Crisis In Government Funding Slows Economic Recovery In Silicon Valley

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(AP)

SAN MATEO (KCBS) – Some business leaders in Silicon Valley say the continuing crisis in government funding means choosing between drastic cuts and raising taxes.

Although Silicon Valley’s economic engine may be revving-up according to a new report on venture capital confidence, this is only good news for the private sector.

The Silicon Valley Venture Capitalist Confidence Index registered  3.75 on a 5-point scale, rising fractionally from 3.70. This is good news for the private sector, indicating that hiring and other investments are on the rise.  But the public sector future, Joint Venture CEO Russell Hancock says, looks bleak.

KCBS’ Tim Ryan Reports:

“The cupboard is bare,” he said. “In local government in Silicon Valley, they’ve done everything they can do and there are still huge gaps.”

Hancock says there need to be huge cuts — or higher taxes.

Emmitt Carson, president of the Silicon Valley Community Foundation, says society may have to chose between things such as tracking sex offenders and feeding our senior citizens.

“It is that serious,” he said. “We have decided that there is a finite amount we would like to put toward revenue through taxes, and now we have to divvy that up against some very important needs.”

(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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