Survey: Layoffs ease in local governments, but big challenges remain

Mirroring the national economy, a new study reveals a mixed picture of the financial health of state and local governments. Fewer governments say they are laying off staff this year, but more than half are still freezing pay and cutting benefits, according to the survey, “State and Local Government Workforce: 2012 Trends,” by the Center for State and Local Government Excellence.

The survey is a follow-up to three previous studies by the Center examining the government workforce. The latest survey, from February 27 to March 13, polled human resources and personnel executives, with 82.2 percent of respondents working for local government and 12.3 percent for state government.

  Good news trends this year include declining layoffs, with 28 percent of governments reporting layoffs in 2012. That is compared to 40 percent reporting layoffs in 2011.

For many state and local workers still on the job, according to the survey, their pay is frozen (51 percent), and their health care costs have increased (51 percent). But those figures are also better than last year, when 62 percent of governments reported pay freezes, and 72 percent said they shifted more health care costs to employees.

Some governments are looking to hire, with only 42 percent in the latest survey reporting a hiring freeze. Some respondents said they are having a hard time filling specific jobs, including engineers, financial experts and information technology professionals.

But here’s the downside: Even as they ease layoffs and stabilize budgets, cutbacks by state and local governments continue to help drag down the nation’s monthly employment numbers and slow economic recovery. The Commerce Department reported in April that the gross domestic product, the broadest measure of the nation’s economy, grew at a tepid 2.2 percent annual rate in the first quarter of 2012. That was primarily due to a drop in government spending, including a 1.2 percent decline by state and local governments.