Large public sector layoffs are unusual, and usually come with a delay. Today's losses are directly related to the pandemic and social distancing.

1. COVID and State and
Local Government
Examining the impacts COVID is having and expected
to have on state and local governments
Oregon Office of Economic Analysis
October 2020

2. Oregon Office of
Economic Analysis
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Normally revenues more volatile than economy. Today less so and
much of decline in chart due to filing deadline moved from April to
July. Overall tax revenues holding up better than expected.

3. Oregon Office of
Economic Analysis
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Public sector is usually a stabilizing force,
with delayed recession impacts

4. Oregon Office of
Economic Analysis
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Deep Local Cuts… …To Education and Non-Ed Alike
But today is different. Why?

5. Oregon Office of
Economic Analysis
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• We’ll come back to education (note: in
Oregon, universities are local, not state gov’t)
• The sharpest percentage declines are in
Leisure and Hospitality
• Public sector runs zoos, auditoriums, community
centers, public pools, convention centers, and the
like. Social distancing impacts these considerably.
• Tribal employment impacted by gaming
(gambling), subject to social distancing
• Libraries impacted by social distancing
• Public administration and other are down the
least, and the declines are about ¼ the size of
the overall employment decline in Oregon (-
11.5%), more inline with traditional impacts
and expectations
Local governments do a lot of things
directly impacted by the pandemic

6. Oregon Office of
Economic Analysis
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Occupation Level Percent
Archivists, Curators, and Museum Technicians 906 20.0%
Education, Training, and Library Workers, nec 8,821 15.4%
Elementary and Middle School Teachers -348,208 -17.3%
Librarians -34,531 -33.7%
Library Technicians -1,550 -9.9%
Other Teachers and Instructors 399 0.7%
Postsecondary Teachers -26,944 -29.1%
Preschool and Kindergarten Teachers -27,835 -20.0%
Secondary School Teachers 11,663 2.2%
Special Education Teachers 21,498 10.8%
Teacher Assistants -17,203 -3.7%
TOTAL -412,983 -11.3%
Source: IPUMS-CPS, Oregon Office of Economic Analysis
COVID Hits U.S. Educators
Sep '19 - Sep '20
Education declines are teachers
Note: There is always a big seasonal factor for education-related industries and occupations. To the extent some schools opened later than usual, these declines may lessen in the
October data, and/or the data will be revised. That said, the decline in teachers happened primarily in April and May, when schools largely switched from in-person to online.

7. Oregon Office of
Economic Analysis
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Possible Reasons for Declines
• Usually budget cuts, but not enough time
yet for this impact today
• Normal attrition and/or teachers not
wanting to deal with pandemic and districts
holding vacancies open
• Enrollment declines
• Anecdotally, local district enrollments are down,
a couple by ~5%
• Rise in pure online, and home schooling or
redshirting, particularly among potential
Kindergartners
• Minimal use of substitutes seems to be the
key factor
• Subs rarely used with distance learning
• Districts indicate no full-time teacher layoffs (yet)
• Possible that the entire decline in teachers could
be lack of using substitutes
The large, immediate decline in teaching positions is
very unusual and likely not due to traditional budget cuts

8. Oregon Office of
Economic Analysis
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Also applies to higher education
(based on informal conversations with local institutions)
• Enrollments seem to be down 10-20% in Oregon
• Official counts for reports will take place later in October
• Usually higher education is a haven during recessions, however not this time due to
online learning
• That said some Oregon community colleges still doing career and technical courses but
socially distanced (10-12 students per class instead of 20-30)
• Layoffs to permanent, full-time positions minimal
• Goes for classified and certified staff alike
• Declines in use of adjunct instructors and professors
• Layoffs primarily in student workers, dorms, rec centers, student unions, etc
• Higher ed impacts result of pandemic and social distancing

9. Oregon Office of
Economic Analysis
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School closures have bigger economic
impact in terms of workforce needs
11%
For more: https://oregoneconomicanalysis.com/2020/08/27/covid-challenges-working-oregon-parents-graphic-of-the-week/

10. Oregon Office of
Economic Analysis
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Inequities in access to technology
For more: https://oregoneconomicanalysis.com/2020/07/24/kids-with-internet-inequitable-access-to-technology-table-of-the-week/

11. Oregon Office of
Economic Analysis
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In CPS, the decline in employment among female college grads results in higher unemployment, yes, but also an increase in those dropping out of labor force. Responses
indicate the reason is not about childcare or family responsibilities, but about not being able to find work, or there are no jobs available in their area of expertise. This
points more toward lack of substitute use being an issue, more than childcare preventing moms from returning to work.
Decline in teaching positions impacts
topline economic numbers too

12. Oregon Office of
Economic Analysis
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Oregon’s General Fund Outlook
Current revenues much better than expected,
some tied to strong 2019 income tax returns,
but recessionary impact will hit next year
Major Local Revenue Sources
• Sales Taxes
• Largely back as consumer spending remains
strong, particularly due to spending on goods vs
services, although considerable local variation
• Property Taxes
• Residential values up, risk is ability to pay.
Nonresidential values at risk in next couple of
years, ability to pay a risk this year if businesses
(tenants) close
• Transient Taxes
• Down, considerable local variation, won’t come
back until the pandemic is over
• Vice Revenues
• All largely up, or at least doing better than
expected. We are self-medicating through the
pandemic.
Like economy overall, government today impacted by pandemic and
social distancing but the underlying traditional recessionary dynamic is
still there, hit will be next fiscal year, not current

13. Oregon Office of
Economic Analysis
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Federal relief supports income Nature of recession
Why are revenues better?

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Economic Analysis
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Some Destinations Fare Better
than Others
Bend is probably among the strongest in nation…
Are Downtowns in Big Cities More at
Risk due to WFH & Social Distancing?
Local impacts all over the place
…City of Portland lodging taxes -81% year-over-year in August

15. Oregon Office of
Economic Analysis
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Residential
Even as home prices slow in the future, values not expected
to decline. Short-term risk is household and landlord’s
ability to pay taxes.
Nonresidential
Mixed property tax impacts
0
100
200
300
400
500
600
700
1990 1995 2000 2005 2010 2015 2020 2025 2030
Oregon Home Price Forecast
FHFA Purchase Only Index, 1991=100
Source:FHFA,Oregon Officeof Economic Analysis
Oregon Home Price Forecast
FHFA Purchase Only Index, 1991=100
Source:FHFA,Oregon Officeof Economic Analysis
Impact of social distancing, business closures, and firms inability
to pay rent could impact ability to pay property taxes this year.
Future valuations (and future taxes) are at risk if vacancies rise
considerably, lowering rents and property values.

16. Oregon Office of
Economic Analysis
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Summary
• Large declines in public sector employment are rather unusual and
tend to come with a delay due to budget cycles
• Immediate losses today tied directly to the pandemic and closing of
public and community facilities, and not using substitute teachers
• Properly managing the pandemic will solve a lot of problems, local
government included
• Traditional recessionary dynamic is still here
• Permanent layoffs will likely come next fiscal year depending on the state of
the pandemic and economy and how that translates into public revenues

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Economic Analysis
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Contact
www.OregonEconomicAnalysis.com
@OR_EconAnalysis
joshua.lehner@oregon.gov
(971) 209-5929