” said ways to protect the economy. Don Hunter, manager of information Many states are predicting ripple Utah Travel Council. and membership services for the effects that go well beyond the tour­ Mr. Kinard said the state was also Council of State Governments. ism and travel industries. worried about the effect on the 2002 “What has happened is that this se­ They worry about effects on sales Olympics in Salt Lake City. ries of events has removed even tax revenue if consumer spending “1 think the economy poses as does not recover. They are con­ great a threat to the Olympics right more of their revenue base. This can become a very difficult cycle be­ cerned that a war will cause wide now as does terrorism,” he said. cause states are already facing diffi­ swings in oil prices and changes in States where airlines or airports culties and we are seeing reductions federal aid to states. are big employers will also'suffer in employment. Now we’re going to And states with large military immediate setbacks. see even more.” bases, like North Carolina, are wor­ United Airlines announced today In Louisiana, for instance, state ried that a decision to send thou­ that it would lay off 20,000 workers. officials have canceled a $2.5 million sands of troops overseas could de­ echoing a decision by Continental tourism campaign. press the economies of the base com­ Airlines to furlough 12,000 employees And the state is concerned that munities. and the announcement that Midway- cotton, soybean and sugar-cane Several other states are forming Airlines was shutting down for good. farmers may have lost crops be­ task forces or calling meetings to “If you’re a state that has airport cause crop-dusters were banned consider the effects of the attack. But hubs, like Texas, with American in from flying for a week after the for now uncertainty reigns. Dallas and Continental in Houston, attack. “It is essentially an impossible you’ll be seeing some unexpected In Iowa, Gov. Tom VUsack is question to answer almost because of layoffs you did not count on in macro- the fact that we’ve never been here economic forecast,” Mr. Perez said. putting dozens of travel requests before,” said Arturo Perez, a budget But over the longer term many from state agencies on hold, and he specialist with the National Confer­ states are worried that slumps in plans to announce budget cuts on ence of State Legislatures. sales tax from lower consumer Thursday. “I’he next closest thing to this spending will have a spiraling im­ In Indiana, Gov. Frank L. O’Ban­ would be the Persian Gulf war,” Mr. pact on the economy. non has asked all departments to Perez said. “That was the last time “There is a lot of concern about look at their budgets to find cuts. states faced so much uncertainty consumer confidence and consumer In Idaho, where the attacks have with regard to their economies,” spending that will potentially damp­ already cost the Boise Airport States that depend more heavily en sales tax collections,” said Jean $200,000 in revenue, the state is brac­ on tourism and travel will undoubt­ Ross of the California Budget ing for tens of millions of dollars in edly suffer more in the short term, Project, a nonpartisan organization lost tourism by the end of the year. Mr. Perez and others say. that tracks the state’s finances. In Nebraska, Gov. Mike Johanns Many companies are curtailing David Bronner, chief executive of has called a special legislative ses­ travel for their employees. Such de­ the Retirement Systems of Alabama, sion for late October to grapple with cisions affect a variety of businesses a $26 billion pension fund, said; “I a budget shortfall that is expected to like rental car agencies and restau­ think before the terrible tragedy Ala- get worse in light of last week’s rants. catastrophe. bama’s economy was heading to­ One example, Mr. Hunter said, ward a recession. Since the tragedy “It will change the spending that was his organization’s decision, “be­ the state does, no doubt,” said Chris has taken place I think we are in a cause of security concerns and trav­ recession, and it will hurt Alabama Peterson, a spokesman for Governor el problems,” to cancel its annua! more than most places because of Johanns. “Our own economists in the meeting this week in Anchorage. the dependence on sales taxes.” state government and others are sig­ The loss of the 2,000 people who naling that the terrorist attacks pro­ were expected to attend “is going to vide a great deal of uncertainty in have a tremendous effect up there,” revenue projections for the next few months. The governor has said that this is something we have to face, and that’s why he has been so up he said. In Utah, where skiing and other vacation activities are vital to the NLiTimfiS front about calling the special ses­ sion.”

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