Putting State Pension Costs in Context: How They Compare to the Cost of Corporate Subsidies, Tax Breaks and Loopholes
Good Jobs First
Public pensions are under assault throughout the United States. Led to believe that retirement costs for government workers are out of control, governors and legislators in numerous states have been moving to cut benefits and tighten eligibility requirements.
While it is true that numerous public pension systems are underfunded because of past decisions by policymakers and because the financial crisis harmed the value of pension-plan investments, that does not necessarily mean that the costs of benefits are excessive.
In a series of short papers, Good Jobs First seeks to put current pension costs (known as employer normal costs) into comparative context. Focusing on 10 states where the pension cost controversy has been intense, we compare those costs to the amount of revenue those states lose each year as the result of economic development subsidies offered to corporations as well as the tax preferences and accounting loopholes (including offshore tax havens) used by companies.