Local Governments Warn of Devastating Job Cuts

The National League of Cities, a nonprofit that represents 19,000 towns and cities with a combined population of 220 million, released a report indicating devastating local-government job and service cuts. In the 2010 State of America’s Cities survey, 63 percent of city officials say poverty has worsened in the past year — the highest proportion since 1992. Additionally, 75 percent of officials think overall conditions have gotten worse, 84 percent say unemployment has gotten worse and 90 percent cite joblessness as a problem.

Seven in ten respondents are cutting staff and delaying projects, and more than half say that service levels will decrease in 2011 if tax revenue does not go up. But tax revenue is not going up, the report notes:

Despite a broad range of sentiments about the future of the country, local officials agree that the state of America’s cities continues to worsen, threatening long term national economic recovery. City budget shortfalls will become more severe over the next two years as tax collections catch up with economic conditions. These will inevitably result in new rounds of layoffs, service cuts, and cancelled projects and contracts. With local and state sectors comprising about one-eighth of GDP, and cities making up a significant portion of this sector, the services and employment offered by local governments are critical to the health of local and regional economies that drive national economic performance.

Local governments directly employ more than 14 million people and indirectly many more than that — slight, but across-the-board, budget and staff cutting could mean hundreds of thousands of jobs lost.

Rep. George Miller’s (D-Calif.) Local Jobs for America Act, currently in committee, would provide $75 billion to local governments to keep employees on the payroll and is the measure the National League of Cities is pushing for. But any deficit-spending programs — even to keep people employed — will have a lot of trouble passing a very debt-conscious Congress.

Take, for instance, Sen. Tom Harkin’s (D-Iowa) proposal to grant $23 billion to keep public-school teachers in their classrooms, the Keep Our Educators Working Act, which is supported by Education Secretary Arne Duncan and the White House. Rep. John Boehner (R-Ohio), the House minority leader, responded:

“The American people recognize that Washington’s out-of-control spending is hurting our economy and stifling job creation, and they’re asking their elected leaders to make tough choices on fiscal responsibility. Unfortunately, the administration’s call for another $23 billion to pad the education bureaucracy will only make state governments more dependent on the federal government and more vulnerable when the federal funding explosion disappears. This latest state bailout proposal promotes the same flawed logic as the failed ‘stimulus’ bill that has contributed to a record $1.5 trillion deficit and left one in every 10 Americans from our workforce out of work.”