As Texas booms, local governments — especially in small towns

A cascade of issues including inflation and growing distrust in government aren’t helping local governments hire for critical positions in public safety and utilities. 

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ZAVALLA — Earl Norrod thought he was finished working when he retired from the city of Lufkin water department 10 years ago.

But amid a nationwide labor shortage — and a particular dearth of qualified government workers in small towns — the 76-year-old has been in and out of employment.

Since 2018, Norrod has been tapped three times to help the nearby small town of Zavalla with its water system. The working-class community of fewer than 700 people struggles with aging water infrastructure and lacks the budget and skilled workforce to fix it. Last year, the problems intensified after water line breaks and system failures left residents without potable drinking water for nearly 10 days — and a boil-water notice during the Thanksgiving holiday. Adding to the disaster: Two well workers and the city’s public works director resigned during the debacle.

Norrod, content in retirement at the time, stepped up.

“I’m just trying to help them get back on their feet,” Norrod said. “I don’t want a full-time job. I don’t even want a full-time temporary job.”

Across the country, a labor shortage following the COVID-19 pandemic has left employers scrambling to fill vacant positions. Local governments have been disproportionately impacted.

First, governments lost more jobs than the private sector during the shutdown. Local governments’ labor loss was18 times greater than other industries’, according to a report by the National League of Cities. Between March 2020 and March 2022, municipal employment fell by 300,300 jobs, the report found.

Now in places like Texas, which has largely rebounded from the pandemic, municipalities continue to face staffing shortages. More than 6,000 local government jobs remain vacant, according to an estimate from the Texas Workforce Commission. A general distrust of the government and an inability to offer competitive wages to recruit top talent have made some positions especially difficult to fill, city and county leaders say. Even large urban centers like the city of Austin that can pay more face higher-than-normal vacancy rates — with 16% of city jobs vacant as of mid-January. To help staff up, Austin recently launched its largest-ever hiring campaign.

Labor shortages render critical government services, including water distribution and trash pickup, difficult to execute. In small cities like Zavalla, the impacts of staffing challenges have been particularly devastating.

“Labor shortages are more pronounced in smaller cities and rural areas,” said Pia Orrenius, a labor economist and vice president at the Federal Reserve Bank of Dallas. “Smaller cities have such a hard time hiring because a lot of the younger people who grow up there and go to college may eventually leave and go for higher-paying jobs in the big city.”

“No one wants to work for a sinking ship”

After spending 15 years working on oil and gas pipelines across Texas, Thomas Bailey was ready to return home to Zavalla. He grew up in the East Texas town and spent his high school summers working for the city helping clean out their water tanks.

Now, he’s fixing those same tanks as the city’s newest public works director.

“The city needs my help, and I miss my home,” Bailey said. “That’s the only reason why I’m here. To help out.”

Bailey, who resides in Zavalla, is the fourth public works director the town has seen in the past five years. His predecessor left the position in November after working 22-hour days following the disastrous water crisis last year. Those who were in the role before him also left for other jobs, according to multiple city employees.

“No one wants to work for a sinking ship,” Bailey said.

Bailey does not have the water license necessary to operate the town’s well — a unique system called a GUI well that features multiple shallow wells as opposed to a single deep well — and he’ll spend the next year working toward that license.

In the meantime, Norrod continues to work for the city as a contract laborer, lending the town his license to work under and helping Bailey and other city employees obtain their licenses.

East Texas towns like Zavalla have always struggled to fill jobs, especially those with particular licensing requirements that generally need a higher level of education, said Keith Wright, Angelina County judge and a former Lufkin city engineer. Eighteen percent of residents in Angelina County have bachelor’s degrees, compared with 32% of Texas residents over the age of 25.

Small towns typically hire workers as a base level and then educate them to the point where they can obtain their licenses. Zavalla is taking this strategy, hiring local resident Cody Day to work under Bailey and work toward a wastewater license. But obtaining a water license is not always easy. According to the Texas Commission on Environmental Quality, only 17% of people who took the test in 2022 to obtain the highest-level water operator license passed it.

“After those exams, you really feel like you’ve been tested,” said Norrod, who purposefully retained his license after going into retirement. “I worked too hard for those licenses to let them expire.”

The public utilities positions are not the only roles Zavalla has struggled to fill. Finances are a primary obstacle for the town. The longest- serving City Hall employee started less than a year ago. At the Zavalla Police Department, one of the three officers left for higher pay at the county sheriff’s office.

“We can only pay so much,” said Carlos Guzman, the former town mayor. “We can’t pay top salaries, and that can hinder us.”

To complicate matters, the city has experienced significant turnover among its elected officials. Last month, Guzman announced his resignation. Guzman had suffered a stroke the previous month and decided to move to Beaumont to be closer to family. The day before, the mayor pro tem resigned. And the city secretary also announced her retirement.

“They can’t raise their wages”

Zavalla’s workforce challenges are not unique. Across the state, government officials are struggling to attract and retain workers. A combination of factors — including an aging workforce, inflation and a decline in government trust — are contributing to the crisis.

Amid historic levels of inflation, many small governments can’t afford to raise salaries the same way the private sector can, making it difficult to incentivize new workers.

“People in the public-sector jobs are seeing their real incomes erode because these entities are constrained by tax revenue,” Orrenius said. “They can’t raise their wages in real time like the private-sector companies are doing to prevent turnover.”

And when critical jobs are unfilled, cities are forced to cut back on the services they offer. In Austin, for example, the city temporarily halted bulk trash collection and reduced the hours of the public library when it had significant staff shortages last year. In Zavalla, high turnover and vacant office jobs mean less room to apply for grant funding — something the town critically needs in order to address its crumbling infrastructure.

During last year’s budget season, government entities across Texas pushed to offer wage increases without raising tax rates. Austin, for example, increased wages by 4%, its largest wage increase over two decades. In Angelina County, salaries increased for sheriffs and for positions in the district attorneys’ offices.

School districts in some cases have shifted to a four-day week, in part to help retain teachers at a time when teachers are hard to come by.

Even if higher wages can attract workers, small governments ultimately cannot compete with the private sector. In small towns with limited budgets, retaining law enforcement officers and jail staff is particularly challenging. Once employees gain experience and training, they often move on to higher-paid agencies funded by entities with a larger tax base.

Public jobs have long been thought of as offering strong benefit packages, but some cities have had to cut those in the face of budget shortfalls. In East Texas’ Jasper County, for example, employees used to receive a subsidy for family coverage of health insurance. The budget no longer allows for that.

“The coverage used to attract stable people who wouldn’t job hop,” said Jasper County Judge Mark Allen. “But the costs have gotten worse every year.”

And local leaders say that those benefits are not useful in attracting younger employees.

“When you’re 25 years old and you think you’re bulletproof, those insurance and health benefits just don’t register with you,” said Polk County Judge Sydney Murphy. The county raised salaries by 10% this year for all county employees in order to increase its competitiveness.

For Allen, one of the biggest changes in the past decade that has contributed to hiring challenges has nothing to do with the budget, though.

He said a rise in attacks on government officials has made the jobs less attractive.

“At one time, the general public perceived government employees as contributing to the common good and as wanting to see their community grow,” Allen said. “But with social media, you’re seeing people attacking people in government service. If you’re in the private sector, you’re not going to have those issues.”