State/Local Employment Up Slightly Since Startof Recession, But

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recession (December 2007) Monthly Employment By Sector Compared with Start of 2007 Recession 1 Year Before Peak, Through Latest Month Private State Local (2) (1) 0 1 2 3 4 5 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 below) start of recession (December 2007) Monthly Employment By Sector Compared with Start of 2007 Recession 1 Year Before Peak, Through Latest Month Private State Local (5) (4) (3) (2) (1) 0 1 2 3 4 5 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Percent above (below) start of recession (December 2007) Monthly Employment By Sector Compared with Start of 2007 Recession 1 Year Before Peak, Through Latest Month Private State Local (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Percent above (below) start of recession (December 2007) Monthly Employment By Sector Compared with Start of 2007 Recession 1 Year Before Peak, Through Latest Month Private State Local Source: U.S. Bureau of Labor Statistics, Current Employment Statistics Figure1.StateandLocalGovernmentEmploymentHasRisenSlightly FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage2www.rockinst.org EmploymentbySector, ComparedWithTwo PreviousRecessions Monthly State Government Employment in Recent Recessions 1 Year Before Peak , Thou g h 3 Years After Start 3 4 5 onth 0) Monthly State Government Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 1 2 3 4 5 rt of recession (Month 0) Monthly State Government Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 (2) (1) 0 1 2 3 4 5 12 10 8 6 4 2024681012141618202224262830323436 o ve (below) start of recession (Month 0) Monthly State Government Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 (4) (3) (2) (1) 0 1 2 3 4 5 12 10 8 6 4 2024681012141618202224262830323436 Percent above (below) start of recession (Month 0) Monthly State Government Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 12 10 8 6 4 2024681012141618202224262830323436 Percent above (below) start of recession (Month 0) Monthly State Government Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 Source: U.S. Bureau of Labor Statistics, Current Employment Statistics Figure2.StateGovernmentEmployment Monthly Local Government Employment in Recent Recessions 1 Year Before Peak , Thou g h 3 Years After Start 3 4 5 onth 0) Monthly Local Government Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 1 2 3 4 5 rt of recession (Month 0) Monthly Local Government Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 (2) (1) 0 1 2 3 4 5 12 10 8 6 4 2024681012141618202224262830323436 o ve (below) start of recession (Month 0) Monthly Local Government Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 (4) (3) (2) (1) 0 1 2 3 4 5 12 10 8 6 4 2024681012141618202224262830323436 Percent above (below) start of recession (Month 0) Monthly Local Government Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 12 10 8 6 4 2024681012141618202224262830323436 Percent above (below) start of recession (Month 0) Monthly Local Government Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 Source: U.S. Bureau of Labor Statistics, Current Employment Statistics Figure3.LocalGovernmentEmployment Monthly Private Sector Employment in Recent Recessions 1 Year Before Peak , Thou g h 3 Years After Start 3 4 5 onth 0) Monthly Private Sector Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 1 2 3 4 5 rt of recession (Month 0) Monthly Private Sector Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 (2) (1) 0 1 2 3 4 5 12 10 8 6 4 2024681012141618202224262830323436 o ve (below) start of recession (Month 0) Monthly Private Sector Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 (4) (3) (2) (1) 0 1 2 3 4 5 12 10 8 6 4 2024681012141618202224262830323436 Percent above (below) start of recession (Month 0) Monthly Private Sector Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 12 10 8 6 4 2024681012141618202224262830323436 Percent above (below) start of recession (Month 0) Monthly Private Sector Employment in Recent Recessions 1 Year Before Peak, Though 3 Years After Start 1990 2001 2007 Source: U.S. Bureau of Labor Statistics, Current Employment Statistics Figure4.PrivateSectorEmployment FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage3www.rockinst.org stabilityinpropertytaxrevenuelikelyisonecauseofstabilityin localgovernmentemploymentandoverallstate-localgovernment employment. Approximately59percentoflocalgovernmentemployeesare engagedineducation.(SeeTable2.)Publiceducation 4particu- larlyelementaryandsecondaryeducation 4traditionallyhas substantialsupportfromvoters,taxpayers,andpoliticallyinfluen- tialemployeeunions,andhasbeenanareaofdramaticlong-term spendinggrowth.Whilestateshavecutaidtolocalschooldis- trictsduringbudgetcrises,thecutsusuallyareless-pronounced thaninotherareasofthebudget,presumablyasaresultofthis politicalsupport. Twoothermajorareasofstateandlocalgovernmentemploy- mentincludepublicprotectionandhealthandhospitals.There appearstobeconsiderabletaxpayerandvotersupportforthefor- mer 4oneofthemostfundamentalpurposesofgovernment 4 andconsiderabledemographicpressureforthelatter.Again,in somestates,unionsrepresentingemployeesintheseareasenjoy considerablepoliticalinfluence.ArecentreportbythePewChari- tableTrustsexaminingbudgetactionsinlargecitiesconcluded, cForthemostpart,proposedservicecutsaretargetinglibraries, recreationfacilitiesandaspectsoftrashcollection.Inanumberof places,firedepartmentsareshrinking.Policedepartments,typi- callythelargestcitydepartments,remainrelativelyunaffected,at leastfornow d(PhiladelphiaResearchInitiative2009). Severalemploymentsubsectorsthathaveprovenhardorun- palatabletocutinthestateandlocalgovernmentsectorhave FunctionStateLocalStateLocal Total4,307,35912,146,947100.0%100.0% Education (including libraries)1,740,7897,218,38240.4%59.4% Elementary & secondary52,1436,762,2531.2%55.7% Higher education, other education, libraries1,688,646456,12939.2%3.8% Public protection577,0821,423,48213.4%11.7% Police106,620826,5942.5%6.8% Fire0336,6930.0%2.8% Corrections470,462260,19510.9%2.1% Health & hospitals600,404823,74313.9%6.8% Public welfare & social insurance administration314,718283,4937.3%2.3% Transportation & transit278,106557,3336.5%4.6% Parks, natural resources, water, sewer184,605677,5084.3%5.6% Judicial & legal172,913250,4074.0%2.1% Housing & community development0113,4660.0%0.9% Electric & gas utilities4,04086,5550.1%0.7% Administration & other434,702712,11610.1%5.9% # of FTEsPercent of Total Source: U.S. Bureau of the Census (www.census.gov/govs/www/apesstl07.html) State and Local Full-Time-Equivalent Employment, 2007 Table2.LocalGovernmentEmploymentAccountsforThree-QuartersofState-LocalEmployment FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage4www.rockinst.org counterpartsintheprivatesector,andtheyhaveprovenresilient thereaswell.Table3showsprivatesectoremploymentchangein severalhealth,education,andsocialservicesindustries,allof whichhavegrownsincethestartoftherecessionevenasprivate sectoremploymentasawholehasfallenbynearly6percent. Theseprivateindustriestendtobeheavilydependentupongov- ernmentfortheirfinancing,sowhethertheirgrowthreflectsthe factthattheyaredifficulttocut,whetherintheprivateorpublic sector,orreflectsagovernmentalreluctancetocutspendingisnot easytoanswer.Butineachcase,thedemandfortherelatedser- vices 4education,healthcare,andsocialservices 4isstableor risinginrecessions. Whengovernmentsdocutemployment,theyfindthatitcan beonlyonepartofalargerbudgetsolution,particularlyinthe caseofstategovernments.Wagesareabout13percentofstate governmentspendingandwhilethisissubstantial,manybudget gapshavebeenlargerstill.Forexample,California 9s2009-10bud- getgapwassolargethatevenifithadlaidoffeverysinglestate governmentemployee,itwouldsimplyhavecomeclosetoelimi- natingitsbudgetgap.Forthenationasawhole,wagesareabout 38percentoflocalgovernmentspendingandcutstherecanhave abiggerimpactonbudgetgaps. NewHiresandJobOpeningsAreDown, andInvoluntarySeparationsAreUp Stateandlocalgovernmentshavebeenreducinghiringand layingoffworkers.Newhiringinthemostrecentquarteris20 percentbelowitsleveloftwoyearsearlier,whilelayoffsanddis- chargesareup33percent,accordingtotheU.S.BureauofLabor Statistics 9JobOpeningsandLaborTurnoverSurvey ( http://www.bls.gov/jlt/ ). 1 Thesechangesaremorepronounced thaninthetwoyearsfollowingthestartofthe2001recession, whenhiringbystateandlocalgovernmentsfell16percentand layoffsanddischargesrose21percent. Industry Employment (in thousands) % change Ambulatory Health Care Services (NAICS 65621000)5,8395.0% Educational Services (NAICS 65610000)3,0893.7% Hospitals (NAICS 65622000)4,7263.5% Social Assistance (NAICS 65624000)2,5543.0% Nursing and Residential Care Facilities (NAICS 65623000)3,0612.5% Selected Private Sector Industries With Significant Employment Growth Since Start of Recession Source: U.S. BLS Current Employment Statistics. Table3.PrivateSectorIndustriesThatHavePublicSectorCounterpartsAlsoHaveBeenGrowing 1Thecomparisonsinthissectionarewiththetwo-year-earlierquarter ofApril-June2007,ratherthantheOctober-December2007quarter whentherecessionbegan,becauselayoffsforthestate-localsector arenotpublishedbytheBureauofLaborStatisticsonaseasonally adjustedbasis,necessitatingasame-quartercomparison. FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage5www.rockinst.org Stateandlocalgovernmentlayoffsinthisrecessionappearto havebeenlessabruptthanintheprivatesector,whichexperi- encedasharpspikeinlayoffsinlate2008andearly2009thathas sincesubsided.Thisspikeandfalloffdoesnotappeartohave beenmirroredinthestate-localsector.Becauselayoffscanbeepi- sodicevents,occurringinlargenumbersduringshortspansof timesfollowedbylongperiodswithnolayoffs,itisimportantto avoidover-interpretingspikesanddeclinesinthesedata. Whentimesarehard,workershavefeweropportunitiesto movetootherjobs,andtendtobelesswillingtotaketheriskofa newjobortoexitthelaborforceforleisureorentrepreneurial ventures.Asaresult,thenumberofvoluntary cquits dtendsto fall,makingithardforprivatesectororgovernmentemployersto achieveemploymentreductiongoalsthroughattrition.Inthisre- cession,stateandlocalgovernment cquits daredown34percent fromtheirleveloftwoyearsago.Table4showschangesinhiring, separations,andjobopeningsforthestate-localsectorandthe privatesector. StableGovernmentEmploymentOverallMasks SignificantCuts,GainsinSomeStates Althoughstateandlocalgovernmentemploymentforthena- tionasawholehasbeenquitestable,cutsinsomestateshave beenquitedeepwhileotherstateshaveexpandedpublic 2Weuseyear-over-yearcomparisonsbecausemuchofthedataavail- ableonindividualstatesisnotseasonallyadjustedbytheBureauof LaborStatisticssothatwecannoteasilycomparetotheDecember 2007startoftherecessionortotheAugust2008nationalpeakof stateandlocalgovernmentemployment.Althoughforsomepur- posestheInstitutehasprepareditsownestimatesofseasonallyad- justedstate-leveldatathosearenotnecessaryforthispurpose.We usedataforafullquarterratherthanforindividualmonthsbecause monthlydatatendtobe cbouncy, dparticularlyinsmallstateswith relativelysmallersamplesofestablishments,andquarterlydata yieldmorerobustconclusions.TheApril-Junequarterisfairlyclose intimetothenationalpeakinstate-localgovernmentemployment andprovidesagoodcomparisonperiod. FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage6www.rockinst.org Private SectorState-Local Gov. Hires-23.9%-20.2% Separations:-15.9%-9.9% Layoffs and discharges*22.0%32.7% Quits-38.8%-33.9% All other separations (e.g., retirements and transfers) -1.8%-11.6% Job openings-48.0%-31.9% Labor-Force Turnover Measures Source: Bureau of Labor Statistics, Job Openings and Labor Turnover Survey (JOLTS) (http://www.bls.gov/jlt/) *Note: Layoffs in the private sector spiked during the early months of 2009 to nearly 40 percent above their pre-recession level and have since subsided. There was not a similar spike and fall in the state-local sector. Percent Change, April-June 2007 to April-June 2009 Table4.NewHiresHaveFallenandLayoffsHaveRisen employment.Toexamineemploymentinindividualstates,we compareemploymentforthemostrecentquarter(April-June)to thesameperiodlastyear. 2 StateandLocalGovernmentCombined Stateandlocalgovernmentemploymentfellin16statesbe- tweentheApril-Junequarterof2009andthesamequarterayear earlier.ThelargestdeclineswereinRhodeIsland(3.5%),Nevada (2.9%),Maine(2.2%)Arizona(2.1%),andSouthCarolina(2.1%). AsTable5shows,thereisverylittlerelationshipbetweenthe depthofprivatesectoremploymentdeclinesandstateandlocal governmentdeclines(orincreases). Thestateswiththelargestdeclinestendtohavesuffereddis- proportionatelyfromthehousingbust(Nevada,Arizona,and SouthCarolina)orfromlingeringmalaise(RhodeIsland).Michi- gan,whichhasonlyaslightdeclineoverthelastyear,hadmuch largerdeclineswhenviewedoveralongerperiod.Forexample, stategovernmentemploymentinMichigandeclinedduring2007 andpartof2008,andlocalgovernmenthasdeclinednearlycon- tinuouslyformorethanthreeyears. StatePrivate State & Local StatePrivate State & Local Michigan (8.6)(0.2) Minnesota (4.3) 0.7 Arizona (8.3)(2.1) Connecticut (4.3)(1.4) Oregon (6.9) 0.8 New Jersey (4.2) 0.1 Nevada (6.9)(2.9) New Mexico (4.0) 0.7 Idaho (6.8) 3.6 Kansas (3.9) 0.0 North Carolina (6.2) 2.1 Massachusetts (3.8)(0.5) Georgia (6.0)(0.5) Maine (3.8)(2.2) Indiana (5.9)(0.6) West Virginia (3.7) 0.0 Florida (5.8)(0.9) Pennsylvania (3.6) 0.7 California (5.8)(0.8) Virginia (3.6) 0.0 Alabama (5.7)(0.8) Missouri (3.4) 0.9 Ohio (5.7)(1.5) Arkansas (3.3) 2.0 Tennessee (5.7) 1.1 Iowa (3.3) 0.2 Delaware (5.7) 0.5 Maryland (3.3) 0.4 Wisconsin (5.5) 1.8 Oklahoma (3.1) 2.7 Colorado (5.3) 2.3 Wyoming (3.1) 2.4 Illinois (5.3) 0.1 Texas (3.0) 2.1 South Carolina (5.3)(2.1) New Hampshire (3.0) 2.3 Vermont (5.1) 0.0 Montana (2.9) 3.6 Kentucky (5.0)(1.8) Nebraska (2.8) 2.6 Rhode Island (4.7)(3.5) New York (2.7)(0.3) Utah (4.7) 3.7 South Dakota (2.1) 1.1 Hawaii (4.6) 2.8 Louisiana (1.1) 1.2 Mississippi (4.6) 1.9 Alaska (0.7) 1.5 Washington (4.6) 0.9 North Dakota 0.23.5 Percent Change in Employment Source: U.S. Bureau of Labor Statistics. Not seasonally adjusted. April-June 2009 Quarter Versus Year Ago Table5.LittleRelationshipBetweenGovernmentEmploymentandPrivateSectorChanges FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage7www.rockinst.org In30states,combinedstate-localemploymentrosefrom April-June2008tothesameperiodayearlater;13ofthosestates sawstate-localincreasesof2percentormore.Eightstatessaw bothprivate-sectoremploymentdeclinesof5percentormore, andgainsincombinedstate-localgovernmentemployment.The stateswiththelargestdisparitiesbetweendecliningprivatesector employmentandstate-localgovernmentemploymentchange wereIdaho,Michigan,Utah,NorthCarolina,andOregon. Onemightexpectstatesthatcutstategovernmentemploy- menttobemorelikelytocutlocalgovernmentemploymentas well,butthereisreallynoevidenceofthat,asFigure6shows.A handfulofstateshavecutbothoverthepastyear,withRhodeIs- landhavingcutbothsignificantly. StateGovernmentEmployment Stategovernmentemploymentwasdownin26statesandrose in24statesintheApril-June2009quarterversusayearago,asTa- ble6shows.Cutsinafewstateshavebeenquitedeep 4particu- larlyArizona,RhodeIsland,NewJersey,Kentucky,andIndiana. AsFigure7shows,thereductionshavebeenconcentratedineast- ernstatesandhousing-buststates(albeitnotexclusivelyso). NorthDakota,whichhasbeentheonlystateoflatewithincreas- ingprivatesectoremployment,andhasnothadasignificantbud- getgap,hadthelargestincreasebyfar.TheincreaseinMichigan, withitschronicandseverebudgetproblems,mayseemsurpris- ingbutcomesafteralongstringofdeclinesinstategovernment employmentandlargely(butnotentirely)reflectsincreasesin stateuniversitiesandcollegesratherthaninstateagencies. 3 Texas Percent Change in State & Local Government Employment April-June 2009 Quarter Versus Year Ago MI VT OH WI NV PA MN IN ME IA OR NY NH ND SD NE ID MT WA WY RI MA NJ CT Percent Change in State & Local Government Employment April-June 2009 Quarter Versus Year Ago Percent Change < (1.0) (1.0) to (0.5) (0.5) to 0.0 > 0.0 MI VT FL OH WV AZ CA WI NV HI PA TN MN AR IN MO ME IA MS IL VA AK GA NM OR NY KY AL NH KS ND OK SC SD NE NC ID CO MT WA TX LA UT WY RI MA MD NJ CT DE Source: U.S. Bureau of Labor Statistics. Figure5.DeclinesMoreCommoninEasternStatesandHousing-BustStates FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage8www.rockinst.org andNebraskaalsohadrelativelylargegrowthinstategovern- mentemployment. LocalGovernmentEmployment Localgovernmentemploymentsofarhasbeenmoreresilient thanstategovernmentemployment,withgainsin34statesand declinesin16statesintheApril-June2009quarterversusayear ago,asTable7shows.Inthosestatesthathavereducedlocalgov- ernmentemployment,thereductionstendtobesmallerthanhave beencutsinstategovernmentemployment.Theonlystateswith cutsofmorethantwopercentwereNevada,RhodeIsland,Maine, andSouthCarolina.Judgingbytheassociatedmap(Figure8), severalofthestateswithdeeplocalgovernmentemploymentre- ductionsalsosuffereddisproportionatelyfromthehousingbust orfromlonger-termfiscalstress(examplesareCalifornia,Con- necticut,Florida,Michigan,Nevada,andRhodeIsland).There were,however,significantexceptionstothis,suchasArizona, whereemploymenthasbarelydeclineddespitesteephousing pricedeclines,andSouthCarolinawhereemploymenthasde- clinedbuthousingpriceshavehelduprelativelywell.(SeeTable 8foralistofstatesrankedbyhousingvalue-declines.) Montana,Idaho,Utah,NorthCarolina,andNewHampshire showedthelargestgainsinlocal-governmentemployment. % change in employment, Apr-Jun 2009 vs. year earlier MT % change in employment, Apr-Jun 2009 vs. year earlier ID MT UT Positive state & Positive local growth Negative state & Positive local growth 6 % change in employment, Apr-Jun 2009 vs. year earlier e rnmen t CO DE ID MT NC NE NH OK TN UT WI WY Positive state & Positive local growth Negative state & Positive local growth 2 4 6 % change in employment, Apr-Jun 2009 vs. year earlier Local government AK AR AZ CO DE GA HI IA ID IL IN KS LA MD MN MO MS MT NC ND NE NH NJ NM NY OK OR PA SD TN TX UT VA VT WA WI WY Positive state & Positive local growth Negative state & Positive local growth 0 2 4 6 % change in employment, Apr-Jun 2009 vs. year earlier Local government AK AL AR AZ CA CO CT DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NY OH OK OR PA RI SC SD TN TX UT VA VT WA WI WV WY Positive state & Positive local growth Negative state & Positive local growth Negative state & Negative local growth Positive state & Negative local growth -2 0 2 4 6 % change in employment, Apr-Jun 2009 vs. year earlier State g overnment Local government AK AL AR AZ CA CO CT DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR PA RI SC SD TN TX UT VA VT WA WI WV WY Positive state & Positive local growth Negative state & Positive local growth Negative state & Negative local growth Positive state & Negative local growth -2 0 2 4 6 -505 % change in employment, Apr-Jun 2009 vs. year earlier State g overnment Local government AK AL AR AZ CA CO CT DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR PA RI SC SD TN TX UT VA VT WA WI WV WY Positive state & Positive local growth Negative state & Positive local growth Negative state & Negative local growth Positive state & Negative local growth -2 0 2 4 6 -505 Figure6.LittleRelationshipBetweenCutsinState,LocalGovernment 3BasedinpartondiscussionwithMichigan 9sLaborMarketInforma- tionoffice,August14,2009. FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage9www.rockinst.org Arizona (8.6) Minnesota (0.3) Rhode Island (5.7) Iowa 0.2 New Jersey (4.6) Missouri 0.3 Kentucky (4.1) West Virginia 0.4 Indiana (3.6) Virginia 0.5 Vermont (2.6) California 0.7 Montana (2.6) Wisconsin 0.8 South Carolina (2.2) South Dakota 0.9 North Carolina (2.0) Maryland 0.9 Nevada (2.0) Louisiana 1.0 New York (2.0) Washington 1.0 New Hampshire (1.9) Pennsylvania 1.4 Illinois (1.8) Oregon 1.9 Ohio (1.7) Alaska 2.0 Maine (1.6) Oklahoma 2.1 Georgia (1.5) Mississippi 2.6 Alabama (1.4) Utah 2.9 Tennessee (1.3) Hawaii 3.2 Delaware (1.3) Colorado 3.3 Idaho (1.1) Wyoming 3.3 Connecticut (0.8) Arkansas 3.7 Massachusetts (0.6) Michigan 3.8 New Mexico (0.6) Nebraska 4.2 Kansas (0.4) Texas 5.0 Florida (0.3) North Dakota 8.6 Percent Change in State Government Employment April-June 