Are Some Government Jobs Gone for Good?

In localities badly hurting for revenue, public employment may never return to pre-recession levels.
by | June 2015

The public workforce in Hamilton County, Ohio, has endured a long series of painful cutbacks in recent years. More than a quarter of county jobs have disappeared since the Great Recession began. Most of the employees who remain went about six years without pay raises. Even now, windows of county offices still aren’t washed, and janitors only stop by a couple of times a week.

Other local governments all across the country have cut payrolls, of course, and many still haven’t fully recovered. Total local government employment nationally remains about a half-million below its 2008 peak. But some governments have suffered a great deal more than others.

Governing reviewed financial documents for more than 250 of the nation’s larger distressed cities and counties to identify those recording among the steepest declines in public employment. The 10 localities shedding the largest share of their workforce lost anywhere from a quarter to slightly more than half of their employees from peak levels. What led these governments to make severe workforce reductions and how they responded to cutbacks offer unique lessons in an era of doing more with less.

Harsh Realities Lead to Cutbacks

For Hamilton County, in which Cincinnati is located, a variety of factors converged. Property tax revenues took a major hit, as did interest earnings on the county’s investments. Like other Ohio localities, Hamilton also incurred sharp declines in state aid, with state intergovernmental funding down roughly $73 million since 2007.

Drastic measures were imposed as a result. In the depths of the recession, the county didn’t wait for the end of the fiscal year, implementing midyear cuts to departments’ budgets. Across-the-board pay raises, bonuses and tuition reimbursement all went away. By last fiscal year, Hamilton’s total revenues were still down about 19 percent from fiscal 2007 after adjusting for inflation.

In a few cities experiencing years of economic decline, workforce cuts were even more severe. Flint, Mich., has dropped a staggering 55 percent of its total workforce since fiscal 2008 -- the largest reduction of any jurisdiction reviewed. Parks and recreation staffing declined from 75 employees to the equivalent of just one full-time employee as most of the work was contracted out. Even the number of sworn police officers has been cut by more than half. Detroit similarly suffered several rounds of budget cuts, with employment down 4,600 positions from 2007.

The following localities reviewed shed more than a quarter of the workforce from recent peak employment levels:

Jurisdiction % Change Since Peak 2014 Employment Peak Employment
Flint, Mich. -54.6% 525 1,156 (2008)
North Las Vegas, Nevada -34.8% 1,474 2,261 (2010)
Detroit, Mich. -33.5% 9,122 13,726 (2007)
Reno, Nevada -33.5% 1,093 1,644 (2007)
Santa Ana, Calif. -31.9% 1,438 2,111 (2008)
Chula Vista, Calif. -31.1% 1,154 1,675 (2006)
Hialeah, Fla. -31.1% 1,143 1,658 (2007)
Dayton, Ohio -30.6% 1,919 2,767 (2007)
San Jose, Calif. -28.3% 6,263 8,738 (2008)
Wayne County, Mich. -27.6% 3,907 5,396 (2006)
Hamilton County, Ohio -26.8% 4,592 6,272 (2006)
Pembroke Pines, Fla. -26.7% 1,374 1,875 (2007)
Rockland County, N.Y. -25.7% 2,201 (2013) 2,962 (2006)
NOTE: See note below for methodology.

SOURCE: Governing calculations of data obtained from localities' financial reports

Along with substantial budget reductions, Flint and Detroit sustained some of the nation's steepest population losses in recent years. But not all of localities laying off workers are losing residents. In fact, hard-hit jurisdictions like Cape Coral, Fla., Chula Vista, Calif., and Sacramento County, Calif., continue to experience steady population gains year after year. In these places, revenue losses can be traced directly back to the bursting of the housing bubble.

Chula Vista had enjoyed years of rapid development before it all came to a standstill. The city, which relies significantly on property taxes, issued layoff notices in 2007, 2008 and 2009 that collectively led to nearly a third of the workforce departing. “As a local government, it opened our eyes up to [the fact] that you cannot rely on just sales and property taxes,” says Deputy City Manager Kelley Bacon.

