LocaL GoveRnments cuttinG JoBs and seRvices
additional investment. Local governments are also signifcant sources o employ-ment. Local and state governments comprise one o the nation’s largest employ-ment industries, larger than the manuacturing and construction industries com-bined. Local governments account or seven in every 10 o these employees.
Local governments across the country are now acing the combined impact o decreased tax revenues, a allo in state and ederal aid and increased demandor social services. Over the next two years, local tax bases will likely suer romdepressed property values, hard-hit household incomes and declining consumerspending.
Further, reported state budget shortalls or 2010 to 2012 exceeding$400 billion will pose a signifcant threat to unding or local government pro-grams.
In this current climate o fscal distress, local governments are orced toeliminate both jobs and services.
CuTS IN LOCAL JOS
In May and June o 2010 NLC, NACo and USCM conducted a survey o cit-ies and counties across the country or the purpose o gauging the extent o joblosses. The survey was emailed and axed to all cities over 25,000 in populationand to all counties over 100,000 in population. The survey results presentedbelow are based on 270 responses, 214 responses rom cities and 56 responsesrom counties.The surveyed local governments report cutting 8.6 percent o total ull-timeequivalent (FTE) positions over the previous fscal year to the next fscal year(roughly 2009-2011). I applied to total local government employment nation- wide, an 8.6 percent cut in the workorce would mean that 481,000 local gov-ernment workers were, or will be, laid o over the two-year period.
Projectedcuts or the next fscal year will likely increase as many o the nation’s localgovernments drat new budgets, delib-erate about how to balance shortallsand adopt new budgets.
Local job losses are most heavily elt in public saety, public works, public health,social services, and parks and recreation (see Table 1). Local governments typi-cally seek to shield direct services to residents rom cuts during economic down-turns and the cuts occurring in these services are indicative o the depth o therecession’s impact on cities and counties.Cities and counties almost always seek to protect public saety services — police,fre, and emergency — rom cuts in personnel and unding. The need or thesebasic, or “core,” services in terms o protecting the public against crime, fre, anddisaster oten increase during periods o economic downturn. The depth o thecurrent downturn, however, means that surprising numbers o cities (63%) andcounties (39%) report cuts in public saety personnel. For some communitiesthis means fre and police stations that are closed and the potential or reducedcapacity to respond to emergencies. A majority o the surveyed cities (60%) and counties (68%) report making per-sonnel cuts in public works. Public works services are highly visible to local resi-dents — such as highway and road construction and maintenance and solid waste(garbage and recycling) disposal. Cuts in public works are common responses toeconomic downturns, but the range o local governments making these cuts in
Survey results project that 481,000 jobs willbe lost in local government services.
3 U.S. Bureau o Labor Statistics, www.bls.gov.4 Local fscal conditions typically lag economic conditions, in much the same waythat state fscal conditions lag economic conditions and the unemployment ratelags overall economic recovery. For local budgets, this lag can be anywhere romone to three years, depending on the actors driving the changes in the economyand the depth o those changes. Current economic indicators suggest that the U.S.economy passed the low point o the current recession in late 2009, which meansthat the low point or local fscal conditions will likely be experienced sometimein 2011. To illustrate this lag, the U.S. Census o Governments reports that localproperty tax collections began to decline in the frst quarter o 2010, two-and-a-halyears ater the housing market began to decline in the summer o 2007. For moreinormation about the lag, see
City Fiscal Conditions in 2009
(NLC, Sept. 2009)at http://www.nlc.org/ASSETS/E1BD3CEFA8094BD097A04BD10CBB785B/ CityFiscalConditions_09%20(2).pd.5 McNichol, Elizabeth, Phil Oli and Nicholas Johnson,
Recession Continues to Batter State Budgets; State Responses Could Slow Recovery,
Center onBudget and Policy Priorities, July 2010, http://www.cbpp.org/cms/index.cm?a=view&id=711.6 Total city and county employment statistics are drawn rom the U.S. Censuso Governments.7 Not all cities and counties utilize the same fscal year timerames. The most common local government fscal year runs rom July 1 to June 30, which is usedby 46 percent o the surveyed cities and 56 percent o the surveyed counties.Some local governments utilize a January 1 to December 31 fscal year (28percent cities; 21 percent counties), some use a October 1 to September30 fscal year (22 percent cities; 18 percent counties) and others use somealternate timerame (4 percent cities; 1 percent counties).
“U.S. cities will be orced to make gut-wrenching decisions to cut their spending inthe next year. This is a story not just…o NewJersey. You’re seeing it in Sacramento. You’reseeing it happen in Albany and you’re seeing it happen all over the U.S.”Cory Booker, Mayor, Newark, N.J.
July 09, 2010