2009 Quarter Versus Year Ago Source: U.S. Bureau of Labor Statistics. Not seasonally adjusted. Table6.StateGovernmentEmploymentIsDownin26States MI VT OH WI NV PA MN IN ME IA OR NY NH ND SD NE ID MT WA WY RI MA NJ CT Percent Change in State Government Employment April-June 2009 Quarter Versus Year Ago MI VT FL OH WV AZ CA WI NV HI PA TN MN AR IN MO ME IA MS IL VA AK GA NM OR NY KY AL NH KS ND OK SC SD NE NC ID CO MT WA TX LA UT WY RI MA MD NJ CT DE Percent Change in State Government Employment April-June 2009 Quarter Versus Year Ago Source: U.S. Bureau of Labor Statistics. Percent Change < (1.0) (1.0) to (0.5) (0.5) to 0.0 > 0.0 Figure7.StateGovernmentEmploymentDeclinesHaveBeenMorePrevalentinEasternStates FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage10www.rockinst.org WhatServicesandFunctions HaveStatesBeenCutting? Forthenationasawhole,stategovernment noneducationemploymenthasbeenhitharder thanstategovernmenteducationemployment (suchasuniversityandcollegeemployees). Sincethestategovernmentemploymentpeakin August2008,noneducationemploymenthasde- clinedby1.4percentwhilestategovernmented- ucationemploymenthasincreasedby0.3 percent.Table9showschangesineducation andnoneducationstategovernmentemploy- mentforthosestatesforwhichthebreakdown isavailable. Ohiohascutstategovernment noneducationemploymentthedeepest,witha declineof9.7percentfortheApril-Junequarter comparedwithayearearlier,followedbyKen- tuckyat8.7percentandGeorgiaat6.5percent. Severalstateshaveruncountertothegeneral pattern,cuttingstategovernmenteducationem- ploymentverysignificantly.Forexample,this employmentisdown11percentinArizona,7 percentinNewJersey,and5.9percentinDela- ware(seeTable9). Anadditionaldatasourcethatcanlendin- sightintotheareasinwhichgovernmentsarecuttingemploy- mentistheQuarterlyCensusofEmploymentandWagesfromthe BureauofLaborStatistics.Thesedataareavailablewithmuch greaterindustrialdetail,butmustbeusedwithcautionbecause notallstatesreportthesamelevelofdetailandnotallquarters havethesamelevelofdetail.Thelatestavailabledataareforthe October-December2008quarter.Thefourstateswiththelargest declinesinstateandlocalgovernmentemploymentatthatpoint wereKentucky,Maine,Michigan,andRhodeIsland.Table11 showsabreakdownofthestateandlocalgovernmentemploy- mentchangeforthesefourstatesversusthesameperiodayear ago.Weusestateandlocalgovernmentcombinedtoavoidthe riskofdrawingconclusionsthatareaffectedbyshiftsbetweenthe stateandlocalsector. Whilethepatternsacrossstatesarenotuniform,itisclearthat cutsinarts,entertainment,andrecreationhavebeensignificantin allfourstates,consistentwiththeconclusionsofthePewCharitable Trustsforthelargecitiesthattheyexamined,mentionedearlier. Cutsinexecutive,legislative,andgeneralgovernment,aswellas administrationofprograms,wererelativelycommonaswell. Thefollowingstateshademploymentgrowthinbotheduca- tionandnoneducationjobs,atboththestateandlocallevel: Alaska,Colorado,Mississippi,NorthDakota,SouthDakota, Texas,UtahandWashington. Nevada (3.3) North Dakota 0.9 Rhode Island (2.5) Arkansas 0.9 Maine (2.4) Minnesota 1.0 South Carolina (2.0) Missouri 1.1 Connecticut (1.7) South Dakota 1.2 Michigan (1.7) Texas 1.2 Ohio (1.4) Hawaii 1.3 California (1.2) Alaska 1.3 Florida (1.1) Louisiana 1.3 Kentucky (0.6) New Mexico 1.4 Alabama (0.5) Vermont 1.5 Massachusetts (0.4) Mississippi 1.6 West Virginia (0.2) New Jersey 1.7 Virginia (0.2) Tennessee 1.9 Georgia (0.1) Colorado 2.0 Arizona (0.1) Nebraska 2.0 New York 0.1 Wyoming 2.1 Maryland 0.2 Wisconsin 2.2 Kansas 0.2 Delaware 2.7 Iowa 0.2 Oklahoma 2.9 Oregon 0.4 New Hampshire 3.9 Pennsylvania 0.5 North Carolina 3.9 Illinois 0.5 Utah 4.1 Indiana 0.6 Idaho 5.5 Washington 0.8 Montana 6.8 Percent Change in Local Government Employment April-June 2009 Quarter Versus Year Ago Source: U.S. Bureau of Labor Statistics. Not seasonally adjusted. Table7.LocalGovernmentEmploymentIsUpin34States FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage11www.rockinst.org Percent Change in Local Government Employment April-June 2009 Quarter Versus Year Ago MI VT OH WI NV PA MN IN ME IA IL OR NY NH ND SD NE ID MT WA UT WY RI MA NJ CT Percent Change < (1.0) (1.0) to (0.5) (0.5) to 0.0 > 0.0 Percent Change in Local Government Employment April-June 2009 Quarter Versus Year Ago MI VT FL OH WV AZ CA WI NV HI PA TN MN AR IN MO ME IA MS IL VA AK GA NM OR NY KY AL NH KS ND OK SC SD NE NC ID CO MT WA TX LA UT WY RI MA MD NJ CT DE Source: U.S. Bureau of Labor Statistics. Figure8.LocalGovernmentEmploymentChanges Nevada (28.4) Utah 0.7 California (25.9) Pennsylvania 0.7 Florida (22.1) Missouri 0.8 Arizona (18.8) Georgia 1.0 Rhode Island (10.8) Alaska 1.3 Maryland (9.4) Nebraska 1.7 Michigan (7.5) Indiana 2.0 New Jersey (7.1) Colorado 2.2 Dist. of Columbia (6.3) Arkansas 2.3 Hawaii (6.1) West Virginia 2.3 Massachusetts (6.1) Mississippi 2.5 New Hampshire (5.5) Kansas 3.4 Connecticut (5.0) Iowa 3.4 Virginia (4.8) Kentucky 3.4 Minnesota (4.4) South Carolina 3.8 Oregon (3.8) Tennessee 3.8 New York (3.2) Louisiana 4.2 Illinois (2.7) North Carolina 4.4 Delaware (2.6) Montana 4.6 Washington (2.5) Alabama 5.3 Maine (0.9) Oklahoma 6.3 Idaho (0.6) Wyoming 6.4 Ohio (0.3) South Dakota 6.8 Wisconsin 0.1 North Dakota 6.8 New Mexico 0.3 Texas 6.9 Vermont 0.6 Percent Change in Housing Values January-March 2007 Quarter to January-March 2009 Quarter Source: Federal Housing Finance Agency (all-transactions index). United States (3.7) Table8.HousingPriceDeclines FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage12www.rockinst.org WhatElseAreGovernments DoingtoReducePayrollCosts? Atleast20stateshaverequiredstategovernmentemployees togoonfurloughforoneormoredays 4dayswithoutpay,on whichtheemployeesareexpectednottowork. Forexample,Californiaisclosingmoststategovernmentof- ficesforthreedayspermonthduringthe2009-10fiscalyear,fora totalof36furloughdays.Therearesomeexceptionsforprisons, hospitals,parks,andotherfacilitiesthatcannoteasilyclose,butin thesecasesemployeesandmanagementaregenerallyexpectedto worktogethertodevelopfurloughschedulesforindividualem- ployeesthatallowthefacilitiestoremainopen.Foraffectedem- ployees,thefurloughwillresultinapproximatelya14percent reductioninpay.Althoughthefurloughsinvolvewagesavingsto thestateandwagelossestoemployees,retirementbenefitsare notaffected 4employeesearnretireebenefitsbasedontheirpu- tativeannualsalary,eventhoughtheywillnotbepaidfullsalary. StateEducation Non- education TotalEducation Non- education TotalEducation Non- education Arizona (5.3)(2.6)(7.9) -11.0%-6.0%-8.6%14 New Jersey (3.5)(3.6)(7.1) -7.0%-3.4%-4.6%29 Kentucky (0.3)(3.8)(4.1) -0.5%-8.7%-4.1%122 Indiana (2.2)(2.0)(4.1) -2.8%-5.1%-3.6%75 Montana (0.6)(0.1)(0.7) -4.7%-0.7%-2.6%416 Vermont (0.1)(0.3)(0.5) -1.6%-3.4%-2.6%810 South Carolina (0.6)(1.6)(2.2) -1.3%-2.9%-2.2%911 North Carolina 0.4 (4.4)(4.0) 0.4%-4.9%-2.0%136 New York (2.0)(3.1)(5.1) -3.6%-1.5%-2.0%515 Illinois 0.5 (3.2)(2.7) 0.6%-4.5%-1.8%157 Ohio 4.6 (7.4)(2.8) 5.2%-9.7%-1.7%331 Georgia 3.2 (5.6)(2.4) 4.3%-6.5%-1.5%293 Alabama (0.7)(0.9)(1.6) -1.2%-1.6%-1.4%1014 Tennessee (1.5) 0.3 (1.3) -3.3%0.5%-1.3%621 Delaware (0.7) 0.3 (0.4) -5.9%1.6%-1.3%327 Idaho 0.3 (0.7)(0.3) 2.4%-4.1%-1.1%238 Massachusetts 0.9 (1.6)(0.7) 2.0%-2.1%-0.6%2013 New Mexico 0.6 (0.9)(0.3) 2.1%-2.8%-0.6%2212 Minnesota (0.6) 0.3 (0.3) -0.9%0.7%-0.3%1122 California 3.8 (0.1) 3.7 1.7%0.0%0.7%1920 Maryland 1.4 (0.4) 1.0 3.1%-0.6%0.9%2517 South Dakota 0.10.10.2 1.2%0.8%0.9%1723 Washington 0.61.01.6 0.7%1.4%1.0%1626 Pennsylvania 2.3 (0.1) 2.2 4.3%-0.1%1.4%3019 Oregon 0.90.61.5 3.2%1.2%1.9%2625 Alaska 0.10.40.5 1.4%2.2%2.0%1829 Mississippi 0.11.51.6 0.5%3.8%2.6%1432 Utah 1.00.81.8 3.0%2.8%2.9%2431 Hawaii 2.10.22.4 4.3%1.0%3.2%2824 Colorado 2.30.52.8 4.2%1.7%3.3%2728 Wyoming 0.6 (0.0) 0.5 8.6%-0.3%3.4%3418 Michigan 4.41.96.3 4.6%2.7%3.8%3130 Texas 9.09.118.0 4.7%5.2%5.0%3233 North Dakota 0.31.72.0 2.1%17.0%8.5%2134 Source: Bureau of Labor Statistics, Current Employment Statistics, Not seasonally adjusted. Note: Sorted by percent change in total state government employment. Change in State Government Workforce, April-June 2009 vs. Year Earlier States for which education/non-education breakdown is available Change in number of workers (thousands) Percent change Rank of % change, states with data (1=deepest cut) Table9.StateGovernmentEducationandNoneducationEmployment FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage13www.rockinst.org StateEducation Non- education TotalEducation Non- education TotalEducation Non- education South Carolina (1.5)(2.9)(4.5) -1.4%-2.7%-2.0%34 Connecticut (0.1)(2.7)(2.8) -0.1%-4.0%-1.7%91 Michigan (6.1)(1.2)(7.4) -2.5%-0.7%-1.7%18 Ohio 0.5 (8.6)(8.1) 0.2%-3.2%-1.4%112 California (9.6)(11.4)(21.0) -1.0%-1.4%-1.2%56 Kentucky (1.2) 0.1 (1.1) -1.0%0.1%-0.6%413 Alabama (1.6) 0.4 (1.2) -1.5%0.3%-0.5%216 Massachusetts (0.5)(0.7)(1.1) -0.3%-0.6%-0.4%710 Georgia 0.7 (1.3)(0.6) 0.3%-0.8%-0.1%127 Arizona 3.8 (4.0)(0.2) 2.6%-2.9%-0.1%313 Maryland (0.2) 0.60.4 -0.1%0.6%0.2%1019 Iowa (0.2) 0.50.3 -0.2%0.7%0.2%820 Oregon 1.4 (0.6) 0.8 1.3%-0.7%0.4%219 Pennsylvania 2.10.12.3 0.7%0.1%0.5%1412 Illinois 7.1 (3.9) 3.2 2.0%-1.5%0.5%245 Indiana 1.70.01.7 1.1%0.0%0.6%1511 Washington 2.40.32.6 1.5%0.2%0.8%2214 North Dakota 0.20.20.4 1.2%0.7%0.9%1721 Minnesota 1.71.33.0 1.2%0.9%1.0%1922 South Dakota 0.30.30.6 1.2%1.2%1.2%1823 Texas 9.45.915.2 1.2%1.4%1.2%1624 Alaska 0.50.10.5 2.0%0.3%1.3%2515 New Mexico 0.21.31.5 0.3%2.7%1.4%1330 Mississippi 1.11.52.6 1.3%2.0%1.6%2026 New Jersey 6.51.07.5 2.3%0.6%1.7%2918 Tennessee (0.6) 6.05.3 -0.5%4.3%1.9%632 Colorado 2.82.04.8 2.2%1.7%1.9%2825 Nebraska 1.90.32.2 3.2%0.6%2.0%3317 Wyoming 0.50.51.0 2.2%2.0%2.1%2727 Wisconsin 3.23.26.4 2.0%2.4%2.2%2329 Delaware 0.50.20.7 3.0%2.1%2.7%3228 North Carolina 5.911.717.6 2.6%5.4%3.9%3033 Utah 3.11.64.7 4.7%3.2%4.1%3531 Idaho 0.93.34.2 2.1%9.5%5.5%2634 Montana 1.12.23.4 4.0%10.6%6.8%3435 Source: Bureau of Labor Statistics, Current Employment Statistics, Not seasonally adjusted. Note: Sorted by percent change in total local government employment. Change in Local Government Workforce, April-June 2009 vs. Year Earlier States for which education/non-education breakdown is available Change in number of workers (thousands) Percent change Rank of % change, states with data (1=deepest cut) Table10.LocalGovernmentEducationandNoneducationEmployment Kentucky Maine Michigan Rhode Island Kentucky Maine Michigan Rhode Island All state and local government employment (NAICS 10) (2,623)(614)(6,434)(1,104) -1.0%-0.7%-1.1%-2.1% Elementary and secondary schools (NAICS 611110) (223)(395)(8,015)(287) -0.2%-0.9%-3.5%-1.2% All other education (rest of NAICS 61) 316 (190) 2,029 (218) 0.8%-2.0%2.1%-4.5% Hospitals (NAICS 622) (263) 31 (189) n/a -1.9%3.5%-1.4%n/a Nursing and residential care facilities (NAICS 623) n/a29179n/a n/a2.9%2.7%n/a Social assistance (NAICS 624) 26n/a409 (31) 0.6%n/a5.3%-15.1% Arts, entertainment, and recreation (NAICS 71) (98)(114)(167)(14) -3.7%-8.1%-4.9%-1.7% Executive, legislative and general government (NAICS 921) (580)(39)(1,086) 143 -1.5%-0.4%-0.9%3.2% Courts (NAICS 92211) 59 (27) 7122 1.3%-5.2%0.9%20.9% Police protection (NAICS 92212) 475054 (50) 1.4%1.4%2.0%-1.5% Legal counsel and prosecution (NAICS 92213) (141) n/an/an/a -5.0%n/an/an/a Correctional institutions (NAICS 92214) (87)(31) 38n/a -1.9%-2.3%0.3%n/a Administration of HR, environ., & ec. programs (NAICS 923, 924, 926) (1,790)(23) 412 (436) -10.2%-0.3%1.5%-10.5% All other state and local government employment 11195 (105)(333) 0.5%0.7%-0.2%-3.2% State and Local Government Employment From 2007q4 to 2008q4 in Four States That Had Significant Declines From December 2007 to December 2008 Year-over-year change in number of state & local government employees Year-over-year percent change Source: Author's analysis of data from Quarterly Census of Employment and Wages, U.S. Bureau of Labor Statistics. Table11.StateandLocalCuts FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage14www.rockinst.org Accordingto Stateline.org ,otherstateswithannouncedfur - loughsincludeArizona,Colorado,Connecticut,Georgia,Hawaii, Idaho,Iowa,Maryland,Massachusetts,Maine,Michigan,Nevada, NewJersey,NorthCarolina,Ohio,Oklahoma,Oregon,South Carolina,Utah,andWisconsin.(SeeVu,Pauline, cFurloughscut intostateservices, d Stateline.org ,June30,2009.)California 9sfur - loughprogramappearstobethemostextensiveprograminthe nation.Hawaii 9sprogramalsowouldbethreedaysamonthbut asofthiswritingithasbeenchallengedsuccessfullyinaunion lawsuit. Furloughprogramswillresultinlowerwagecostsbystates, butshouldnotaffecttheemploymentdatadiscussedinthisre - port. Conclusions Asisthetypicalpatterninrecessions,forthenationasa whole,stateandlocalgovernmentshavenotreducedemploy- mentsincethestartoftherecessionalthoughtherehasbeena smalldeclinesincetheAugust2008peak. Recenttrendsingovernmentemployment,relativetoprivate sectorcuts,reflectmanydifferencesbetweengovernmentsand businesses.Fiscalproblemsforstatesareareflection,inpart,of declinesintaxrevenueresultingfromearliercutsinprivatesector employmentandspendingandsotherecanbelagsbetween whenproblemshittheprivatesectorandwhentheyhitthepublic sector(althoughoftentheselagsarenotlong).Government decisionmakingabouthowtorespondtobudgetproblemstakes considerabletimeandinvolvesmanyactors 4forecastersandan- alystsmustrecognizetheextentofafiscalproblem,governors mustproposebudgetactions,andlegislatorsandothersoffer counterproposalsandultimatelynegotiateresolutions.Therecan bestrongresistancefrompoliticallyinfluentialunionsaswell,and