Finance Employees Are Fastest-Growing Segment of Local Government Workforce
Local governments in nearly all states reported slight increases in staffing for accounting, budgeting and other areas of public finance.
Most local governments haven’t been on hiring sprees lately. But one area where they appear to be adding employees is finance.
The latest data from the Census Bureau’s Annual Survey of Public Employment and Payroll shows that employees working in finance-related roles increased 5.4 percent between 2014 and 2017. While that might not be a big jump, it’s significant in that it’s the highest of any workforce category tracked in the Census survey.
Finance jobs peaked in 2008, subsequently declined as governments made recession-era cuts and then changed little until 2016. Since then, they’ve expanded at roughly double the rate of total local public-sector employment when education jobs are excluded. Other areas of local government experiencing noticeable growth, albeit at a slower pace, include transit, fire departments, parks and recreation.
Although payrolls are growing slightly, total U.S. local government employment remains just below pre-recession levels. It’s also worth noting that, despite the uptick, finance employees still account for only a tiny share of the overall public workforce. The Census survey counted about 239,000 full-time equivalent finance employees last year.
Localities in all but five states and the District of Columbia reported increases in financial administration workers over the three-year period. In nine states, the increase exceeded 10 percent: Idaho, Kansas, Louisiana, Nebraska, New Hampshire, Pennsylvania, Tennessee, Utah and Washington. (The bureau’s definition of “financial administration” employees includes those working in accounting, auditing, budgeting, purchasing, revenue collection and other finance activities.)
There’s no single explanation for the increase. But, according to Emily Swenson Brock of the Government Finance Officers Association (GFOA), one factor may be the reorganization or centralization of finance offices. A city, for instance, may consolidate financial activities within each department into a central office. So it might not be that localities are hiring employees working on finance and budget activities, but merely shifting them around.
Relatedly, greater professionalization of public finance could also be playing a role. GFOA reports the number of people taking exams for its certified public finance officer program increased significantly in recent years. Over the past three years, an annual average of 438 people took exams, about 200 more than prior years. Jeff Broughton, director of the Tennessee City Management Association, notes the state passed a law in 2007 requiring nearly all cities employ certified municipal finance officers. The state recorded one of the largest increases nationally in recent years, possibly a result of cities continuing to add certified personnel.
Strengthened reporting requirements, according to GFOA’s Brock, could further be driving up the totals. The Securities and Exchange Commission initiated new disclosure mandates for issuers of municipal securities, while the Governmental Accounting Standards Board has also implemented new rules.
Local government staffing is somewhat a reflection of its shared responsibilities with states, so a greater burden on localities could result in a shift from states to their local public workforces as well. This doesn’t appear to be happening at the state level, though -- at least nationally. Total state government financial administration employment remained essentially unchanged over the three-year period ending last year, according to the survey data.
Cities and counties with tight budgets, though, are keeping a close eye on their finances. "As states have been restricting aid payments to local governments," says Craig Maher, president of the Great Plains Government Finance Officers Association, "they’re really being forced to do more and manage their resources as effectively as possible."
Local Government Financial Administration Employment by State
The following data represent aggregate totals for full-time-equivalent local government financial administration employees within each state:
|District of Columbia||-2.9%||1,867||1,639||1,719||1,812|