This morning I mentioned the drag that state and local fiscal contractions are having on jobs and growth and threatened to post some graphs. Coming up for air now, so here they are.
In normal times, spending and investing by state and local governments adds to growth. But in recent quarters, they’ve either added little or subtracted from GDP growth. There may be some improvement coming on that front, at least based on increased state tax revenues in some states, but local governments will be dealing with weak property tax collections for awhile, yet another spillover from the housing bubble.
State and local employment growth has been an even more consistently negative, losing ground while overall employment is up. Outside the state and local sector, employment’s up 2.1 million jobs since January 2010. But states and towns have given up 300,000 jobs, with local education down 144,000.
It’s picture like these we want to keep in mind, or more pointedly, pictures of the hardship trends like these imply for working families, for local school districts trying to meet kids’ educational needs, when we’re contemplating short-term spending cuts.