Gauging the Burden of Public Pensions on Cities

Alicia H. MunnellJean-Pierre AubryJosh Hurwitz Mark Cafarelli

SLP#35

The brief’s key findings are:

  • Media stories suggest – especially since the bankruptcy of Detroit – that pensions are the major expense of American cities and could lead to widespread collapse.
  • A comprehensive measure of the cost burden considers how much city taxpayers pay for the pensions of city and county general government workers and teachers.
  • For a sample of 173 cities, these overall pension costs equal 7.9 percent of the total revenue base.
  • The cost burden ranges from 12.3 percent for the highest cost quintile to 2.7 percent for the lowest cost quintile.