Stateline Story

State Hiring Freezes Not So Tough

  • June 06, 2002
  • By Jason White

Often announced with much bluster, state hiring freezes are designed to control government spending by placing strict limits on the hiring of new employees. But in practice, most hiring freezes are not as tough as they sound.

"Our experience with hiring freezes is they get announced with a lot of fanfare. Then quickly, people who have to make government run everyday realize they're going to have to make some exceptions to them," said Ann Kempski, associate director of public policy for the Association of Federal, State, County and Municipal Employees, a major public employees union.

These exceptions typically include an allowance for the hiring of workers to fill "essential" positions, such as public health and safety jobs.

The problem, as far as the bottom-line is concerned, is that these exceptions can become the rule. When they do, state hiring continues relatively unchecked.

Such is the case in North Carolina, a state with some of the worst budget problems in the country.

Weeks after assuming office in January 2001, North Carolina Gov. Mike Easley announced a hiring freeze in the face of an estimated $790 million deficit.

"The action we are taking today gives us certain and predictable security to deal with this problem with the maximum flexibility possible. This will balance the budget even given a worst-case scenario," Easley said at the time.

As the fiscal year rolled along and the state's worst-case scenario got even worse, one thing changed little the state's hiring practices.

In the first half of 2001, state managers hired almost as many employees as they did the same period the year before, a year with no hiring freeze in place.

From January 2000 through June 2000, North Carolina hired 7,923 new workers, according to the state Department of Administration.

Over the same six months in 2001, with a hiring freeze in place, North Carolina hired 6,899 new employees, a decline of just 13 percent.

On the heels of even more bad revenue news in early May and sensing that his earlier freeze did little to chill state hiring, Easley ordered a new and improved freeze.

"Within the past month, we've taken an additional step a directive to cease all purchases, all travel, all hiring through the end of the fiscal year, with the exception of public safety and health. The budget director has also okayed teacher hires," said Easley's spokesperson, Fred Hartman.

It remains to be seen whether this more frozen freeze is able to rein in spending better than previous measures.

Analysts say states like North Carolina struggle to limit hiring, even during freezes, because they need to maintain basic functions of government, such as administering healthcare, educating students and even providing speedy service at the Department of Motor Vehicles.

"In any state government, there are critical needs to maintain a certain level of services," said Arturo Perez, fiscal analyst at the National Conference of State Legislatures, a nonpartisan group representing state legislators.

"Maybe it's not necessary for you to have ten tellers. Maybe you could have five. But then your lines would be twice as long," he said.

But the failure of hiring freezes to put an absolute chill on state hiring does not mean they have no value.

Perez says they can be helpful stopgap measures, often employed at the first sign of fiscal trouble and effective when combined with other policies.

"It was not long into the downturn when state governors announced hiring freezes to try to get through to the end of the fiscal year on a balanced note," said Perez.

"A hiring freeze alone will not balance your state budget. But it is one component of what it takes to balance a budget," he said.

They can also be effective public relations tools, even if they aren't always the most effective public policy.

"Clearly it's an important symbolic tightening of the belt,' said AFSCME's Kempski.

So far this year, at least sixteen states California, Colorado, Delaware, Hawaii, Indiana, Kentucky, Louisiana, Maryland, Minnesota, Nevada, New Hampshire, North Carolina, Ohio, Oregon, Rhode Island, Washington have implemented hiring freezes, according to NCSL and other sources.

At least two states Alaska and New Jersey have already scheduled them for next year.