Spending Cuts

Confronted with fiscal pressures, cities are reducing personnel commitments, delaying or cancelling infrastructure projects, and cutting local services.

  • The most common response is reducing the size of the municipal workforce (48%).
  • One in three city finance officers (33%) also report delaying or cancelling capital infrastructure projects.  
  • Only fifteen percent of cities cut public safety expenditures (compared to 44% reporting increased spending)
  • Twenty-one percent decreased human service spending (12% increased).
  • Nineteen percent cut education spending (8% increased).  
  • One in four (25%) made cuts in services other than public safety, human-social services, and education – services such as public works, libraries, parks and recreation programs.

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Personnel-related Cuts

The 2010-2012 surveys also asked about specific types of personnel-related cuts enacted.

  • In 2012, the most common cut so far was a hiring freeze (45%).
  • At least one in four cities reduced or froze employee wages (32%) or reduced health care benefits (27%).
  • Other personnel actions to date have included layoffs (18%), revising union and employee contracts (16%), reducing pension benefits (15%), early retirements (14%), and furloughs (11%).  
  • Many cities used some combination of these types of actions in an effort to reduce personnel costs.
The combination of these personnel-related cuts has resulted in a significant reduction in the size of local government workforces. However, the percentage of city finance officers reporting these actions in 2012 is, in all categories, lower than in 2011.  

In 2011, a separate NLC survey on local jobs projected a total reduction in city and county employment of nearly 500,000 positions from 2010 to 2012. More recently, the U.S. Bureau of Labor Statistics’ latest national unemployment numbers, as of August 2012, revealed that total local government employment in the U.S. had decreased by approximately 650,000 jobs from peak levels in 2008.

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