News Release - State and Local Government Employment Has Increased Slightly Since Recession Began, Rockefeller Institute Report Finds

For Immediate Release –

August 20, 2009

Media contact: Mark Marchand – (518) 443-5283 / marchanm@rockinst.org

State and Local Government Employment Has Increased Slightly Since Recession Began, Rockefeller Institute Report Finds

More Recent Data Show Government Employment Beginning to Decline as Full Impact of Weakened Economy Hits State and Local Budgets

Albany, N.Y. — Combined state and local government employment across the U.S. has increased slightly since the recession began in December 2007, while jobs in the private sector have dropped sharply, according to a new report from the Rockefeller Institute of Government.

During the past year, total state- and local-government employment rose in 30 states and declined in 16, with employment in the remaining states unchanged. Since the recession began, state and local governments have added a total of about 110,000 jobs, an increase of 0.6 per cent.

“As is the typical pattern in recessions, overall state and local government employment continued to grow after the start of the recession, although there has been a small decline since the August 2008 peak,” said Rockefeller Institute Senior Fellow Donald J. Boyd, author of the new report. “Further employment reductions are almost certainly on the way.”

Recent trends in government employment, relative to private sector cuts, reflect many differences between governments and businesses,” Boyd added. “Fiscal problems for states are a reflection, in part, of declines in tax revenue resulting from earlier cuts in private sector employment and spending. Thus there can be lags between when problems hit the private sector and when they hit the public sector, although often these lags are not long.”

Analyzing individual states shows little relationship between employment trends in the public and private sectors, the study found. For example, eight states saw both private-sector employment declines of 5 percent or more, and gains in combined state-local government employment, over the past year.

Boyd also noted that at least 20 states have now imposed furloughs on state employees, which will reduce their pay and hours worked without eliminating jobs.

Through late July, the federal government has disbursed more than $36 billion to the states for fiscal relief as part of a broader economic stimulus package.

“Both the expectation of this funding and actual receipt of it has undoubtedly helped state and local governments stave off employment cuts,” Boyd said.

For a full copy of the report, visit www.rockinst.org.

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About the Rockefeller Institute of Government

The Nelson A. Rockefeller Institute of Government, at the University at Albany, is the public policy research arm of the State University of New York. The Institute conducts fiscal and programmatic research on American state and local governments. Journalists can find useful information on the Newsroom page of the Web site, www.rockinst.org.

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