multipleproposalssuchaslayoffs,buyouts,furloughs,andearly retirements.MuchofthisoccursintheJanuary-Juneperiodas budgetsarenegotiated 4aperiodjustended.Implementationof cutstakesadditionaltimeandcaninvolvecomplicatedsenior- ity-basedrulesthatinfluencewhowillbelaidoff.Thesefactors helptoexplainsomeofthelagsinresponse. Perhapsmoresignificant,thedemandformanyoftheservices governmentprovidesisquitestableorevenrisesinarecession andthereareeffortstopreservetheseservicesandtheemploy- menttheyrelyon.Employmentinprivatesectorcounterpartsto somegovernmentservices,suchasprivatesectoremploymentin educationandhealthcare,alsotendstobeextremelystable. Anotherfactorcontributingtogovernmentemploymentsta- bilityinthisrecessionisthefederalstimuluspackage,onegoalof whichwastohelppreserveservicesprovidedbystateandlocal government.ThroughlateJulymorethan$36billionhasbeendis- bursedbythefederalgovernmenttostatesforfiscalrelief.Whilea completeunderstandingoftheemployment-relatedimpactof FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage15www.rockinst.org suchassistancerequiresfurtherresearch,boththeexpectationof thisfundingandactualreceiptofithasundoubtedlyhelpedstate andlocalgovernmentsstaveoffemploymentcuts. Stateandlocalgovernmentemploymentinrecessions Itiscommonforstateandlocalgovernmentemploymenttoriseinrecessions,orifitfalls,tode- clineonlyafterasubstantiallag. 4 Thefiguresonthenexttwopagesshowprivatesector,stategov- ernment,andlocalgovernmentemploymentineachofthelastsixrecessions(includingthecurrent one),treatingthe1980 cdouble-dip drecessionasasinglelongrecession.(Amildrecessionbeganin January1980followedbyabriefrecovery,andthenamuchdeeperrecessionbeganinJuly1981.) Thebroadpatternhasbeenforstateandlocalgovernmentemploymenttoincreaseevenaspri- vatesectoremploymentfalls,butwithtwosignificantexceptions.First,localgovernmentemploy- mentfellsignificantlybeginningaboutayearandahalfafterthestartofthe1980double-dip recession.Thismayreflecttheprolongedanddeepnatureofthetworecessionsinthatperiodtaken together,orperhapsmorelikely,itmayreflectthenationalpropertytaxrevoltsparkedbyProposi- tion13,thepropertytaxlimitationmeasureadoptedbyCaliforniain1978thatwasfollowedbysig- nificantdeclinesinpropertytaxrevenue. Thesecondmajorexceptionisthataboutayearandahalfafterthe2001recessionbegan,state governmentemploymentbegantofallnearlycontinuouslyforalmosttwoyears.Itishardtoknow whatmadethatrecessiondifferent,butclearpublicandpoliticalsentimentinoppositiontotaxin- creasesledstatestorelylessontaxestoclosebudgetgapsthaninpriorrecessions,andmoreon spendingmeasures. Despitetheseexceptions,thecommonpatternisclearandsuggeststhatthereareenduringrea- sonsforstabilityinstateandlocalgovernmentemploymentthatgobeyondebbsandflowsinpoliti- calsentiment. 4If,insteadofexaminingthelevelofgovernmentemployment,weexamineeitheritsrelationshiptototalpop- ulationoritsgrowthrate,stateandlocalgovernmentemploymentcanusuallybeseentodeclineorslow duringrecessions. FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage16www.rockinst.org References Lutz,ByronF., TheConnectionBetweenHousePriceAppreciationandPropertyTaxRevenues ,FederalReserveBoard, FinanceandEconomicsDiscussionSeries(FEDS),2008-48. PhiladelphiaResearchInitiative, ToughDecisionsandLimitedOptions:HowPhiladelphiaandOtherCitiesareBalanc- ingBudgetsinaTimeofRecession ,ThePewCharitableTrusts,May18,2009. Vu,Pauline, cFurloughscutintostateservices, d Stateline.org ,June30,2009. 14 Monthly Employment By Sector Compared with Start of 1969 Recession 1 Year Before Peak, Through 3 Years After 9 10 11 12 13 14 m ber 1969) Monthly Employment By Sector Compared with Start of 1969 Recession 1 Year Before Peak, Through 3 Years After Private State Local 5 6 7 8 9 10 11 12 13 14 recession (December 1969) Monthly Employment By Sector Compared with Start of 1969 Recession 1 Year Before Peak, Through 3 Years After Private State Local 1 2 3 4 5 6 7 8 9 10 11 12 13 14 below) start of recession (December 1969) Monthly Employment By Sector Compared with Start of 1969 Recession 1 Year Before Peak, Through 3 Years After Private State Local ( 4 ) (3) (2) (1) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Dec 68 Mar 69 Jun 69 Sep 69 Dec 69 Mar 70 Jun 70 Sep 70 Dec 70 Mar 71 Jun 71 Sep 71 Dec 71 Mar 72 Jun 72 Sep 72 Dec 72 Percent above (below) start of recession (December 1969) Monthly Employment By Sector Compared with Start of 1969 Recession 1 Year Before Peak, Through 3 Years After Private State Local (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Dec 68 Mar 69 Jun 69 Sep 69 Dec 69 Mar 70 Jun 70 Sep 70 Dec 70 Mar 71 Jun 71 Sep 71 Dec 71 Mar 72 Jun 72 Sep 72 Dec 72 Percent above (below) start of recession (December 1969) Monthly Employment By Sector Compared with Start of 1969 Recession 1 Year Before Peak, Through 3 Years After Private State Local Source: U.S. Bureau of Labor Statistics, Current Employment Statistics 14 Monthly Employment By Sector Compared with Start of 1973 Recession 1 Year Before Peak, Through 3 Years After 9 10 11 12 13 14 m ber 1973) Monthly Employment By Sector Compared with Start of 1973 Recession 1 Year Before Peak, Through 3 Years After Private State Local 5 6 7 8 9 10 11 12 13 14 recession (November 1973) Monthly Employment By Sector Compared with Start of 1973 Recession 1 Year Before Peak, Through 3 Years After Private State Local 1 2 3 4 5 6 7 8 9 10 11 12 13 14 b elow) start of recession (November 1973) Monthly Employment By Sector Compared with Start of 1973 Recession 1 Year Before Peak, Through 3 Years After Private State Local ( 4 ) (3) (2) (1) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Nov 72 Feb 73 May 73 Aug 73 Nov 73 Feb 74 May 74 Aug 74 Nov 74 Feb 75 May 75 Aug 75 Nov 75 Feb 76 May 76 Aug 76 Nov 76 Percent above (below) start of recession (November 1973) Monthly Employment By Sector Compared with Start of 1973 Recession 1 Year Before Peak, Through 3 Years After Private State Local (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Nov 72 Feb 73 May 73 Aug 73 Nov 73 Feb 74 May 74 Aug 74 Nov 74 Feb 75 May 75 Aug 75 Nov 75 Feb 76 May 76 Aug 76 Nov 76 Percent above (below) start of recession (November 1973) Monthly Employment By Sector Compared with Start of 1973 Recession 1 Year Before Peak, Through 3 Years After Private State Local Source: U.S. Bureau of Labor Statistics, Current Employment Statistics 5 Monthly Employment By Sector Compared with Start of 1980 "Double-Dip" Recession 1 Year Before Peak, Through 3 Years After 3 4 5 u ary 1980) Monthly Employment By Sector Compared with Start of 1980 "Double-Dip" Recession 1 Year Before Peak, Through 3 Years After Private State Local 0 1 2 3 4 5 of recession (January 1980) Monthly Employment By Sector Compared with Start of 1980 "Double-Dip" Recession 