Eight Ways Cities Reduce Employee Costs: National League Of Cities

09/28/2011 11:00 am ET | Updated Nov 28, 2011
  • Harry Bradford Associate Editor, HuffPost Business and HuffPost Small Business

When city officials need to trim personnel costs, firing people isn't the first thing they look to do: it's the third.

City budgets are stretched increasingly thin as they try to fix crumbling infrastructure and pay for worker pensions with dwindling property tax revenue, and officials often cut personnel spending to cope, according to a recent survey of finance officers from 272 American cities by the National League of Cities.

Counties in the most trouble like Rhode Island's bankrupt Central Falls wiped out entire categories of employees, but cutting personnel budgets doesn't necessarily mean laying off workers.

Finance officers can freeze hiring, reduce benefits, enforce early retirement or cut compensation. And in fact, city officials often choose these options before laying off workers.

Earlier this summer in Houston, Mayor Annise Parker decided not to lay off police officers and firefighters and closed eight swimming pools, seven community centers and eliminated the city's youth sports leagues instead. In Lancaster Ohio, city officials spared six firefighters from being laid off by using funds leftover from the town's 2005 income tax increase, according to the Lancaster Eagle Gazette.

But city officials aren't the only ones looking for a way to cope with budget woes. Congress is considering cuts to the U.S. Postal Service that could include mass layoffs. According to Fredric Rolando, president of the National Association of Letter Carriers, however, the agency could avoid many of the job cuts by getting rid of a law that requires pre-funding for healthcare benefit programs. Postmaster General Patrick Donahoe has called for 200,000 job cuts, even though 100,000 postal workers lost their jobs through attrition in the past few years.

Since 2008, local government has lost 550,000 jobs, according to the Bureau of Labor Statistics.

Here are 8 ways cities reduce personnel-related spending, according to the National League of Cities:

8 ways cities cut personnel costs