Government, break out the pink slips

Any expectation that state and local governments would use the worst fiscal crisis since the Great Depression to reduce their biggest expenditures is proving to be wishful thinking.

Companies have cut 7.3 million jobs, 6.29 percent, since business employment peaked at 115.8 million in December 2007. State and local governments kept adding jobs through August 2008 to 19.8 million and have since cut 132,000 positions -- 0.66 percent, according to the U.S. Labor Department.

Blame it on education, which accounts for 53 percent of the total number of government employees on the job. When it comes to something like class size, Americans don't think bigger is better.

The numbers across the nation break down this way: States have dismissed 15,000, or 0.28 percent, of the 5.2 million they employed at the peak. Local governments have cut 117,000, or 0.8 percent, of the 14.6 million workers they employed.

States (their total general fund spending in fiscal 2009 totaled $663 billion) had to address budget gaps of $145.9 billion for fiscal year 2010 (which began in 46 states in July 2009). They sliced away.

Now, 36 are looking at closing new shortfalls of $28 billion, according to the National Conference of State Legislatures. For fiscal 2011, 35 states and Puerto Rico project $55.5 billion in red ink.

The states have raised taxes and fees, cut programs and services, sold property, borrowed money, raided rainy-day funds, tapped emergency money provided through the American Recovery and Reinvestment Act of 2009, according to the National Governors Association and National Association of State Budget Officers -- and cut a quarter of 1 percent of those on the payroll.

State and local government pensions nationwide are underfunded by about $1 trillion, Orin S. Kramer, chairman of the New Jersey Investment Council, which oversees the state's pension fund, estimated in November. That doesn't include other retirement benefits, such as health care, which Standard & Poor's earlier this year pegged at about $500 billion for the states alone. The state of public pensions is a real problem.

The real story is that our governments aren't resisting firing employees. They are refusing to do so, instead opting for temporary furloughs.

Businesses fire workers in hard times. They call that becoming leaner and more efficient and running smarter. It's also called a common-sense strategy for survival.

Politicians everywhere are talking about layoffs, of course. They have been talking about eliminating jobs, often in threatening tones, since at least January. As the numbers show, for most, it's just talk.

Consider Maryland. The state is looking at a $3 billion budget gap in fiscal 2011, or about 20 percent of its general fund budget. The state began the year with 108,600 employees, and counted 110,100 on the payroll through November, according to the Bureau of Labor Statistics. Localities began with 247,000, and now employ 250,300.

Gov. Jim Doyle of Wisconsin was quoted last week calling 2009 his most challenging year in office. In 2009, the state added 2,600 to its payroll and now employs 105,000. Wisconsin localities added 800 new jobs, bringing the total to 289,200.

Nevada faces a $1.3 billion budget gap in fiscal 2011, almost 33 percent of its general fund budget. The state began the year with 37,500 employees and ended it with 36,600.