After more than four years of slow and steady growth, the economy has finally returned to peak job levels dating back to the start of the recession. Payroll employment reached a new high in May, and Labor Department estimates released last week indicate the country added another 288,000 positions in June.

The public sector, however, continues to lag behind: State and local governments remain 425,000 jobs short of where they were when the recession began in late 2007.

While private employers slowly expanded payrolls over the past few years, growth in the public sector didn’t pick up until much more recently. Local governments, which added an estimated 22,000 positions last month, only began recording consistent job gains about a year ago. For state governments, employment still hasn’t rebounded, remaining relatively flat since early 2012.

Although the public sector has downsized, the extent of job losses varies significantly across states.

In about half of states, local governments have yet to recover all jobs lost since the official start of the recession in December 2007. The following chart shows states that haven’t reached pre-recession levels, ranked by percentage decline:

It’s no surprise that localities in states with hard-hit economies needed to trim payrolls. Rhode Island and Nevada, for example, also have the nation’s two highest unemployment rates.

By contrast, Texas and Missouri both have seen local government payrolls expand by more than 20,000. Most states that have added jobs, though, only registered increases of no more than a few percentage points over the six-and-a-half-year period. (See full table below).

To a large degree, public employment is tied to how well the private sector grows and provides for tax revenue. Local governments also rely on states and the federal government to fund their budgets. So, in a slowdown of the economy, there’s a time lag that occurs before localities take a hit.

It’s for this reason that cuts to local government payrolls didn’t begin to accelerate (at least nationally) until 2010. Many localities continued to add jobs after other sectors of the economy trimmed payrolls, so the chart above understates some of these job losses.

To show the extent to which the sector has shrunk, here are peak local government employment levels for each state. These figures represent the highest monthly total employment recorded from the official start of the recession up through 2012.

Here’s a chart showing how peak local government employment totals compare with states’ most recent estimates for May:

By this measure, all but eight states (not shown) haven't recovered lost local government jobs.

Fluctuations to school budgets drive much of the totals since education jobs account for about half of employment at the local level. 

Along the same lines, most states have yet to reach peak employment levels for the private sector. Even states where the jobs market has fully recovered need to expand further to account for population growth.

So, while employment has surpassed pre-recession totals, economists suggest the national economy must still add several million more jobs before unemployment drops to normal levels.

