In an October 18 working paper, economists Joshua Rauh of Northwestern and Robert Novy-Marx of Rochester calculate the unfunded liabilities the state pension plans at about $3 trillion. They suggest various proposals for reducing benefits, but even if all were implemented there would still be a fiscal hole of at least $1.5 trillion that taxpayers will have to pay.
In an October 11 study, economists Alicia Munnell, Jean-Pierre Aubry, and Laura Quinby examined state and local government pension plans. They find that such plans are not in as bad a shape, financially, as commonly believed.
On October 9, the California Law Review posted an article by University of California law professor David Gamage on the volatility of state revenues and what can be done about it.
On October 7, the Milken Institute and the Kauffman Foundation released a report showing that cutting services and raising taxes will be insufficient to stabilize state and local government finances unless health and pension costs for retirees are also scaled-back.
An October 6 report from the National League of Cities details the continuing deterioration of city finances as declining property values feed through into lower property tax revenues.
Also on October 6, the California Center for Public Policy published a study of public employee compensation and pensions in the state, arguing that they are much too high.
On September 30, the Cato Institute released the latest edition of its annual report on state fiscal policies.
On September 28, the Tax Foundation published new data on property taxes paid by homeowners. The counties with the heaviest property taxes were all in New York or New Jersey.
On September 27, the Census Bureau released new data on state and local government tax collections. They continue to show very slow growth. Center on Budget and Policy Priorities economist Nicholas Johnson offered an analysis the same day.
A September 7 study from the Mercatus Center examined the long-term impact of federal aid to state and local governments. While the money may appear to be free, the federal aid tends to eventually run out, thus forcing states to raise taxes to keep programs running.
On August 31, the Census Bureau released data on state and local government employees. In 2009, there were 12.2 million at the local level and 4.4 million at the state level. The largest category of employment was education.
On August 30, the Rockefeller Institute released new data on state tax collections. It shows that revenues are rebounding strongly after collapsing last year due to the recession.
I last posted items on this topic on August 26.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Read his most recent column here. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).