- The Washington Times - Monday, January 23, 2012

Across the nation, fewer state and local government employees are losing their jobs, marking a slight but significant return of economic confidence after years of massive cuts.

While the hard-hit government sector has not experienced the rebounds of manufacturing and other key private-sector areas, optimism is rising ever so cautiously as the unemployment rate improves from 2008 recession levels.

Government figures show that state and local governments cut jobs by 24,000 in December 2010, but that number was 14,000 for the same month in 2011.

The shift could be significant because deep cuts by state and local governments proved a major drag on the economic recovery, particularly after funds from President Obama’s original stimulus package were depleted. While most industries in the private sector resumed hiring in 2011, nearly 300,000 state and local jobs were eliminated, according to Commerce Department figures.

State appropriations on higher education fell by 7.6 percent in the latest fiscal year, according to a separate study released Monday - the largest such decline in at least a half-century.

Neil Reichenberg, executive director of the International Public Management Association for Human Resources, said he hopes the rate of job cuts is ebbing. His organization represents public-sector hiring professionals from all levels of government.

The association conducts an annual survey of its human resources personnel and in 2011 found slight improvement in the government-hiring outlook.

In 2010, 45 percent of those responding to the IPMA-HR survey said they planned to fill new positions while 55 percent said they didn’t. In 2011, 47.5 said they would be hiring, while 52.5 answered negatively. In 2010, 32 percent said they planned to eliminate positions. Last year, 23 percent said they would be cutting jobs, and 77 percent said they would not.

A little more than 1.9 million private-sector jobs were added nationwide in 2011, and “to the extent private-sector hiring picks up, obviously it is going to have a trickle-down effect on state governments,” Mr. Reichenberg said.

“You may see mortgage situations improve, spending improving, sales tax revenue going up and all of it will help state governments. I think that the recovery has been a slow one and probably not a steady one. I think that the public sector was later into the recession and data would suggest that they would be slower getting out than the private sector,” he said.

In Michigan, hit hard by the sinking economy, the outlook is holding steady. The state’s jobless rate dropped by 2 percentage points in 2011, hitting 9.3 percent in December, its lowest figure since September 2008 when it was 8.9 percent.

“There is nothing to indicate that local or state government is failing significantly. It’s not a big story here,” said Doug Roberts, a former Michigan state treasurer who leads Michigan State University’s Institute for Public Policy & Social Research.

He cautions that the state data on government employment figures is difficult to compare as states have different definitions for what they count in local and state employment figures, including K-12 and higher-education jobs, which can obscure the full picture.

“Michigan is down, but the worst may be over,” he said, citing a surprising $450 million budget surplus announced by Gov. Rick Snyder in his state of the state address last week. “State employees have been down. Local government is down from its high of four or five years ago. But it may not be as bad as many of the other states.”

In Kentucky, where the unemployment rate fell to 9.1 percent in December, its best jobless figure since 2008 when it was at 8.5 percent, the Bluegrass State added 1,000 government jobs last year, one of seven sectors to mark improvement, according to the Office of Employment and Training.

In Minnesota, where unemployment fell to 5.7 percent in December, the lowest number since September 2008, the Department of Employment and Economic Development said the biggest job winners came from the government sector along with professional and business services, education and health care and manufacturing, among others.

In Utah, where unemployment dropped to 6 percent in December, gains were reported statewide in all job sectors except government. Economist Mark Knold of the state’s Department of Workforce Services told the Deseret News that he expected that sector to also improve.

“It is anticipated that future revisions will ultimately move government to the positive side of the ledger,” Mr. Knold told the Salt Lake City paper. “These government gains will show up in education - kindergarten through universities.”

Across the nation, 45 states reported rises in revenue in 2011, according to data from the Rockefeller Institute of Government, although closing the recession-era gaps marked by huge losses over the past few years may dim the fiscal picture for many.

“It’s a very unsettling time,” said Michigan State’s Mr. Roberts. “Some of the recent numbers we are seeing are positive. On the other hand, the World Bank is calling for a terrible year and has lowered its real GDP forecast for all Western democracies. I’m not sure they are right, and reasonable people are not yet convinced. There is still some reason to be concerned, but there is also reason to be upbeat.”