Survey: Recession lingers for county governments
Even as economists proclaim that the national recession is over, local governments continue to feel the effects of the economic slowdown, according to a survey by the Washington-based National Association of Counties (NACo). NACo’s “The Recession Continues: An Economic Status Survey of Counties” shows that many counties are seeing less revenue, particularly from their state governments, and still are making cuts to adjust for that loss.
“The Recession Continues,” the sixth in a series of NACo state of the economy surveys since 2007, shows that counties are being forced to cut services and employees. The new data shows that furloughs and layoffs have increased, and 53 percent of counties are working with fewer staff today than in fiscal year (FY) 2010.
The survey’s key findings include:
• Declining revenues from the state were the No. 1 contributor to lower revenue for counties (46 percent);
• Counties are making administrative changes, delaying activities, using rainy day funds and adjusting personnel to keep their budgets balanced;
• More than half of the counties surveyed have fewer county staff than they did in 2010 (53 percent).
In previous surveys, most respondents said they were forced to revisit budget adjustments mid-year because of unanticipated revenue shortfalls, but the new survey shows only 17 percent of the 500 counties that responded to the survey experienced shortfalls after the adoption of their FY2011 budgets. “After multiple tough budget cycles, counties appear to be settling into the ‘new normal’ of revenue and staffing levels,” said NACo President Glen Whitley in a statement. “However, the budget cuts have become increasingly more severe and are affecting more Americans. Counties are not out of the woods. Additional state aid cuts are looming, increased energy and operating costs are nearly certain, and increasing demands for public services remain.”
As reported in all of the previous surveys, most counties are avoiding raising taxes. Fifteen percent of counties reported increasing property tax rates, and 2 percent have increased local option sales tax rates. Instead, most counties have taken other budget adjustment actions, such as:
• 47% have delayed purchases and repairs
• 47% have delayed capital investments
• 45% have instituted salary and/or pay freezes
• 41% have instituted hiring freezes
• 40% have used their rainy day funds
• 37% have instituted employee travel restrictions
• 31% have delayed construction
• 24% have laid off county workers
Read the full survey.