Local government revenue has withered so drastically that U.S. cities and counties will have to cut hundreds of thousands of jobs in the coming months, leaving communities without basic services and raising jobless rates, according to a survey.
The survey, released Tuesday by three government associations, aims to press Congress on pending legislation that would give them $75 billion over two years to save jobs.
Local and state government employment accounts for more jobs in the United States than construction and manufacturing combined. The survey by the National League of Cities, National Association of Counties and U.S. Conference of Mayors also found that they are the primary employer in many communities.
Those surveyed, 214 cities with populations of more than 25,000 and 56 counties of more than 100,000 people, reported they will cut 8.6 percent of their full-time positions from 2009 through 2011.
"If applied to total local government employment nationwide, an 8.6 percent cut in the work force would mean that 481,000 local government workers were, or will be, laid off over the two-year period," the report said.
Currently, the U.S. unemployment rate stands at 9.6 percent. In June, local governments had a net loss of 8,000 jobs, according to the U.S. Labor Department, and they have shed 18,000 jobs over the past three months.
Last week Federal Reserve Chairman Ben Bernanke said state and local government budget woes are reducing the speed of the economic recovery and warned that governments will likely cut "several hundred thousand jobs."
The local government groups said job losses could climb even higher as many states struggling with their own budget gaps cut aid to cities and counties.
"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."
Fewer police, firefighters, EMT
So far, more than half of cities and more than a third of counties have cut staffing for police, safety and firefighting services due to the deep recession that began in 2007. Those numbers are surprisingly high, given that "cities and counties almost always seek to protect public safety services."
Philadelphia Mayor Michael Nutter said at a press conference about the survey and the local jobs bill that he had recently cut two classes of police training, keeping 200 officers from joining the city's force. Philadelphia is suspending work at some fire stations to prevent laying off firefighters. Those choices have been hard to make, he said.
"We need our city to be safe," he added.
A majority of cities and counties are cutting public works staff such as trash collectors, and postponing infrastructure projects such as highway repairs.
The effect of the cuts will trickle into the private sector because they will limit the number of contracts companies can bid on, according to the survey.
Efforts to send states and schools aid beyond the relief included in the $862 billion federal economic stimulus plan have mostly stalled in the U.S. Congress. Both chambers leave soon for month-long summer breaks and fiscal conservatives are reluctant to approve measures that could add to the country's debt. Any extra aid likely will not reach cities and counties before the stimulus money dries up at year-end.
The local jobs bill would give direct grants to cities with populations of more than 50,000 and allow smaller cities to apply through states. Cities could use 50 percent of the funding they receive to retain employees that might have lost their jobs because of budget shortfalls. It would also provide $23 billion for education workers.
At the press conference Representative Jan Schakowsky, a member of President Barack Obama's bipartisan deficit commission, said damage to local economies would be "devastating to the entire economy."
Representative Keith Ellison from Minnesota would not comment on prospects the local jobs bill would pass the Senate, which has yet to take it up, but told Reuters the bill will likely pass the House before December. He said its supporters are looking at attaching it to another piece of legislation, a method that can expedite passage.