The coronavirus-induced economic crisis has devastated many parts of our economy this year, including state and local governments’ budgets that provide essential services like public safety, education, and nursing. In today’s blog, we will take a deeper look at how the pandemic has impacted state and local government employment.
Background
Every state in the Union except for Vermont is required to pass a balanced budget each fiscal year, and local governments are required to do the same. If these states and localities cannot generate enough revenue to offset their expenses, they are often forced to make painful decisions about whether to enact budget cuts to overcome a shortfall.
State and local governments have seen two significant sources of tax revenue plummet due to the current economic downturn: income and sales taxes. With an unemployment rate of 6.9 percent as of October (almost twice as high as it was before the pandemic began in March), there is less income for governments to tax. People also have to cut back on spending to make ends meet, leading to the collection of fewer sales taxes.
Source: U.S. Bureau of Labor Statistics
As a result, each state in the country has experienced a decrease in tax revenues. Many states that rely on in-person consumer spending, like the tourism, hospitality, and restaurant industries, may continue to experience further erosion of their revenues, which will make it challenging to balance their budgets.
Impact on Public Employment
This year’s economic dip has had a negative impact on state and local government employment. As of September, according to the Center on Budget and Policy Priorities (CBPP), there were 1.2 million fewer public employees on the job compared with February of this year.
Source: CBPP
Over 70 percent of the public employees that have been laid off or furloughed work in K-12 and higher education, according to the CBPP, which includes “counselors, nurses, janitors, and maintenance workers,” in addition to educators. Additionally, more educators are also opting to retire early, as one in three of them say they are more likely to retire early instead of potentially facing exposure to COVID-19 on the job.
Amidst a pandemic and potential budget cuts, public employees still serve our communities
Despite working through a pandemic and facing potential layoffs and furloughs, the vast majority of public employees value the service they provide for their communities. According to a survey from the Center for State and Local Government Excellence (SLGE) examining public employees’ views of the pandemic and their employment, 61 percent said they valued serving their community during this crisis.
Public employees like nurses, firefighters, municipal workers, teachers, and public safety officers devote their careers to keep our communities healthy and safe. While we can’t predict the pandemic’s future effects on them and other public employees, we can still protect their hard-earned retirement security by advocating for their public pensions in 2021 and beyond. Because of these pensions, public employees can retire with the security and dignity they deserve after a lifetime of protecting us.