1 Year Before Peak, Through 3 Years After Private State Local (2) (1) 0 1 2 3 4 5 Jan 79 Apr 79 Jul 79 Oct 79 Jan 80 Apr 80 Jul 80 Oct 80 Jan 81 Apr 81 Jul 81 Oct 81 Jan 82 Apr 82 Jul 82 Oct 82 Jan 83 e (below) start of recession (January 1980) Monthly Employment By Sector Compared with Start of 1980 "Double-Dip" Recession 1 Year Before Peak, Through 3 Years After Private State Local (5) (4) (3) (2) (1) 0 1 2 3 4 5 Jan 79 Apr 79 Jul 79 Oct 79 Jan 80 Apr 80 Jul 80 Oct 80 Jan 81 Apr 81 Jul 81 Oct 81 Jan 82 Apr 82 Jul 82 Oct 82 Jan 83 Percent above (below) start of recession (January 1980) Monthly Employment By Sector Compared with Start of 1980 "Double-Dip" Recession 1 Year Before Peak, Through 3 Years After Private State Local (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 Jan 79 Apr 79 Jul 79 Oct 79 Jan 80 Apr 80 Jul 80 Oct 80 Jan 81 Apr 81 Jul 81 Oct 81 Jan 82 Apr 82 Jul 82 Oct 82 Jan 83 Percent above (below) start of recession (January 1980) Monthly Employment By Sector Compared with Start of 1980 "Double-Dip" Recession 1 Year Before Peak, Through 3 Years After Private State Local Source: U.S. Bureau of Labor Statistics, Current Employment Statistics FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage17www.rockinst.org 5 Monthly Employment By Sector Compared with Start of 1990 Recession 1 Year Before Peak, Through 3 Years After 3 4 5 ( July 1990) Monthly Employment By Sector Compared with Start of 1990 Recession 1 Year Before Peak, Through 3 Years After Private State Local 0 1 2 3 4 5 s tart of recession (July 1990) Monthly Employment By Sector Compared with Start of 1990 Recession 1 Year Before Peak, Through 3 Years After Private State Local (2) (1) 0 1 2 3 4 5 Jul 89 Oct 89 Jan 90 Apr 90 Jul 90 Oct 90 Jan 91 Apr 91 Jul 91 Oct 91 Jan 92 Apr 92 Jul 92 Oct 92 Jan 93 Apr 93 Jul 93 a bove (below) start of recession (July 1990) Monthly Employment By Sector Compared with Start of 1990 Recession 1 Year Before Peak, Through 3 Years After Private State Local (5) (4) (3) (2) (1) 0 1 2 3 4 5 Jul 89 Oct 89 Jan 90 Apr 90 Jul 90 Oct 90 Jan 91 Apr 91 Jul 91 Oct 91 Jan 92 Apr 92 Jul 92 Oct 92 Jan 93 Apr 93 Jul 93 Percent above (below) start of recession (July 1990) Monthly Employment By Sector Compared with Start of 1990 Recession 1 Year Before Peak, Through 3 Years After Private State Local (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 Jul 89 Oct 89 Jan 90 Apr 90 Jul 90 Oct 90 Jan 91 Apr 91 Jul 91 Oct 91 Jan 92 Apr 92 Jul 92 Oct 92 Jan 93 Apr 93 Jul 93 Percent above (below) start of recession (July 1990) Monthly Employment By Sector Compared with Start of 1990 Recession 1 Year Before Peak, Through 3 Years After Private State Local Source: U.S. Bureau of Labor Statistics, Current Employment Statistics 5 Monthly Employment By Sector Compared with Start of 2001 Recession 1 Year Before Peak, Through 3 Years After 3 4 5 a rch 2001) Monthly Employment By Sector Compared with Start of 2001 Recession 1 Year Before Peak, Through 3 Years After Private State Local 0 1 2 3 4 5 r t of recession (March 2001) Monthly Employment By Sector Compared with Start of 2001 Recession 1 Year Before Peak, Through 3 Years After Private State Local (2) (1) 0 1 2 3 4 5 Mar 00 Jun 00 Sep 00 Dec 00 Mar 01 Jun 01 Sep 01 Dec 01 Mar 02 Jun 02 Sep 02 Dec 02 Mar 03 Jun 03 Sep 03 Dec 03 Mar 04 o ve (below) start of recession (March 2001) Monthly Employment By Sector Compared with Start of 2001 Recession 1 Year Before Peak, Through 3 Years After Private State Local (5) (4) (3) (2) (1) 0 1 2 3 4 5 Mar 00 Jun 00 Sep 00 Dec 00 Mar 01 Jun 01 Sep 01 Dec 01 Mar 02 Jun 02 Sep 02 Dec 02 Mar 03 Jun 03 Sep 03 Dec 03 Mar 04 Percent above (below) start of recession (March 2001) Monthly Employment By Sector Compared with Start of 2001 Recession 1 Year Before Peak, Through 3 Years After Private State Local (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 Mar 00 Jun 00 Sep 00 Dec 00 Mar 01 Jun 01 Sep 01 Dec 01 Mar 02 Jun 02 Sep 02 Dec 02 Mar 03 Jun 03 Sep 03 Dec 03 Mar 04 Percent above (below) start of recession (March 2001) Monthly Employment By Sector Compared with Start of 2001 Recession 1 Year Before Peak, Through 3 Years After Private State Local Source: U.S. Bureau of Labor Statistics, Current Employment Statistics 5 Monthly Employment By Sector Compared with Start of 2007 Recession 1 Year Before Peak, Through Latest Month 3 4 5 m ber 2007) Monthly Employment By Sector Compared with Start of 2007 Recession 1 Year Before Peak, Through Latest Month Private State Local 0 1 2 3 4 5 recession (December 2007) Monthly Employment By Sector Compared with Start of 2007 Recession 1 Year Before Peak, Through Latest Month Private State Local (2) (1) 0 1 2 3 4 5 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 below) start of recession (December 2007) Monthly Employment By Sector Compared with Start of 2007 Recession 1 Year Before Peak, Through Latest Month Private State Local (5) (4) (3) (2) (1) 0 1 2 3 4 5 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Percent above (below) start of recession (December 2007) Monthly Employment By Sector Compared with Start of 2007 Recession 1 Year Before Peak, Through Latest Month Private State Local (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Percent above (below) start of recession (December 2007) Monthly Employment By Sector Compared with Start of 2007 Recession 1 Year Before Peak, Through Latest Month Private State Local Source: U.S. Bureau of Labor Statistics, Current Employment Statistics FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage18www.rockinst.org SourcesofDataonGovernmentEmployment Thisreportreliesonthreemainsourcesofemploymentdata,eachofwhichhasadvantagesfor somepurposesanddisadvantagesforothers.Thesesourcesaredescribedbrieflybelow. MonthlyCurrentEmploymentStatistics(BLS) TheCurrentEmploymentStatistics(CES)programoftheBureauofLaborStatistics(BLS)pro- ducesmonthlydataonemployment,hours,andearningsbyindustryofworkersonnonfarmpay- rolls.Itisbasedonamonthlysurveyofabout150,000businessesandgovernmentagencies regardingpayrollsintheweekthatincludesthe12thdayofthemonth.(CESdatacanbeobtained from http://www.bls.gov/ces/ andassociatedftpsites.) NationaldatafromtheCESareverytimely,withtheinitialestimatesofnationalemploymentfor agivenmonthgenerallyreleasedonthefirstFridayafterthemonthends.(Thus,Julynationalem- ploymentdataareincludedinthisreport.)Theseestimatesarethenrevisedineachofthenexttwo monthsasnewreportsbecomeavailable,andundergoacomprehensive cbenchmark drevisiononce ayearbasedontheCensusofEmploymentandWagesdescribedbelow.ThenationalCESdatapro- videthebestearlyindicatorofwhatishappeningtoemploymentintheprivatesectorandingov- ernment,andwehaveuseditinthisreporttodescribechangesinstateandlocalgovernment employmentinthisrecession,throughJuly,forthenationasawhole. ApproximatelytwotothreeweeksafterBLSreleasesCESdataforthenation,itreleasesCES dataforindividualstatesandmetropolitanareas.Thesedataareavailableatasimilarlevelofindus- trialdetailasthenationaldata,butmanyofthestate-levelestimateshavenotbeenseasonallyad- justedbyBLS.