Ethan Pollack, a senior policy analyst at the Economic Policy Institute, said it’s “tough to say” how fiscal cliff negotiations could affect state employees. “You’re talking about two slightly different areas of the budget,” he told MSNBC.
“Usually, operations is funded internally by the state, and a lot of the stuff that the federal government provides is more for specific activities,” Pollack said.
This means, for example, that budget cuts resulting from the fiscal cliff negotiations could have an impact on a state’s bridge-building project, but not on whether the state would be hiring new bus drivers to transport people along that highway.
On the other hand, said Pollack, budget cuts to specific federally-funded projects would likely have an indirect impact on other parts of state budgets. “Money is fungible, and the more you try to crimp state budgets, the more [state governments] try to go for the low-hanging fruit, politically.”
“Unfortunately, that tends to be public employees,” said Pollack.