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State can expect smaller slice of pie

Report says share based on jobless, poverty factors

Published February 14, 2009 at 2:11 a.m.

Colorado, at least by one measure, would get a smaller share of the money from the federal stimulus plan than almost every other state, a new report finds.

The Center for American Progress examined the amount going to each state relative to the size of its economy and estimated that Colorado would receive an amount equal to 3 percent of its gross state product.

Only one state is set to receive less, relative to its economic output. Delaware's share of the funding would represent 2.6 percent of its gross state product.

The money for each state is not based on population, or economic size. It is "geared toward who's unemployed, who's in poverty" and other factors, said Will Straw, the group's associate director for economic growth.

The fact that Colorado has held up better economically than most states "could be the biggest explanation" for the state's smaller share in the report, Straw said.

Colorado's jobless rate of 6.1 percent in December compared with an unemployment rate of 7.2 percent on the national level. While Colorado has outperformed the nation, some economists believe the state followed the rest of the U.S. into a recession late last year.

California, Arizona and New Mexico would get 3.6 percent, 4.2 percent and 4.5 percent, respectively. Michigan would get 4.8 percent, the report said.

Colorado's recovery package, a sum that includes not only "money that goes to the state government, but also money that goes straight to peoples' wallets," would be roughly $7.2 billion, according to the study.

The funds include tax cuts, increased unemployment insurance and food stamps to help those most in need, money to improve the education system and to boost clean energy programs, and state infrastructure projects, according to the Center for American Progress, a liberal think tank in Washington.

The U.S. Congress on Friday passed a $787 billion economic recovery package that supporters say will create or save 3.5 million jobs.

The White House and Gov. Bill Ritter have said the money will create or save about 60,000 jobs in Colorado over two years, provide tax cuts to workers, make college more affordable, modernize schools and boost the "new-energy" economy.

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