Last week we wrote about the new Pensionomics report from the National Institute on Retirement Security (NIRS). The report examines how public pensions benefit the national economy by supporting local jobs and stimulating economic activity. The Pensionomics report also contains a lot of helpful information about the impact of public pensions in each of the fifty states. Today we’re going to dig a little deeper into some of this state-level data.
NIRS finds that public pensions have a powerful effect on the national economy. In 2016, the spending of pension benefits generated $1.2 trillion in total economic output, supporting some 7.5 million jobs across the U.S. This spending resulted in $202.6 billion in federal, state, and local tax revenue, a finding that mirrors other studies of public pension plans as revenue generators.
At the state level, public pensions have the same strong economic impact they do on the national level. The numbers vary from state to state and generally states with larger and more diverse economies show the strongest effects from public pension spending. California, for example, the state with the largest economy, saw 443,966 jobs supported by public pension spending and more than $73 billion in economic output attributable to pensions.
Some of the other state-level findings include:
- Texas had the largest pension expenditure multiplier with 1.83. This means that for every dollar paid out in pension benefits in Texas, it supports $1.83 in economic activity.
- South Dakota had the largest taxpayer investment factor with a whopping 12.26. This means that for every dollar invested by South Dakota taxpayers in public pensions, that dollar ultimately supports $12.26 in economic activity in the state.
- California, Florida, Illinois, New York, Ohio, Pennsylvania, and Texas all saw more than 100,000 jobs supported by public pension spending.
- Kentucky, where the General Assembly is once again studying public pensions, saw more than 37,000 jobs supported by public pensions and more than $5 billion in economic activity attributable to public pensions.
You can find Pensionomics data for each state by clicking on the state on this map. This latest report is just more evidence that public pensions are powerful economic engines. This fact needs to be acknowledged by state legislators before they enact harmful changes to public pension plans.
