Washington, DC – Public pensions are seriously underfunded in some states, and the situation is not helped by the fact that states continue to give huge tax breaks and other subsidies to corporations. Such subsidies often exceed the amount a state owes to maintain its pension obligations.
Those are the main findings of a six-state report issued today by Good Jobs First, a non-profit, non-partisan research center focusing on economic development accountability. “Putting State Pension Costs in Context” features five states (with seven more coming) where public-employee pensions are currently being debated.
The report found that $3 billion was spent on corporate subsidies and tax breaks in Arizona, Connecticut, Kansas, Kentucky, Oklahoma, and Wyoming during FY 2018. About two-thirds of that amount would have covered the states’ pension system contributions. For each of the five states, the amount spent on corporate subsidies exceeded the employer pension obligations that year. In Oklahoma, for example, the pension cost was $293 million, while the various corporate subsidies and tax breaks totaled almost three times that amount.
With proposals underway to eliminate pensions and switch workers to defined contribution plans (akin to 401Ks), the retirement security for millions of state public employees – including first responders and teachers – is at stake. This report shows that curbing corporate welfare can make a substantial difference in relieving the pressure on state budgets.
If you would like more information on the report or would like to speak to Bridget Early, the executive director of the National Public Pension Coalition or Greg LeRoy of Good Jobs First, you can reach Andrew Collier at [email protected].