New Study Highlights Explosion in Local Governments’ Pension Costs

Between 2007 and 2016, median pension costs for cities and counties in California increased $7,022 per worker — six times as much as the rest of the country — according to new research by UC Berkeley associate professor of public policy Sarah Anzia.

“This dataset is unlike any that existed before, and it is uniquely suited to the task of assessing the on-the-ground experiences of American cities and counties,” Anzia said of her research, which analyzed pension spending across 442 local governments including 26 in California.

“It stands to affect everyone who relies on local government service provision, including police and fire protection, refuse collection, public parks, libraries, and county court systems,” wrote Anzia. “Rising pension expenditures are already changing the landscape of local government, and the findings here suggest that the future of local government may look very different than the past.”

Rising pension costs are eating through California’s city and county budgets. According to the study, they consumed an additional 2% of general revenues over the 10-year period. Nationwide, that figure was 0.7%.

Anzia also found a positive relationship between pension cost growth and strong organized labor movements.

Read the entire study here, plus this summary from the Sacramento Bee


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