A cut in the state budget will manifest itself in many ways, according to Mr. Grice–for example, fewer repairs for an aging infrastructure. “This combined with deferred maintenance will present challenges from their property exposures,” he warned.

In addition, “with reductions in the [public sector] work force, an increase in class sizes and an amalgamation of certain services, I believe we'll see a number of temporary and permanent closures of facilities, which again will increase the [property] risk,” he said, warning that vacant buildings mean more exposures–a big one being arson.

From a liability standpoint, he said deferred maintenance will bring more lawsuits for dangerous and defective conditions in schools and cities, counties and municipalities. He cited, for example, pavements that aren't repaired when they should be, which can result in slips, trips and falls. Such exposures could be exacerbated if budget cuts prompt a reduction in safety services on public property.

Layoffs of public workers could also prompt more suits for employment practices liability–such as wrongful termination involving discrimination, for example, he warned. “We also believe there will be more workers' comp claims filed before the layoffs take effect.”

And for those public entities with risk management departments, he noted, “this will be an area where they really have to fight for their funding.” Budget cuts may mean fewer personnel, with the result being that compliance and training suffer and safety inspections get reduced, he said.

“The mantra that's coming is that yet again, the schools and other public entities are going to have to do a lot more with less resources, like everyone else,” he said.

Overall, Mr. Grice observed, “it's a pretty grim picture.” He noted that from a market standpoint, the vast majority of entities are self-funded, so in terms of additional claims, “the money has to come from tax dollars.”

Participation in pools gives public entities an edge, because they have better buying power to acquire insurance, a greater spread of risk, and access to safety services.

Are public risk managers from small entities losing jobs to pools–which manage everything from purchasing, to claims to training? “I do see this happening some,” he said. “Pools are seen as a way to cut costs and then transfer the costs back to the pool.” He added that while some entities staff their pools, most contract for needed services.

Going forward, public risk managers will be “doing more with less, and this is a trend that will continue,” he predicted. “People will have to be better at allocating their resources, and the squeaky wheel will get the resources.”

Mr. Grice said his company is working on solutions to help clients save dollars–one being an interactive Web-based tool that allows schools and community colleges to do compliance and other trainings online.

The company also rents out safety professionals, so that those school districts or pools without a full-time risk manager can contract with a qualified expert to help them make sure loss control needs are being met.