TY  - JOUR
AU  - Inman,Robert P.
AU  - Albright,David J.
TI  - Central Policies for Local Debt:  The Case of Teacher Pensions
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2166
PY  - 1987
Y2  - 1987
UR  - http://www.nber.org/papers/w2166
L1  - http://www.nber.org/papers/w2166.pdf
N1  - Author contact info:
Robert P. Inman
Department of Finance
Wharton School
University of Pennsylvania
Philadelphia, PA  19104-6367
Tel: 215/898-8299
Fax: 215/898-6200
E-Mail: inman@wharton.upenn.edu
AB  - The recent debt crises in New York City and Cleveland, the deterioration of public infra-structures in certain of our states and larger cities, and the occasional bankruptcy of smaller pension plans suggest that not all of local finance stands on a sound fiscal base. This paper examines the trends in funding for one form of state and local government debt--teacher pensions underfundings -- and asks what a central government might do to check any unwanted growth in these liabilities. The analysis concludes (i) that this form of state-local debt is sizeable and growing, (ii) that state and local governments have an implicit pay-as-you-go bias in pension financing which encourages the growth of debt, but (iii) central government benefit and funding regulations or debt relief policies can slow, or even reverse, that growth.
ER  -