Tuesday, August 18, 2009

Recession Reality: U.S. Cities, States Close for Days

Across the country city and state offices are showing signs of the recession. Mandatory half days, furlough Fridays in California, and other unpaid workdays, are just some of the tactics being used by local governments to save money. Check out the following article courtesy of Reuters.com explaining how cities all over the US are making cuts to survive the recession.

Frank Giannola drove nearly 40 miles from Lockport, Illinois, to downtown Chicago on Monday, only to find city hall shuttered for the day.

"This is the city that works?" he asked, mockingly referring to a Chicago motto.

The subcontractor, who had taken the day off to obtain a sewer permit, joined a steady stream of residents, contractors and business people who came by car, taxi and on foot at midday looking for city services.

They were greeted with a sign that city hall was closed for "a reduced service day" -- the first of three days this year Chicago will curtail services such as garbage pick-up, libraries and health clinics -- but not public safety -- to save $8.3 million.

The savings is small compared with the $300 million revenue shortfall Chicago expects in its fiscal 2009 budget as the economic recession dramatically slows key tax generators.

"Every dollar we save from these measures helps to save jobs, and in the long term, maintain services for Chicagoans," Mayor Richard Daley said in a statement last week announcing the closures.

For residents in Chicago and many other cities, counties and states, unpaid furlough days are becoming a reality of the recession. Services normally expected to be available may not be accessible on certain days. Or lines for services may get longer if workers can choose the days they are furloughed.

For the governments, it is a sign of how desperate they have become to reduce spending to combat shrinking revenue.

"It's turned into a very wide-spread tactic for dealing with shortfalls this year," said Ron Snell, director of state services at the National Conference of State Legislatures.

With states facing projected cumulative budget shortfalls topping $348 billion from 2008 through 2012, at least 12 have turned to furloughs to save money, according to the legislative group.

A deal enacted late last month to erase California's massive $24 billion budget deficit included three furlough days a month for state workers to save $820 million.

Michigan, which has sprung numerous budget holes due to the ailing automotive industry, has scheduled six days on which it won't pay about 37,400 employees to save $21.7 million by September 30.

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