Government Workforce Slashed at Local Levels
States and cities are trimming payrolls to improve government finances.
Oct. 31, 2010— -- States, cities and schools are trimming their payrolls in a cost-cutting effort that has dramatically improved the financial condition of state and local governments.
In the past year, state and local employment has been reduced, mostly through not filling vacancies, by 258,000, or 1.3 percent, to 19.2 million workers, reports the Bureau of Labor Statistics. The cuts are the most since the recession of 1980-81. The federal workforce, meanwhile, grew 3.4 percent to 2.2 million in the past year.
Three-fourths of the state and local job cuts have occurred in five states: New Jersey, New York, California, Ohio and Michigan. Nationwide, 35 states reduced government payrolls in the past year while 15 states increased employment.
"The outlook is for more cuts," says Donald Boyd, finance expert at the Rockefeller Institute of Government in Albany, N.Y.
A smaller workforce -- along with federal stimulus money and an increase in tax collections -- has helped state and local governments run budget surpluses since last October, according to the Bureau of Economic Analysis.
Compensation accounts for half of the $2 trillion spent annually by governments.
New Jersey Gov. Chris Christie, a Republican, is the leader in shrinking government payrolls. He has cut state jobs and slashed school aid, forcing a big drop in public school employment.
"Most states try to be No. 1 in the quality of education, not in the number of educators they fire," says Steve Baker of the New Jersey Education Association, the teachers' union.
E.J. McMahon, a budget expert at the conservative Manhattan Institute, says New Jersey and other states should cut more.
"Gov. Christie didn't invent the fact that the state is out of money," he says.
Behind the job cuts:
Locals take lead. Cities, counties and schools have cut three times as fast as states.
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