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.
America’s fiscal mess, coupled with poor management in the past and changing demographics, guarantees that public pension systems across the country will be reformed. At the margin, the case for more radical shifts from defined benefit to defined contribution plans is strong.
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.
This paper seeks to examine a relationship between the share of citizens who pay taxes, taxpayers, and those who receive federally funded benefits, tax spenders, or what we ordinarily think of as tax beneficiaries.