Essential Municipal Employees Vulnerable to Severe Cuts

Cities, towns and villages across the nation are preparing for significant budget cuts and the difficult decisions that accompany them. The fiscal impacts of the economic downturn caused by COVID-19 are not just numbers on a page. They include massive layoffs, furloughs and pay cuts that affect the lives of thousands of municipal employees, their families, the communities they serve and their local economies.

According to the Bureau of Labor Statistics, state and local public employees make up approximately 13% of the American workforce, with municipalities alone employing nearly three million people nationwide. These employees provide critical services from public safety and sanitation to infrastructure and healthcare, and more; services deemed essential to the operations of our communities during the pandemic.

To better understand how municipal employment will be impacted by the current fiscal crisis, we analyzed municipal employment data from the Annual Survey of Public Employment and Payroll along with budget impact data derived from the NLC-USCM COVID-19 Local Fiscal Impact Survey of about 2,500 local governments. Our initial findings indicate that nearly one million municipal employees stand to be affected by forced local fiscal actions including layoffs, furloughs, pay cuts and hiring freezes.

Forced Fiscal Choices

The vast majority of communities across the country – from small to large, east to west – anticipate a significant revenue shortfall this year. Given tight restrictions on their revenue-raising authority, many municipalities have no choice but to severely cut services, and in turn, the hard-working municipal workers who provide them.

In Monroe, LA, all city employees, including the mayor, will be furloughed for one hour each week, and the fire department will take pay reductions. Over 25% of the city workforce in Tulsa, OK, 15% of the city of Aurora, CO’s workforce, and 30% of Oxford, MS’s are being furloughed. The city of Boulder, CO is placing a hiring freeze on 83 positions and furloughing 737 workers. In Portland, OR, nearly 35% of the city’s workforce is being affected by budget cuts, including layoffs for 950 employees, and furloughs and pay freezes for another 1,700. Augusta, GA will require two furlough days for all of its employees, and has laid off 30 employees, both full and part-time. The impacts are so significant in San Antonio, TX that the city is mass filing for unemployment insurance benefits for all furloughed employees to facilitate the process. Mayors and department heads in most of these cities are also taking pay cuts.

These local actions demonstrated that the current crisis is not just a skim from the top scenario. All options are on the table, even public safety cuts, which is typically a canary in the coal mine for just how deep and widespread the impacts will be.

Municipal Employees are Vulnerable

To calculate the scale of the impact of forced fiscal decisions on the full municipal workforce, we start with data from the NLC-USCM survey to identify the share of municipalities by population size reporting revenue shortfalls this year. Nearly all cities greater than 50,000 in population reported that they will experience a revenue shortfall this year, with 87% of cities less than 50,000 in population reporting revenue shortfalls.

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We married this information with data from the Annual Survey of Public Employment and Payroll to obtain the number of people employed in cities experiencing revenue shortfalls. Vulnerable employees, those at-risk of layoffs, furloughs and pay freezes due to revenue shortfalls, represent 95% of the municipal workforce.

Based on our extensive engagement with local leaders and research of fiscal actions in nearly 100 cities, we ascertain that local governments experiencing revenue shortfalls are turning to layoffs, furloughs, pay freezes and other reductions at a magnitude affecting roughly 10% to one-third of their municipal workforces. Applying this rate to the number of vulnerable employees across city population categories translates to 280,570 to 925,879 municipal workers affected by the local fiscal crisis caused by COVID-19.

These employment impacts are significant. Municipal employees are the bread and butter of America’s middle class, and although often under-appreciated, are those, like sanitation workers and those serving the homeless, who are keeping our communities operational during this historic and challenging time. The city manager of Augusta, Ga. speaks for many local leaders across the country when he shared, “We are blessed with a wonderful, dedicated workforce and the steps being taken to be financially responsible are painful ones.”


About the Authors

Christy McFarland small


Christiana McFarland is NLC’s Research Director. She leads NLC’s efforts to transform city-level data into information that strengthens the capacity of city leaders and that raises awareness of challenges, trends and successes in cities. Follow her on Twitter @ckmcfarland.


Spencer-Wagner-small.jpgSpencer Wagner is the Program Specialist with NLC’s Local Democracy Initiative. His research focuses on state preemption of local policy and its impacts.