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Local Government To Shed Half Million Jobs

Unfortunately, just as families are increasingly turning to local governments for support,
local governments are facing their own fiscal crisis. The effects of the Great
Recession on local budgets will be felt most deeply from 2010 to 2012.1 In response,
local governments are cutting services and personnel. This report from the National
League of Cities (NLC), National Association of Counties (NACo), and the U.S.
Conference of Mayors (USCM) reveals that local government job losses in the current
and next fiscal years will approach 500,000, with public safety, public works,
public health, social services and parks and recreation hardest hit by the cutbacks.
Local governments are being forced to make significant cuts that will eliminate jobs,
curtail essential services, and increase the number of people in nee

This is what is going to result from the unwillingness of the Obama administration and congress to provide financial assistance to state and local governments. There are numerous indications that the phony recovery is already tipping over into its second dip. The economic impact of these job loses will be a significant addition to that decline. But as the report points out, they are associated with major reductions in government services that form an essential part of what was supposed to be a social safety net in difficult times.

As long as the employment and the real estate markets remain depressed there is little prospect that the sources of tax revenue for local governments will begin to show any recovery. It all becomes a vicious downward cycle.

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Richard Lyon

Richard Lyon