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The issue of state and local government job cuts inflamed the presidential campaign last week. President Barack Obama on Friday urged Republicans in Congress to approve legislation he has proposed that would enable more teachers and police officers to keep their jobs. The president also asserted that the "private sector is doing fine," which drew quick, derisive criticism from Republicans. Mitt Romney, GOP presidential nominee, charged that Obama was "out of touch." Layoffs are slowing at the state level. State governments added an average of 3,000 jobs per month in the past six months, after cutting an average of 5,200 in the preceding six months. Still, the cuts aren't entirely over: states cut 5,000 jobs in May. The biggest layoffs have been at the local level, particularly in public schools. Local governments rely on property taxes, which are still declining as property values fall in the wake of the housing bust. Since August 2008, when state and local government employment peaked, local governments have cut 528,000 jobs. State governments have shed 134,000. Even as tax receipts at the state level have recovered, states are facing greater demand for services. That means budgets will remain tight and hiring isn't likely to pick up. Dan Crippen, executive director of the NGA, said high unemployment is forcing millions of people to join or remain on Medicaid, the joint federal-state health care program for the poor. That's placing big demands on states, which boosted Medicaid spending 20 percent this year.
"We're not seeing the rolls drop off as much as you might expect," Crippen said. And states expect to spend more on K-12 education next year, he added. Medicaid will cover 5.6 million more people this year than in 2008, according to the Center for Budget and Policy Priorities, a liberal research group. States will also have to educate 350,000 more K-12 students and 1.7 million college and university students, the center estimates.
[Associated
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