Local Governments to Slash 500,000 Jobs in Next Two Years

This week the National League of Cities, the National Association of Counties, and the U.S. Conference of Mayors released a survey that indicated that local governments would be forced to slash over 500,000 jobs if Congress does not pass a $75 billion local jobs bill. 

The surveyed local governments (214 cities with populations of more than 25,000 and 56 counties of more than 100,000 people) reported that they are cutting 8.6% of total full-time positions over the previous fiscal year to the next fiscal year (roughly 2009-2011).  If applied to total local government employment nationwide, this cut in workforce would mean that 481,000 local government workers were, or will be, laid off over the two-year period.

The groups indicated that job losses could climb even higher as many states struggling with their own budget gaps cut aid to cities and counties.  The cuts would affect public safety, libraries, schools, social services, trash collection, among other services.

The surveyed cities reported the following cuts to services:

"Local governments across the country are now facing the combined impact of decreased tax revenues, a fall-off in state and federal aid and increased demand for social services," the report said. "Over the next two years, local tax bases will likely suffer from depressed property values, hard-hit household incomes and declining consumer spending."

Last week Federal Reserve Chairman Ben Bernanke said state and local government budget woes have reduced the speed of the economic recovery and warned that governments will likely cut "several hundred thousand jobs."