Education and health care make up more than half of statewide spending and Dayton is increasingly reliant on jobs in these fields that could be at risk as the state looks to trim an $8 billion budget deficit next year.

More than one-third of all jobs in the Dayton area fall into the categories sometimes referred to as “Eds, Meds and Feds” meaning hospitals, schools and government-related work, according to data by the U.S. Department of Labor.

The driving force behind this reliance is losses in other areas, such as manufacturing, instead of large increases in the number of taxpayer-funded workers. Economic and development experts say these fields are typically safe for workers in the long-term and that it is too early to tell how the next budget cycle will impact local jobs.

But with increased concern over federal deficits and government spending drawing anger from voters, the region’s growing reliance concerns some closest to these industries.

Health reform is a concern

Health care has by far the biggest reach locally. It had a $6.7 billion economic impact in 2008, according to the Greater Dayton Area Hospital Association. That’s more than the $4.4 billion created by Wright-Patterson Air Force, which is the region’s largest single employer.

Brian Bucklew, president of the hospital group, said hospitals get half their revenue from taxpayers through Medicare and Medicaid payments. Budget deficits and the changes coming from the health care reform bill have created a “huge concern” in the industry.

The region’s hospital chains are “in good financial positions” and continue to invest in the community. Bucklew believes they will thrive, but relying on them as the top employers is not healthy for the region in the long run.

“It is not sustainable,” Bucklew said. “For us to be at the top of the list, long-term is not a great position for the region to be in.”

Educators are bracing for cuts

Education spending comes in a close second, making up nearly a third of the state budget. Locally, schools, colleges and universities have been at the center of efforts to reshape the local economy. They are retraining the workforce with an emphasis on science and technology.

Enrollments are growing and college’s are holding down tuition costs, but that could change if state subsidies are slashed. The current education budget relies heavily on one-time federal stimulus money and local school districts and colleges are bracing for cuts. How big they will be is still unknown.

If cuts come to education it could again increase the cost to students and reliance on property taxes, said Sean Creighton, executive director of the Southwest Ohio Council for Higher Education and a Yellow Springs school board member. “I think there is recognition that schools are not going to be funded at the same levels,” Creighton said. “We need to preserve what we have. There needs to be a larger conversation around how to make the hard choices and if local communities bare more of the responsibility.”

The value of government work is often a hard sell, even in good times. “I think we have always had a hard road,” said Thomas Ritchie Sr., of the American Federation of State, County and Municipal Employees. “We don’t sell a commodity. We sell a service. We service the public.”

Ritchie’s union is the largest local in Ohio with more than 7,000 members working under 39 different contracts – doing everything from clearing snow to treating drinking water.

Base could spur development

Wright-Patterson Air Force Base may be the most insulated from the ebb and flow of government spending, although there has been talk of being more efficient with defense dollars.

Many are counting on the government-financed work at the base to spur private economic development in the Dayton area. The region expects an influx of jobs as the Base Realignment and Closure process continues.

Jim Leftwich, head of the Dayton Development Coalition, a regional advocate focused on the base, said Wright-Patterson’s growing diversity of work should be good for the region long-term.

“There is uniqueness to the missions at Wright-Patterson that serves it well,” Leftwich said. “It gives us a strong base to grow talent. There are so many diverse parts to Wright-Patterson. It allows us to grow a diverse footprint.”

Both the development coalition and the area’s congressional representatives stay mindful of moves, such as the one made by Alabama just weeks ago, to draw jobs away from the base.

Despite the reliance on taxpayer money, local economic experts say jobs in “Meds, Eds and Feds,” are typically stable long-term while also vulnerable to tax collections and government spending.

Robert Premus, a Wright State University economics professor, said there must be private sector jobs to support them. And cuts should be done carefully. “If they are done abruptly, without much thought, it could precipitate another downturn in the economy,” he said.