STATE AND LOCAL GOVERNMENTS CUT 83,000 JOBS IN FEBRUARY, SHOWING NEED FOR AID IN AMERICAN RESCUE PLAN
State and local governments are in desperate need of federal aid to keep essential workers on the jobs, reopen schools safely, and get Americans vaccinated. In February, state and local governments shed 83,000 jobs, including 69,000 educator jobs, according to today’s report from the Bureau of Labor Statistics. That adds to the nearly 1.4 million workers that states and local governments have had to layoff since the pandemic began — nearly double the amount of job losses during the Great Recession.
The American Rescue Plan would provide $350 billion for state and local governments to keep essential workers on the job, get Americans vaccinated, and support local economies.
From the New York Times’ Neil Irwin:
“One worrisome sign in the new employment numbers: State and local governments appear to be cutting jobs en masse. They cut a total of 83,000 positions, about 69,000 in education.
Will many of these jobs come back, if schools are able to operate at full capacity by the fall? The Biden pandemic rescue plan before the Senate includes $130 billion to help schools reopen safely, and an additional $350 billion to support state and local government budgets more broadly. If that money proves adequate to the task, the February job cuts could turn out to be a temporary blip.”
A year of rising costs and depleted revenues have left state and local governments in dire need of additional federal aid.
State and local governments face staggering budget shortfalls of at least $300 billion through 2022.
This $300 billion figure does not include a host of additional Covid-related costs, like testing and tracing, providing PPE, and emergency mental health and food assistance programs.
Nor does it include lost investments from states forced to scale back plans like Florida nixing a planned teacher pay raise and Maryland canceling a school funding plan.
Local governments, which make up 13 percent of all employment, have already had to lay off 1.4 million workers. That’s nearly double the amount of jobs lost after the Great Recession. Millions more jobs are at risk without more federal help.
Cities alone lost up to $134 billion in revenue this year, and will lose $360 billion over the next three years — causing 74% of municipalities to start making cuts to things like PPE and essential services in anticipation of additional shortfalls.
Rising pandemic costs forced 65% of cities to delay or cancel capital expenditures and infrastructure projects, which in turn stifles job growth, slows local economic activity, and inevitably places additional long term fiscal burdens on the federal government.
A year ago, funding from the CARES Act helped prevent a greater disaster — proving that stimulus works. But now, experts estimate that state revenues are still nearly 8% below pre-Covid projections even after 90% of available Covid relief funds have been allocated. Much more is needed to stave off further damage to our communities and economy.
Investing in state and local aid boosts the economy, while underfunding state and local governments will prolong the country’s economic recovery.
Every dollar invested in state and local aid generates $1.36 in GDP growth.
In 2008, deficit hawks stripped billions in state and local aid from the American Recovery and Reinvestment Act. Without the aid they needed to keep government workers on the job, it took nearly a decade for state and local governments to return to pre-crisis employment levels, slowing the pace of the recovery for the country.