State and Local Governments See 1.4 Million Job Losses During Pandemic Municipal governments laid off people at a record pace at the start of the pandemic, just like the private sector. But while private companies have been hiring in recent months, state and local governments have started to cut jobs again. Employment in that sector is still around its lowest since 2001. A decent amount of the cuts have been in education, economists say. And the stimulus bill passed by Congress last week included some aid for schools and transportation agencies. But it didn’t include grants to state or local governments. So while stimulus would help -- if it passes at all -- it isn’t clear that it will fill this widening employment gap.