Local Government Is Major Employer

(from Maine Townsman, November 2009)
By Lee Burnett

Who comes to mind when you think of the quintessential Maine worker? Probably not the filler of potholes, the enforcer of safe building codes or the teacher of school children. But perhaps they should.

Local government jobs may not be as iconic as lobstering, boat building and logging, but they are far more numerous. In fact, local government employees (municipal, school, county and special district) represent one of the largest labor forces in the state. All counted, they number 61,600 strong, according to Maine’s Department of Labor. That’s the third largest employment sector in Maine, behind health care and social assistance (98,100) and retail (85,600). Local government employs more people than the leisure and hospitality industry (59,600), manufacturing (58,900), professional and business (56,000), and accommodation and food service (51,400).

“Local government is a significant employer,” said Charles Colgan, a professor at the University of Southern Maine’s Muskie School of Public Service and chairman of the State of Maine Consensus Economic Forecasting Commission. “Clearly, it varies with the region. Local government – particularly school districts – are pretty important for rural Maine. Local government plays an out-sized role, especially if you don’t have a paper mill or a military base.”

Colgan’s observation is born out by a survey of labor markets in Maine. It shows local government accounts for more than 20 percent of the jobs in rural places like St. George peninsula, Dover-Foxcroft and the border towns near Rochester, New Hampshire. In contrast, local government accounts for less than nine percent of the jobs in more urban places places like Kittery, Portland, Rockland, Bangor and Augusta. (See Table 1)

Who holds these jobs? Not surprisingly, nearly half of all the jobs in local government are held by teachers. (See Table 2) About 10 percent are office jobs held by clerks, receptionists, dispatchers, secretaries and meter readers. Nearly another 10 percent are held by firefighters, police officers, and crossing guards. After that, there’s a huge variety of jobs in local government. Along with the professional types, there are maintenance workers, school bus, ambulance and truck drivers, and construction workers. In the “all other” category are many jobs not immediately associated with local government, such as maids and housekeeping cleaners, child care workers, sailors and marine oilers, amusement and recreational attendants, interpreters and translators and public relations specialists.

Generally, local government jobs are service jobs and labor intensive, explains a labor representative.

“I’m always preaching about local government workers’ significance to the infrastructure and the economy. They’re on the front lines. When a new business forms, one of the first stops is town hall or city hall,” explains Zach Matthews, representative for American Federation of State, County and Municipal Employees. “Education, I’m constantly trying to do this internally with our members. I hope folks understand the importance of truck drivers, treatment plant workers and the importance of clerical workers and the real estate transfers, driver license renewals, building permits. They all kind of make society go.”

Judging from recent news coverage and protests, the public seems to have noticed when budget shortfalls resulted in the layoffs of 24 employees – sheriff’s deputies and clerks – in York County government in mid-September.

Career Path

Employment in local government, of course, offers advantages and disadvantages. It’s hard to generalize about wages because of the diversity of job titles and unique situations. Yearly take home pay varies from less than $10,000 for seasonal parking lot attendants to more than $100,000 for a veteran city manager. Wage scale comparisons with the private sector are imperfect at best. Some occupations like town and city managers are quite different from corporate CEOs. And many local government jobs -- like harbor master, code enforcement officer, firefighters and police officer – exist in few other places.

Table 1

Labor markets where local government accounts for the highest and lowest percentage of jobs

(2008 data from Maine Department of Labor)

The five highest ...

Lebanon, Berwick& South Berwick 31.0 %
Dover Foxcroft -----------------------------23.0 %
St. George ----------------------------------21.7 %
Calais -----------------------------------------19.8 %
Camden --------------------------------------17.4 %

The five lowest ...

