Local governments become less cautious on hiring

February 3, 2013

As many state and local governments strengthen their once-shaky fiscal footing, there are signs that municipalities in the Washington region have returned to a more normal trajectory for hiring after being constrained during the recession and its immediate aftermath.

The government sector added 8,900 jobs in the D.C. area in 2012, according to the Labor Department. That’s nearly twice as many jobs as it added here the previous year. And the sector managed to make those gains despite significant drag from the federal government, where 3,400 positions were lost.

These figures offer evidence that, as the economic recovery crawls forward, some local governments are shaking off the cautious hiring posture that abounded among municipal employers in recent years.

“The state and local governments, the worst is over for them,” said James Bohnaker, associate economist at Moody’s Analytics.

After the financial crisis of 2008, state and municipal governments across the country struggled to deal with budget shortfalls when tax revenue was lower than expected. In many cases, this led the governments to shed jobs or at least implement hiring freezes.

But now, those financial pressures are easing, both here and nationwide.

“At the state level, we’re certainly seeing a situation here in almost every case, revenue is coming in as projected,” said Scott D. Pattison, executive director of the National Association of State Budget Officers.

Among local governments, the pace of improvement has been more varied, said Christy McFarland, interim director of the National League of Cities’ Center for Research and Innovation. This is because municipal revenues are driven largely by property tax collections, and the housing market has rebounded faster in some parts of the country than in others.

Because this region’s housing market has been strong, McFarland said local governments in the Washington area are in a better fiscal position than many of their counterparts nationwide.

Howard County is one jurisdiction that has recently had an uptick in hiring. Todd Allen, the county’s chief human resources officer, said that 43 firefighter jobs were added in January in order to staff a new fire station. Last year, the county created new positions for engineers, maintenance mechanics and skilled equipment operators in its department of public works.

Prince George’s County saw a net increase of about 60 to 70 positions in 2012, according to Thomas Himler, one of its deputy chief administrative officers. The county’s budget authorizes the government to beef up its public safety workforce by hiring 150 recruits for the police department and 70 recruits for the fire department. The budget also allows the county to hire several assistant state’s attorneys.

While the government sector has recently provided a notable boost to the region’s broader job growth, economist Stephen S. Fuller said the gains should be viewed as a correction, not as a new engine for advancement.

“These are more like catching up,” said Fuller, the director of the Center for Regional Analysis at George Mason University.

After normalizing, Fuller said the region can expect the growth rate for jobs such as schoolteachers and public safety workers to be roughly the same as the rate of population increase.

Even as the government sector has shown renewed strength overall, some municipalities report that their hiring is not on the upswing. Fairfax County, for example, says it is not increasing the size of its workforce as it faces a projected $169 million budget shortfall in the 2014 fiscal year and a $274 million shortfall in 2015. It is, however, hiring to fill vacancies and preparing for a potential wave of retirements as much of its workforce ages.

Sarah Halzack is The Washington Post's national retail reporter. She has previously covered the local job market and the business of talent and hiring. She has also served as a Web producer for business and economics news.
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