Report: Public Pensions Boost Government Revenues

By: Florida Chamber of Commerce

Study finds public pensions added $137.3 billion to state and local coffers in 2016.

According to a new study from the National Conference on Public Employee Retirement Systems (NCSPERS), public pension funds contributed $137.3 billion to state and local governments in 2016.

“Our findings are a powerful rebuke to the popular argument that taxpayers cannot afford public pensions,” Michael Kahn, NCPERS’s research director said in a release. “The evidence shows that if public pensions did not exist, taxpayers not only wouldn’t save money; they would have to cover a severe annual revenue shortfall.”

The study found that pensions are net contributors to revenue in 38 states. In the other 12 states, the report said pensions were either revenue neutral, or taxpayer contributions were greatly subsidized by state and local revenues generated by public pensions.

“Due to lack of research focusing on the economic impact of public pension assets, we have developed a new model and methodology,” said the report.

NCPERS said the purpose of the model is to estimate the economic impact, as measured by personal income, of pension assets, controlling for other variables such as investment in education, infrastructure spending, multifactor productivity, and income inequality.  The analysis used historical data from public sources, including the US Census Bureau, Bureau of Economic Analysis, and Bureau of Labor Statistics.

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