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More Job and Service Cuts Coming from Strapped Counties and Cities

Washington Post via YellowBrix

July 28, 2010

Local governments across the country are facing an intensifying fiscal crisis that is forcing them to make deep cuts in personnel and services just as more hard-pressed residents are seeking their help, according to a report released Tuesday.

These cities and counties — which have cut jobs significantly since the start of the downturn — could slash as many as 500,000 more jobs over the current and coming fiscal years. The cuts would affect schools, public safety, libraries, trash collection and social services, according to survey released jointly by the National League of Cities, the National Association of Counties and U.S. Conference of Mayors.

Combined with the fiscal stress confronting state governments — which face a combined budget deficit of $89 billion this year — the crisis faced by counties and cities hampers the struggling economic recovery, analysts have said.

The Economic Policy Institute, a liberal research group, estimates that for every 100 public sector jobs that are cut, an additional 30 jobs are lost in the private sector, which relies heavily on governments as customers.

Together, state and local governments are one of the nation’s largest job sectors and economic drivers — larger than the manufacturing and construction industries combined, the report said.

City and county government groups joined with supporters in Congress at the Capitol on Tuesday to repeat their call for Congress to pass $75 billion in aid for local governments over the next two years.

“Congress and the administration must act to create jobs now and help stabilize local government economies,” the report said.

Many economists have endorsed targeted stimulus measures to boost the economic recovery in the short term. But the bill’s prospects are in doubt, as Republicans and conservative Democrats in Congress want action on deficit reduction and have grown resistant to new economic stimulus measures.

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