Local and State Government Employment Data

             
State Government Sector % Change Since Recession Start Change Since Recession Start Pre-2013 Peak Employment % Change from Peak Change from Peak
Alabama Local -2.7 -5,900 June 2008 -3.4 -7,600
Alabama State 1.0 1,100 Dec. 2010 -2.8 -3,100
Alaska Local 4.8 1,900 Dec. 2010 -1.9 -800
Alaska State 5.6 1,400 Jan. 2011 -3.0 -800
Arizona State -11.3 -10,200 Aug. 2008 -13.2 -12,100
Arizona Local -6.3 -18,000 Jan. 2008 -7.4 -21,500
Arkansas Local -1.4 -1,700 June 2010 -4.4 -5,400
Arkansas State 6.9 5,000 June 2011 0.8 600
California Local -7.4 -132,200 Sep. 2008 -7.8 -138,800
California State 0.8 4,100 Aug. 2009 -0.7 -3,600
Colorado Local 2.5 6,100 May 2009 -0.2 -400
Colorado State 26.6 22,900 Dec. 2012 8.1 8,200
Connecticut State -6.2 -4,300 Apr. 2008 -7.6 -5,400
Connecticut Local -6.1 -9,900 June 2008 -6.8 -11,100
Delaware State 1.6 500 Mar. 2009 -2.1 -700
Delaware Local 7.6 1,900 July 2010 2.3 600
Florida Local -5.9 -46,400 Jan. 2008 -6.1 -47,600
Florida State -4.0 -8,700 Aug. 2010 -5.3 -11,500
Georgia State -5.5 -10,000 Aug. 2008 -7.7 -14,200
Georgia Local -4.1 -17,200 Nov. 2008 -6.7 -29,400
Hawaii State 0.5 400 Nov. 2008 -6.4 -5,100
Hawaii Local 2.2 400 Sep. 2009 -1.6 -300
Idaho State -2.4 -700 Mar. 2009 -7.7 -2,400
Idaho Local 4.5 3,400 Oct. 2009 1.9 1,500
Illinois Local -1.6 -10,100 May 2009 -3.4 -21,300
Illinois State 0.8 1,200 Sep. 2010 -0.7 -1,000
Indiana Local -4.1 -11,600 Aug. 2010 -8.1 -24,000
Indiana State 2.9 3,300 May 2011 -4.3 -5,200
Iowa Local 2.6 4,400 July 2011 -1.2 -2,100
Iowa State 3.3 2,200 Mar. 2009 0.9 600
Kansas State -8.9 -4,800 Jan. 2011 -17.1 -10,100
Kansas Local 0.5 900 July 2010 -2.4 -4,500
Kentucky Local 1.4 2,600 Feb. 2012 -1.4 -2,600
Kentucky State 11.7 11,900 Apr. 2012 2.9 3,200
Louisiana State -17.1 -19,600 Jan. 2009 -19.2 -22,500
Louisiana Local -2.1 -4,500 June 2010 -6.3 -14,100
Maine State -5.0 -1,400 Apr. 2008 -5.3 -1,500
Maine Local -4.7 -2,900 June 2008 -5.1 -3,200
Maryland Local 2.4 6,000 Aug. 2008 0.4 900
Maryland State 4.1 4,400 June 2011 -1.5 -1,700
Massachusetts Local 0.4 1,200 July 2008 -0.4 -1,000
Massachusetts State 7.9 9,200 Sep. 2012 -1.3 -1,700
Michigan Local -14.2 -60,500 Aug. 2008 -14.2 -60,600
Michigan State 8.8 14,800 Jan. 2012 1.2 2,100
Minnesota Local 0.2 700 July 2009 -1.3 -3,800
Minnesota State 1.8 1,800 Sep. 2011 -2.0 -2,000
Mississippi Local 0.1 100 July 2009 -1.4 -2,200
Mississippi State 2.0 1,200 Dec. 2010 -1.9 -1,200
Missouri State -5.4 -5,700 Aug. 2010 -10.6 -12,000
Missouri Local 7.2 20,400 Dec. 2012 3.2 9,500
Montana Local 1.2 600 July 2010 -4.3 -2,200
Montana State 9.1 2,300 Sep. 2012 0.4 100
Nebraska Local 1.6 1,700 July 2009 -3.3 -3,700
Nebraska State 9.5 3,700 May 2012 1.7 700
Nevada Local -8.2 -8,600 Oct. 2008 -11.1 -12,000
Nevada State 0.5 200 Aug. 2008 0.0 0
New Hampshire Local -4.6 -2,800 Aug. 2008 -9.3 -6,000
New Hampshire State -2.9 -700 June 2009 -9.9 -2,600
New Jersey State -6.1 -9,300 June 2008 -7.4 -11,600
New Jersey Local -3.5 -15,100 Aug. 2009 -4.7 -20,700
New Mexico Local -3.2 -3,400 Aug. 2009 -5.1 -5,500
New Mexico State -2.2 -1,300 Dec. 2007 -2.2 -1,300
New York State -4.1 -10,800 July 2008 -5.4 -14,300
New York Local -3.8 -42,700 July 2009 -8.9 -105,700
North Carolina State -0.6 -1,200 Nov. 2008 -3.0 -6,400
North Carolina Local 0.0 100 Sep. 2008 -3.7 -16,800
North Dakota Local 7.2 3,100 July 2012 1.3 600
North Dakota State 7.4 1,700 Oct. 2010 -0.8 -200
Ohio Local -7.3 -40,200 Feb. 2008 -8.0 -44,200
Ohio State 1.5 2,500 June 2012 0.7 1,100
Oklahoma State 1.1 900 Sep. 2011 -1.7 -1,500
Oklahoma Local 5.2 10,700 July 2009 -1.7 -3,800
Oregon Local -3.9 -7,400 July 2009 -6.4 -12,400
Oregon State 11.1 8,300 July 2010 2.2 1,800
Pennsylvania Local -5.8 -28,400 Nov. 2009 -8.3 -41,600
Pennsylvania State -0.5 -800 Aug. 2010 -2.9 -4,800
Rhode Island Local -9.7 -3,600 Jan. 2008 -10.2 -3,800
Rhode Island State -4.7 -800 Dec. 2007 -4.7 -800
South Carolina Local 2.2 4,700 Nov. 2008 -0.5 -1,000
South Carolina State 2.9 2,900 Mar. 2012 -0.2 -200
South Dakota Local 2.1 1,000 Aug. 2010 -2.7 -1,300
South Dakota State 3.4 600 Sep. 2010 -2.1 -400
Tennessee State -4.6 -4,500 June 2010 -6.6 -6,600
Tennessee Local -0.4 -1,200 Aug. 2011 -2.5 -7,200
Texas State 2.9 10,200 June 2010 -2.9 -10,800
Texas Local 5.8 69,900 Oct. 2010 0.1 1,500
Utah Local 11.1 12,200 July 2012 1.1 1,300
Utah State 17.8 11,300 Apr. 2012 7.8 5,400
Vermont Local -0.3 -100 June 2009 -3.9 -1,200
Vermont State 1.6 300 Aug. 2012 -6.1 -1,200
Virginia Local 0.5 1,900 Aug. 2008 -2.0 -7,600
Virginia State 5.8 8,800 Dec. 2012 -0.2 -400
Washington State 0.3 500 June 2008 -2.8 -4,300
Washington Local 1.9 6,100 Aug. 2008 -1.3 -4,400
West Virginia State 13.3 6,100 July 2012 2.8 1,400
West Virginia Local 16.9 13,000 May 2012 6.5 5,500
Wisconsin State -4.6 -4,800 Oct. 2008 -6.0 -6,300
Wisconsin Local 1.3 3,700 Sep. 2008 -3.2 -9,600
Wyoming State -0.6 -100 Dec. 2012 -3.8 -600
Wyoming Local 9.5 4,300 July 2012 -1.2 -600

NOTE: Figures compare job totals using preliminary estimates for May. The start of the recession refers to December 2007; peak employment refers to the highest monthly total from December 2007 through 2012.
Source: Governing calculations of Bureau of Labor Statistics seasonally-adjusted data