Kittery, Eliot--------------------------------- 5.9 %
Rockland -------------------------------------8.2 %
Pittsfield --------------------------------------8.7 %
Bangor---------------------------------------- 8.7 %
Portland --------------------------------------8.7 %

According to data collected by Maine’s Department of Labor in 2008, the job titles in local government that paid more than the private sector include: janitors and cleaners, executive secretaries and administrative assistants, truck drivers and heavy equipment operators, construction laborers, secretaries and highway maintenance workers. Job titles in local government that paid less than the private sector included: human resource managers, finance managers, network and computer systems managers, and grounds and maintenance workers. (See Table 3)

It’s also hard to generalize about benefits. City employees tend to enjoy decent health care coverage and retirement benefits. Employees in small towns often receive no benefits. Benefit packages in local government used to be much more generous than in the private sector but they’re becoming less so today, according to labor representative Matthews. “It used to be the old axiom that if you worked for a town or city the benefits were among the best, but that’s not the case anymore,” said Matthews. “Medical costs are going up. These are shared issues that reflect a trend of the times ...Wages are stagnant, so you don’t have to be a Harvard economist to know where that’s going. Benefits, by and large, used to be better than the private sector. That analysis is a little different now.”

Job security tends to be stronger in local government, primarily because unions, voters and the press are bigger factors than in the private sector. In the private sector, Maine’s status as an “at will” state holds sway. This means that by law private sector employees may be fired – without recourse – at the will of the employer, (except for prohibitions against discrimination according to race or color, sex, sexual orientation, physical or mental disability, religion, age, ancestry or national origin.) Local government accords employees greater rights, according to Matthews.

“Employees in local government faced with severe discipline usually have the opportunity to present their side of the issue,” said Matthews. “There is just cause or due process. This is America.”

Working for the public is a mixed blessing for many employees. “The majority of jobs in local government deal with the public,” said John Doucette, town manager in Skowhegan. “Whether you’re at the transfer station, the highway garage or recreation, you’re dealing with the public. People have to come to see you and sometimes they don’t like it. Employees are the ones taking the brunt of it. The public doesn’t realize the clerk isn’t the guy to blame.” Doucette said he specifically inquires about public relations skills when he hires new employees. “We ask about scenarios, how would you handle that situation? It’s a big part of the interview – how do you handle people who are upset or irate. And training is a big thing I emphasize, especially with young people. They might be good with computers or cash, but not necessarily dealing with the public.” Judging from the lengthy tenure of most town employees, Doucette thinks job satisfaction is generally high. “There’s security, not too many layoffs. Most of the time we have such bare bones budgets that we can’t cut anymore,” he said.

There are psychic rewards in working for the public, says Peggy Daigle, city manager in Old Town who migrated back to the public sector after a year and a half stint in the private sector. “I was well paid and I enjoyed my job, but there wasn’t the same sense of purpose as I have here,” she said.

Many members of the public “take ownership that they’re our bosses,” she notes.

“They don’t like to pay taxes, they don’t like to have to get a permit to do what they want with their property, they don’t feel the snowplow comes by often enough, and they let us know.” But every day, it’s possible to make a difference in someone’s life and that’s rewarding, she said. “That one person can outweigh all the negative things that come your way.”

Daigle believes rank and file employees find similar satisfaction and tells the story of a public works truck driver who went out of his way to stop at a resident’s driveway to shovel the loose rocks kicked up by his snowplow. “I don’t think he needed to do that, but it was part of taking care of a problem so it didn’t escalate up the line.” Most common jobs in local government

Local government as economic player

Being an employer in rural Maine instills responsibility to the region, says Jack Clukey, the town manager in Dover-Foxcroft, which employs about 25 people, perhaps twice that in the summer. Many incentive programs are run by the state “but there are some things we can do,” he said, noting Dover-Foxcroft’s development of a business park about 10 years ago. Hiring is not an easy process, he said.

“Historically, we have not been able to compensate employees doing comparable jobs as other communities,” Clukey said. “There are challenges when you are an employer in an area that is not as economically vibrant as another area. It’s difficult to be competitive. If jobs are tight, we get a lot of applicants, but you always want to be able to attract people with experience and training. It becomes a challenge.

