WASHINGTON - State and local governments have continued to add workers to municipal payrolls over the last two years despite tough economic times, according to recent figures from the U.S. Bureau of Labor Statistics.

Municipalities over all have remained secure places of employment while many firms in the private sector are shedding jobs, the bureau's statistics show. The rise in municipal jobs runs counter to widespread press reports and statements by state and local officials that layoffs in the government sector have added to the economic slowdown.

"The most important point is that fears that state and local governments were going to be a big drag on the economy were exaggerated." said Steve D. Gold, director of the Center for the Study of the States in Albany, N.Y. "People got a mistaken impression of the magnitude of the cutbacks from the rhetoric that came out."

According to the Labor statistics, municipal employment edged higher in the two-year period starting in June 1990, when the recession began. As of June 1992, state employment totaled 4.38 million, up 1.6% from 4.31 million. During the same period, the number of jobs in local government increased 2.9%, to 11.23 million from 10.91 million.

The rise in the number of municipal jobs is small compared with the 1980s, when the economy boomed and increasing tax receipts led many state and local governments to add to their payrolls. And, said Mr. Gold, some localities that were hit hard by the recession did in fact cut back on government positions.

But, he added, those cutbacks were more than made up by increased hiring in areas that had continued population growth and in some Midwestern and Southwestern states that generally avoided the recession.

Mr. Gold calculated that between 1991 and 1992, employment decreased in 20 states, including the big industrial states of California, Connecticut, Illinois, Michigan, New York, and Pennsylvania. In Pennsylvania alone, the state implemented an early retirement program for 8000 workers. On the other hand, states such as Texas. Hawaii, Idaho, and Alabama made fairly hefty gains in state employment.

Mr. Gold attributed some of the reports about cutbacks to political hype from state and local government officials seeking to convey a message of fiscal austerity to voters. In many cases, he said, the announced job cuts were of unfilled positions, and in other cases officials simply transferred jobs to accounts not paid for out of general funds.

For example, in New York, officials said 117 of 531 workers in the Division of Equalization and Assessment were transferred to a separate budget authority funded by real estate transfer fees.

Assessing the situation as a whole, researchers at the Center for the Study of the States warned that state and local governments can expect to face continued demand for more schools and prison facilities that require additional public employees.

The U.S. National Center for Education Statistics has projected public school enrollments will grow by 13% between 1990 and 2000, with the largest increases at the high school level.

That estimate is based on relatively high population projections and robust economic growth that may not be realized, said Mr. Gold. Still, he cautioned in a recent research paper. "The fact of rising enrollments is something that most states can count on."

In terms of state prisons, the researchers found that while the average prison term for felons has declined in recent years, the numbers of people sentenced for drug and other offenses is up sharply. The result has been a growing number of corrections employees paid for out of municipal coffers.

"The future does not promise any relief," said Sarah Ritchie, a researcher at the center, in a brief research paper. She identified 47 out of 50 states that are under some federal court order to upgrade their prison systems. And, she added, even higher rates of incarceration are projected over the next several years.

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