While the economy overall may beslowly recovering, public-sector budgets won't see much reliefuntil a year or more after the U.S. economy finally stabilizes.
|“[The public sector] is always at least a year and a half or twoyears behind the rest of the economy when it comes to recovery,”says Sarah Perry, risk manager for the City of Columbia, Mo.
|Municipalities, she explains, have to base budgets on thenumbers they have on hand; they can't project variables like taxhikes or other revenue increases into the budget.
|“We have always been very careful, fiscally,” says Perry, andthat prudence has paid off. “We're not like other public entitiesthat have had massive layoffs.”
|In Columbia, “the pension battle continues,” Perry adds. Publicentities, she notes, are among the few organizations that stillhave pension programs—although many do not have defined plans forfunding them in a beleaguered economy.
|Columbia is still paying pensions but also taking a harder lookat funding and the retirement-eligibility process, she says.
|In Gainesville, Ga., “we did have some layoffs, but thankfullynot nearly as many as some public and private organizations havehad to face,” says Cindy Mallett, the city's human-resources andrisk manager.
|Scaled-back budgets forced Gainesville, just north of Atlanta,to cut some of its social-services programs, raise taxes, lay offsome 25 public employees and make other city workers take monthlyfurloughs. The public workforce has been reduced by some 10 percentsince 2009.
|But the economic situation is brightening: In November the citycouncil approved a one-time payment of $1,000 each for allfull-time public employees (who had not seen a pay raise since2007).
|The move stemmed from an unexpected budget surplus that was some$1.3 million higher than expected; the city attributed it to taxesand municipal court fines that brought in nearly $400,000 more thanwas projected, as well as to money-saving efforts by citydepartments, like police and firefighters, which spent nearly$800,000 less than expected due to their own fiscalmindfulness.
|Mallett says she's pleased the city's cost-conscious effortshaven't been in vain.
|“I don't know that it's so much the economy is improving—or thatwe have, over the last couple of years, tried to make some choicesthat would put us in a better position.”
|About the future, she says, “I'm cautiously optimistic.”
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