Rhode Island economy in dire situation

PROVIDENCE, R.I. (WPRI) - More layoffs, higher unemployment, and a decline in house prices are all in the cards for Rhode Island's economy in the coming year, according to economists.

The grim news came from the New England Economic Partnership's fall conference at the Federal Reserve Bank of Boston Thursday.

The picture is bad for all of New England, with unemployment expected to rise to its highest level since 1992, hitting more than 8 percent by mid-2010. That's a loss of 250,000 jobs by the end of the decade.

But the news is even worse for Rhode Island, which economists said could peak at 10.3 percent - shattering the all-time high of 9.7 percent reached in Nov. 1982.

Edinaldo Tebaldi, an economist from Bryant University, and Edward Mazze, Professor of Business Administration at the University of Rhode Island, presented Rhode Island's economic outlook at the conference.

Tebaldi said the state could see inklings for recovery in the second quarter of 2009, but the state must take steps to develop a long-term recovery strategy.

"Looking at the data, it is very hard to see an easy, quick solution to Rhode Islands economic woes," said Tebaldi.

He said the state's options are limited considering its declining tax revenue and a state budget deficit predicted to reach between $370 million and $450 million in FY 2009.

The report offered a to do list for the state and said leadership is needed to develop a plan focused on long-term goals such as improving human capital, technological innovation and the business environment.

According to its website, the New England Economic Partnership (NEEP) is a member-supported, non-profit organization dedicated to providing objective economic analyses and forecasts.