Public Sector Pensions

Research

Delaware's Public Employees' Retirement System: A Complete and Transparent Accounting Eileen Norcross \| Feb 05, 2013 The sustainability of public sector pension plans is an issue of great fiscal concern for state and local governments in the United States. According to government reports, state public sector pension plans confront a total unfunded liability of $842 billion. Underfunding of this magnitude presents a serious fiscal problem for individual governments and will require a growing amount of budgetary resources to fund benefit promises to retired workers.	The Fiscal Health of the States Jeffrey Miron, Robert Sarvis \| Feb 13, 2012 This paper examines the fiscal health of the states, focusing on two worrisome characteristics: an understatement of unfunded pension liabilities and ever-increasing expenditures, driven primarily by health care costs.
Rhode Island's Local Pension Debts Eileen Norcross, Benjamin J. VanMetre \| Nov 08, 2011 This working paper shows how Rhode Island’s state and municipal pension systems face large and growing unfunded pension liabilities and provides recommendations for reform.	Accounting for the Cost of a Public Sector Worker in New Jersey Eileen Norcross, Roman Hardgrave \| Sep 28, 2011 This study focuses on public sector benefits costs in the state of New Jersey. Along with several other states, New Jersey’s pension system is badly underfunded and health care and other benefits for public sector workers are entirely unfunded.
From Defined Benefit to Defined Contribution Scott Beaulier \| Sep 26, 2011 This paper explores the current state of public pensions across the United States and addresses transition cost and capital flight concerns.	The Fiscal Health of U.S. States Jeffrey Miron \| Aug 15, 2011 This paper examines the fiscal health of the U.S. states by taking a look at state and local debt, including unfunded pension liabilities.

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Testimony & Comments

State and Municipal Debt: The Coming Crisis?

Eileen Norcross | Feb 09, 2011

Eileen Norcross testified before the U.S. House Committee on Oversight and Government Reform on the looming municipal debt crisis.

Speeches & Presentations

Pensions in Peril: How Municipalities Are Defusing This Fiscal Time Bomb

Eileen Norcross | Oct 25, 2012

Cities across the United States are facing $7 trillion in outstanding pension liabilities. This conference, part of the Anton/Lippitt Conference on Urban Affairs at Brown University, shed light on how municipalities are addressing this financial challenge.

Expert Commentary

Californians Stifled By Lack of Freedoms San Diego Union-Tribune By William Ruger, Jason Sorens \| Apr 08, 2013 If you’re finding it harder and harder to live in California, you’re not alone.	Freedom and Prosperity: Some Comparative Historical Reflections on State Policies and Performance Pileus By Jason Sorens \| Apr 08, 2013 States like California and New York are living off the accumulated capital of past economic freedom. Now that the political tide has turned decisively against economic freedom in those states, they are shedding people and jobs and growing more slowly than the rest of the country. Places like the Dakotas, Carolinas, Oklahoma, and Texas, which have reversed their anti-market policies of the past, represent America’s dynamic economic future.
Study of States Shows Freedom Works Best Washington Examiner By Veronique de Rugy \| Apr 05, 2013 People follow jobs, and jobs follow freedom. That's one of the main results from the third and much improved edition of the Mercatus Center's "Freedom in the Fifty States: Index of Personal and Economic Freedom."	States Limiting Freedom Pushes People Out USA Today By William Ruger, Jason Sorens \| Mar 28, 2013 Google's auto-complete feature has long been a source of amusement, but as a recent feature on BuzzFeed makes clear, it also says a lot about what it's like to live and work in different states in the country.
Interest Rate Swaps Gamble Taxpayer Dollars U.S. News and World Report By Eileen Norcross \| Aug 14, 2012 Several high-profile municipal bankruptcies have drawn attention to the rising tab for public worker benefits, due to undervalued and underfunded pension plans. But some of the biggest recent fiscal emergencies, which have swallowed up the financial resources of Jefferson County, Ala. and now threaten Baltimore and scores of other local and state governments, have another cause: the use of the "too-good-to-be-true" debt instrument—otherwise known as the interest rate swap.	Scott Walker, Chris Christie Deal With State Budget Realities By Eileen Norcross \| Jun 12, 2012 State and local budgets across the nation have a basic accounting problem. The cost of employee benefits is rising fast relative to current revenues. And worse yet, the tab to fund pensions is steeper than government accounts recognize.

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Charts

Total State Expenditures by Funding Source

As this chart by Mercatus Research Fellow Matthew Mitchell demonstrates, over time, states have increasingly come to rely less on general fund sources and more on federal sources, dedicated sources, and borrowed sources.

Experts

Eileen Norcross

Eileen Norcross is a senior research fellow at the Mercatus Center at George Mason University. Her primary research interests include fiscal federalism and institutions, state and local governments, and economic development.

