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Public-sector belt-tightening: thrift, or long-term drag on US economy?

Since June 2009, 504,000 jobs have been cut among municipal employees. Public-sector reductions at the local level have subtracted almost a quarter of a percentage point from annual GDP each of the past four years.

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He would prefer not to eliminate jobs, since most of the reductions happen at the lower levels. "In this economy, that's a death sentence to a low-level employee," he says.

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Yet it's not just parks-and-recreation workers losing their jobs. According to the BLS, 297,000 education jobs have been lost since June 2009. That's 59 percent of all local public-sector jobs lost during that period.

Teacher cuts have certainly rippled through Ohio, where Gov. John Kasich (R), dealing with an $8 billion, two-year budget gap, has curtailed the overall funds sent to counties and cities.

On Jan. 1, the city of Monroe, Ohio, notified 30 education staff members that they would be out of a job at the end of the school year. The main cuts were in noncore classes such as art and music.

"We're eating our seed corn," says Suzi Rubin, a council member in Monroe.

One who lost his job is Tom Burklow, a high school teacher with 13 years of experience who had been teaching business technology.

Mr. Burklow, who says he loved the staff and small-school environment, doubts he will be able to land another teaching job in the area, since so many other school districts are also reducing their staffs.

"I've heard about a few spots where there are openings, but both schools said they are not going to fill the jobs," he says. "I don't understand, since schools are our intellectual infrastructure."

Since he has normally been off for the summer, his jobless state has yet to sink in. "I have filed for unemployment; it's the first time I've ever done that," he says. "I think the most immediate impact is that I want to be doing something. Just sitting around the house looking at the dog makes me feel like I'm falling behind."

Still, some elected officials in Ohio see ways that budget cuts have actually helped their towns. In Mount Sterling (pop. 1,700), laying off the entire police force of five deputies and a dispatcher saved the town money, after it contracted with the county sheriff to provide police protection, Mayor Charlie Neff says.

"Now we don't have to worry about buying new police cruisers, setting aside money for retirement, upkeep of equipment, training expenses, or any lawsuits against the police," he says. "The sheriff saves us money and gives us better service."

This is not to say there is no crime in the rural community, which on the surface looks more like a Norman Rockwell small town in need of a paint job. Law enforcement officials recently busted a drug ring in the town, Mr. Neff says.

In the view of some elected officials, communities may have expanded too much in the past and now need to tighten their belts.

"From our standpoint, a lot of local communities went beyond what they needed to do," says Mark Fitzgerald, a council member in the city of Loveland, Ohio. "They built golf courses, added cable TV services," he explains at a dinner with other local legislators.

But Ms. Rubin, the council member in Monroe, worries about the impact of cuts on firehouses and roads. "Once you stop repairing the roads, you never get caught up," she says, adding that cutting too deeply may cost future private-sector jobs.

"Businesses want water. They want services. And if the infrastructure is not there, they are not coming," Rubin says.

Lykins, the firefighter, can attest to how cuts in critical services can affect communities. Last month, on three occasions, Middletown asked one of the fire stations where he now works to help with fires. Middletown is 12 to 15 miles away, and it takes his unit in Liberty Township about 20 to 25 minutes to get there. Typically, a fire department tries to respond to a call in four to six minutes.

"The quicker you get there and can get some water on it, the quicker you can put the fire out," Lykins says.


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