 

How Governments Applied Job Cuts

Like most other cities faced with cuts, Chula Vista initially left vacant positions unfilled, then looked to eliminate part time or non-permanent jobs. When prioritizing which full-time positions to retain, the city sought to protect core services, particularly public safety. Library staff were among the most affected, requiring the city to be creative in programming and staffing. “We wanted to make it as painless for the public as possible,” Bacon says. For laid-off workers, the city offered counseling, resume-writing and interviewing classes.

The much larger city of San Jose, Calif., dealt with a serious structural deficit, with the effects of the recession worsened by rising pension costs. The city has lost 28 percent of its full- and part-time staff since 2008 and, at one point, imposed 10 percent pay and benefit cuts on most of its workforce.

Compounding matters for San Jose and some other highly impacted jurisdictions were civil service system rules allowing employees whose positions were cut to displace less tenured staff holding similar jobs. The San Jose city auditor’s office issued a report finding that the practice, commonly known as “bumping,” created poor matches in filling positions and disproportionately affected certain departments. In some cases, the elimination of a single position meant workers in multiple departments ended up switching jobs.

Other local governments responded by outsourcing duties performed by public employees, giving managers added flexibility without needing to pay for employee benefits. A small number jurisdictions also entered into shared services agreements to push down costs for providing public safety, street maintenance or other services.

When it came to applying cuts across departments, distressed local governments took different approaches. One gauge of how workforce reductions played out is the Census Bureau’s Annual Survey of Public Employment and Payroll. Comparing 2007 estimates to the most recent 2013 totals indicates that employees in highway and judicial/legal job classifications saw the largest share of the workforce leave, down 9.6 percent and 8.1 percent, respectively. Public safety personnel, by comparison, were generally cut only as a last resort. Local police agencies expanded their ranks of officers, but still eliminated more than 22,000 nonsworn positions.

% Change in full-time equivalent employment

Many local agencies suffered serious employee cutbacks just as demand for services was increasing. Perhaps the most conspicuous example is social services. Despite the added burden placed on these agencies in the recession years, Census figures show that local government employment in the social welfare category declined 6.5 percent.

State funding cuts forced Hamilton County’s Job & Family Services department to shed nearly half its staff over about two years, so the agency sought out any efficiencies it could find. County Administrator Christian Sigman says he challenged department heads to run operations more like a business. “We just had to react to it,” Sigman says. “The double whammy there is that caseloads went up during the recession.” Far more appointments and applications for public assistance are now handled over the phone or the Internet rather than through in-person meetings.

Implications of a Shrinking Public Workforce

Contrary to the popular cliché, it’s not always possible to do more with less. “In some cases, creativity runs out when you don’t have enough resources,” says Elizabeth Kellar, president of the Center for State and Local Government Excellence.

Some jurisdictions with the largest personnel reductions reported low morale and much higher turnover. Increased workloads, along with the extended pay freezes that often accompanied them, made it difficult for governments to attract and retain employees. One constructive strategy in counteracting high turnover, Kellar says, was to increase budgets for staff training and development.

But did the public take notice of the cuts? At least in Hamilton County, Sigman suspects the average citizen didn’t see much of a difference as most residents don’t regularly interact with county social services, courts or other areas of government most affected by cutbacks. The same might not be true of reductions to other, more visible areas of government.

Like officials in other hard-hit jurisdictions, Sigman doesn’t expect his workforce to return to pre-recession levels anytime soon. He says, though, the county has learned to adapt to the new reality. “Quite frankly, I don’t want those days back,” he says. “We’re now a leaner and more engaged organization.”

Data: Local Governments Incurring Largest Job Losses

Of all cities and counties reviewed that once employed at least 1,000 workers, the 25 jurisdictions shown in this graphic experienced the largest percentage declines in public employment from peak levels since 2006. Select a jurisdiction to display its data. 

Data Note

Governing reviewed data for more than 250 cities and counties employing at least 1,000 workers characterized by financial distress, substantial population loses, high unemployment or large declines in public employment reflected in Census surveys. Employment totals were obtained from jurisdictions' annual financial reports or by contacting human resources departments. Localities identified in this report recorded among the largest percentage declines in employment when their most recent annual full-time equivalent totals are compared with peak employment levels since 2006. Several smaller jurisdictions not included, such as Harrisburg, Pa., and Compton, Calif., also suffered similarly high job losses in recent years. Historical employment data was unavailable for some jurisdictions.