[U]nless state and local government plans for their employees’ pensions are reined in, households will face state and local tax increases of almost $1,400 per year forever.
NBER Working Paper highlight:
In twelve states, the necessary immediate increase is more than $1,500 per household per year, and in five states it is at least $2,000 per household per year. A key feature of this analysis is that it accounts for the cost of new DB [defined benefit] accruals, for both current and future workers, not just the cost of unfunded legacy liabilities. Decomposing the results into these two components reveals that 49% of the increased contributions would be required to pay only the present value of new service accruals.
HT: David Henderson.