Emily Washington

Emily Washington is a Policy Research Manager for the Mercatus Center at George Mason University. She manages the Spending and Budget Initiative and State and Local Policy Project portfolios.

Videos

Veronique de Rugy and Will Ruger Discuss Freedom in the 50 States on Stossel

Veronique de Rugy, William Ruger | May 03, 2013

Freedom in the 50 States 2013

William Ruger, Jason Sorens | March 28, 2013

Podcasts

Jason Sorens Discusses Freedom in Virginia on Virginia Public Radio

Jason Sorens | April 23, 2013

Jason Sorens Discusses Freedom in Virginia on Virginia Public Radio based on the 2013 edition of Freedom in the 50 States.

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Recent Events

State Budget Basics

Mercatus Center budget scholars will share their academic research and practical knowledge with local thought leaders in a half-day seminar hosted by the Bluegrass Institute in Lexington, Kentucky.

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Media Clippings

VA: Gutsy Lawmakers Could Change State Law to Publish Public Pensions

Eileen No

Delaware's Public Employees' Retirement System: A Complete and Transparent Accounting Eileen Norcross \| Feb 05, 2013 The sustainability of public sector pension plans is an issue of great fiscal concern for state and local governments in the United States. According to government reports, state public sector pension plans confront a total unfunded liability of $842 billion. Underfunding of this magnitude presents a serious fiscal problem for individual governments and will require a growing amount of budgetary resources to fund benefit promises to retired workers.	The Fiscal Health of the States Jeffrey Miron, Robert Sarvis \| Feb 13, 2012 This paper examines the fiscal health of the states, focusing on two worrisome characteristics: an understatement of unfunded pension liabilities and ever-increasing expenditures, driven primarily by health care costs.
Rhode Island's Local Pension Debts Eileen Norcross, Benjamin J. VanMetre \| Nov 08, 2011 This working paper shows how Rhode Island’s state and municipal pension systems face large and growing unfunded pension liabilities and provides recommendations for reform.	Accounting for the Cost of a Public Sector Worker in New Jersey Eileen Norcross, Roman Hardgrave \| Sep 28, 2011 This study focuses on public sector benefits costs in the state of New Jersey. Along with several other states, New Jersey’s pension system is badly underfunded and health care and other benefits for public sector workers are entirely unfunded.
From Defined Benefit to Defined Contribution Scott Beaulier \| Sep 26, 2011 This paper explores the current state of public pensions across the United States and addresses transition cost and capital flight concerns.	The Fiscal Health of U.S. States Jeffrey Miron \| Aug 15, 2011 This paper examines the fiscal health of the U.S. states by taking a look at state and local debt, including unfunded pension liabilities.

Californians Stifled By Lack of Freedoms San Diego Union-Tribune By William Ruger, Jason Sorens \| Apr 08, 2013 If you’re finding it harder and harder to live in California, you’re not alone.	Freedom and Prosperity: Some Comparative Historical Reflections on State Policies and Performance Pileus By Jason Sorens \| Apr 08, 2013 States like California and New York are living off the accumulated capital of past economic freedom. Now that the political tide has turned decisively against economic freedom in those states, they are shedding people and jobs and growing more slowly than the rest of the country. Places like the Dakotas, Carolinas, Oklahoma, and Texas, which have reversed their anti-market policies of the past, represent America’s dynamic economic future.
Study of States Shows Freedom Works Best Washington Examiner By Veronique de Rugy \| Apr 05, 2013 People follow jobs, and jobs follow freedom. That's one of the main results from the third and much improved edition of the Mercatus Center's "Freedom in the Fifty States: Index of Personal and Economic Freedom."	States Limiting Freedom Pushes People Out USA Today By William Ruger, Jason Sorens \| Mar 28, 2013 Google's auto-complete feature has long been a source of amusement, but as a recent feature on BuzzFeed makes clear, it also says a lot about what it's like to live and work in different states in the country.
Interest Rate Swaps Gamble Taxpayer Dollars U.S. News and World Report By Eileen Norcross \| Aug 14, 2012 Several high-profile municipal bankruptcies have drawn attention to the rising tab for public worker benefits, due to undervalued and underfunded pension plans. But some of the biggest recent fiscal emergencies, which have swallowed up the financial resources of Jefferson County, Ala. and now threaten Baltimore and scores of other local and state governments, have another cause: the use of the "too-good-to-be-true" debt instrument—otherwise known as the interest rate swap.	Scott Walker, Chris Christie Deal With State Budget Realities By Eileen Norcross \| Jun 12, 2012 State and local budgets across the nation have a basic accounting problem. The cost of employee benefits is rising fast relative to current revenues. And worse yet, the tab to fund pensions is steeper than government accounts recognize.