As a significant employer, it’s not surprising that local government is a stabilizing factor in local economies. This is particularly so in rural Maine, where it is not unusual for rural school districts to receive 80 percent of their funding from the state government’s “share-the-wealth” education funding formula, said Colgan. “The school funding formula is bringing into the community a lot more money than what is generated by the property tax. That’s as important as a paper mill or military base,” he says. Local government supports employment not just through hiring, but in contracts for all kinds of goods and services from snowplowing and road construction to office paper and fuel oil. Median hourly wage rates in selected occupations

In the last decade, local government employment in Maine has actually grown due to two factors: the expansion of state aid to education and the housing boom that expanded the tax base in many communities, Colgan said.

Local government is not as stabilizing a factor in employment as it could be, according to Kit St. John, executive director of the left-leaning Maine Center for Economic Policy. He notes that local governments across Maine – because they do not engage in deficit spending – have responded to the current recession by laying off employees and curbing spending. The cumulative effect of all this retrenchment tends to offset attempts to stimulate the economy through deficit spending at the federal level, he says. “It can completely mitigate the effects of the stimulus.” It’s one reason that President Obama has directed so much of the American Recovery and Reinvestment Act spending to propping up local government. According to Colgan, Obama’s stimulus bill has cushioned the recession’s effect on local government in two ways: through the State Fiscal Stabilization Fund, which directly lessened the magnitude of teacher layoffs, and additional Medicaid funding, which helped avert deep state cuts to education. But those programs will be ending after next year, notes Colgan.

“I’m not sure how many town managers understand how funding at state level is going to affect town budgets,” said Colgan.

In spite of its economic significance, local government tends to get overlooked by people concerned with economic policy. Colgan surmises that this is because local governments don’t “incentive-ize” economic activity. That is, they tend to borrow lightly, run balanced budgets and award few if any grants.

But there is one incentive that local governments are turning to with increasing frequency – tax increment financing (TIF) – a growing, though still under-appreciated economic development tool. In the past decade, the value of Tax Increment Financing tax breaks has tripled – from $18.6 million in 1999 to $55.4 million in 2008, according to Dave Ledew, director of the property tax division at Maine Revenue Services. This is property tax money that would ordinarily go into the general fund to support an expansion of services or to lower the overall tax commitment. Awarding a TIF earmarks money for specific purposes: usually a percentage of TIF money goes back to the expanding companies and a percentage goes into municipal infrastructure and economic development projects. The growth of TIFs now dwarfs the $13 million in CDBG grants awarded every year by Maine’s Department of Economic and Community Development.

“Certainly TIFs are the source of the most significant economic development spending statewide,” notes Kit St. John. “It’s odd to think of it this way because it’s foregone tax revenue, but a tax break is the equivalent of a grant.”

Nowhere is this more on than in Washington County, where county commissioners are sitting on a TIF windfall thanks to wind power development on Stetson Mountain. Ordinarily, the construction of 38 wind turbines would have expanded the tax base and lowered the tax bills of all the sparsely settled residents of the Unorganized Territory, who are already among the most lightly taxed residents of the state. Instead, county commissioners “TIF-ed” the development, shunting the $9.4 in new property tax money into two accounts – $5.6 million going back to First Wind and $3.8 million to county government to be spent on economic development, a sum of money that county commissioners have never seen before, according to county commission chairman Chris Gardner. “It is kind of new,” said Gardner. What makes the opportunity even more unusual is that, according to law, this money may not be spent within the boundaries of the organized towns and cities, but must be spent on economic development somewhere in the woods, blueberry barrens and bogs of the Unorganized Territory. Needless to say, county commissioners are both delighted with their opportunity and eager to get the law changed to allow the TIF money to be spent anywhere in Washington County, says Gardner. “We want to look at it holistically to benefit the entire county,” he said.

Wherever it’s spent, the purpose will be to create jobs.

Local government employees are a diverse, dispersed, and generally low-visibility group. But consider this: a layoff of 10 percent of the employees in local government (6,100 people) would have a greater impact on the state’s economy than a simultaneous implosion of the fishing, forestry, agriculture and hunting economies combined (5,345 people).

Now, who’s your quintessential Maine worker?

Lee Burnett is a freelance writer from Sanford, leeburnett_maine@hotmail.com