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Pensions in the Trenches: How Pension Spending Is Affecting U.S. Local Government

November 10, 2020 // 0 Comments

By Sarah F. Anzia (University of California, Berkeley) | Local government budgets are in the spotlight. The COVID-19 economic downturn has decimated certain streams of local government revenue. Scrutiny of policing has raised attention to municipal expenditures. It might seem like public employee pensions are disconnected from all of this: they are usually discussed as a state-level issue, and one involving quantities like funding ratios, unfunded liabilities, and investment returns rather than spending. But the reality is that they are very much connected. Spending on public employees’ retirement benefits—including those of public safety employees—is an important part of local government budgets everywhere. And long before 2020, many experts were warning that pension costs were on the rise, forcing changes to how local governments operate. Read More