(ForpurposesofthisreportwehaveseasonallyadjustedsomestateCESdata,using theCensusX-12seasonaladjustmentmethodology.)Thesedataprovidethebestearlyreadonwhat ishappeningtoprivatesectorandgovernmentemploymentinindividualstatesandwehaveused themforthatpurposeinthisreport. CESdatahavetheadvantageofbeingextremelytimelyandofhavingconsiderableindustrialde- tailfortheprivatesector.Theirmaindisadvantagesarethat(a)theydonotincludeextensivedetail forgovernmentemployment,and(b)earlyestimatescanbesubjecttoconsiderablerevision,particu- larlyinperiodswhenthereisconsiderableeconomicchange(suchasnow).Inaddition,CESdataare notdesignedtoprovidedetailonemploymentbyfunctionalareaorbyoccupation,whichareofin- terestinouranalysisofgovernmentemployment. Atthetimeofthisreport,CESdataforthenationareavailablethroughJuly2009anddatafor statesareavailablethroughJune2009. QuarterlyCensusofEmploymentandWages(BLS) TheQuarterlyCensusofEmploymentandWages(QCEW)programatBLSisanextremelycom- prehensivedatasourcederivedfromsummariesofemploymentandpayofworkerscoveredby stateandfederalunemploymentinsurancelegislationandprovidedbystateworkforceagencies. QCEWwasformerlyknownastheES-202programandissometimesstillreferredtobythatname. Thedataarehighlydetailedgeographicallyandbyindustry,andprovidefarmoreindustrialdetail aboutgovernmentthandotheCESdata.ThedataalsoaremoreaccuratethantheCESdatabecause theyarebasedonanear-censusofemployersratherthanalargesample.Asnotedabove,CESdata areadjusted(benchmarked)annuallytoreflectQCEWdata.(QCEWdatamaybeobtainedat http://www.bls.gov/cew/ andatassociatedftpsites.) AlthoughQCEWdatacreateanopportunitytocompareacrossstatesthedetailsofchangesin governmentemployment,thesecomparisonscanbefraughtwithdifficulty.Notallstatesreportthe samelevelsofdetailingovernmentemployment,andsometimesthedetailsreportedchangewithin statesacrosstime.Furthermore,governmentssometimesmakestructuralorlegalchangesthatcause employeestoshiftfromlocalgovernmenttostategovernment(ascouldhappenwithastate FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage19www.rockinst.org takeoverofalocalschoolsystem)orviceversa.Thiscancauseanartificialchangeinemployment thatwemayseewhenlookingatstategovernmentorlocalgovernmentinisolationbutthat cwashes out dwhenwelookatstateandlocalgovernmentcombined.(SomeoftheseissuescanariseinCES dataaswell.)ForthesereasonswehavebeencautiousinusingQCEWdata. Atthetimeofthisreport,QCEWdataforstatesandcountiesareavailablethroughDecember 2008. AnnualSurveyofGovernmentEmploymentandPayroll(BureauoftheCensus) EachyeartheCensusBureauconductsasurveyofemploymentandpayrollinthefederalgov- ernmentandinstateandlocalgovernments.Thedataforstateandlocalgovernmentsarebasedon payrollsinthemonthofMarch.Thesedataareavailablewithaboutatwo-yearlag ( http://www.census.gov/govs/apes/index.html andassociatedftpsites). TheCensusBureaudataprovidedetailsonemploymentbyfunctionalareathatarenotavailable intheBLSdataandthustheyareusefulinprovidingasnapshotofthegovernmentworkforceata pointintime.BecausetheCensusandBLSdataseriesusedifferentcollectionmethodsanddefini- tionstheyarenotdirectlycomparable.Thelonglagsinreportingandannual(ratherthanquarterly ormonthly)periodicitymeanthattheCensusannualsurveysarenotusefulforreal-timeanalysisof policychangesduringarecession,althoughtheycanbeusefulforhistoricalanalysisofpriorreces- sions. Atthetimeofthisreport,Censusannualgovernmentemploymentdataareavailablethrough 2007. OtherSourcesofDataonGovernmentEmployment Thesourcesdescribedabovearethemainnationalsourcesofdataonemploymentofstateand localgovernments,andallhavebeenusedinthisreport.However,forsomespecializedpurposes otherdatasourcescanbeuseful.Inparticular,theJobOpeningsandLaborTurnoverSurveyfrom theBureauofLaborStatisticscanbehelpfulinunderstandingturnoverandwasusedbrieflyforthat purposeinthisreport.Also,microdatafromtheCurrentPopulationSurveyandfromtheAmerican CommunitySurveycanbeusedtodescribeandinfercharacteristicsandbehaviorofthegovernment workforcecomparedtotheprivatesector,comparedtogovernmentemploymentinpriorperiods, and,insomecircumstances,acrossdifferentgeographies.Inaddition,occupationaldatafromBLS canbeusefulforsomepurposes.Butnoneofthesedatasourcesisappropriatefordescribingthesize ofthesectorasawholeinindividualstates,whichisourmainpurposehere. Anothermajorsourceofgovernmentemploymentdataisfromindividualstates 9personneland retirementplanrecords.Thesedatatendtobeverytimelyandarecollectedingreatdetail,butare notcomparableacrossstates.Furthermore,itcanbedifficulttoobtaincomprehensivedatasince theremaynotbeaone-stopsourcefordataonallstateagencies,commissions,andauthorities,and thedatacanbedifficulttoobtain.Wedonotuseindividualstatepersonnelrecordsinthisreport. FiscalStudiesState/LocalEmploymentUpSlightlySinceStartofRecession,ButCutsAreNowUnderway RockefellerInstitutePage20www.rockinst.org AboutTheNelsonA.RockefellerInstituteofGovernment 9sFiscalStudiesProgram TheNelsonA.RockefellerInstituteofGovernment,thepublicpolicyresearcharmoftheState UniversityofNewYork,wasestablishedin1982tobringtheresourcesofthe64-campusSUNYsys- temtobearonpublicpolicyissues.TheInstituteisactivenationallyinresearchandspecialprojects ontheroleofstategovernmentsinAmericanfederalismandthemanagementandfinancesofboth stateandlocalgovernmentsinmajorareasofdomesticpublicaffairs. TheInstitute 9sFiscalStudiesProgram,originallycalledtheCenterfortheStudyoftheStates, wasestablishedinMay1990inresponsetothegrowingimportanceofstategovernmentsinthe Americanfederalsystem.Despitetheever-growingroleofthestates,thereisadearthofhigh-qual- ity,practical,independentresearchaboutstateandlocalprogramsandfinances. ThemissionoftheFiscalStudiesProgramistohelpfillthisimportantgap.TheProgramcon- ductsresearchontrendsaffectingall50statesandservesasanationalresourceforpublicofficials, themedia,publicaffairsexperts,researchers,andothers. ThisreportwasresearchedandwrittenbyDonaldBoyd,seniorfellow.LucyDadayan,senior policyanalyst,assistedwiththetablesandfigures.RobertB.Ward,deputydirectoroftheInstitute, directstheFiscalStudiesProgram.MichaelCooper,theRockefellerInstitute 9sDirectorofPublica- tions,didthelayoutanddesignofthisreport,withassistancefromMicheleCharbonneau. AdditionalinformationabouttheInstituteanditsFiscalStudiesProgramisavailableat www.rockinst.org . StateRevenueReportStateTaxDeclineinEarly2009WastheSharpestonRecord RockefellerInstitutePage21www.rockinst.org

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