The MassINC Policy Center generates research to frame pressing issues, identify actionable solutions, and monitor progress. The Center favors a ground-up approach, engaging with state and local officials and civic leaders to surface problems and actionable strategies to address them. We strive to produce unbiased information that leaders can rely on when tasked with making difficult choices.
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Reckoning with Historic Unfunded Municipal Pension Obligations
This report examines the historical decisions that contributed to these unfunded liabilities and highlights how current taxpayers are paying more than their fair share.
March 25, 2025
Key Takeaways
- As of 2023, recent generations of Massachusetts taxpayers paid an estimated $22 billion more than their fair share to cover local pension obligations left by prior generations, yet these local plans still have an estimated $8 billion in unfunded liabilities.
- Current taxpayers face additional costs because most of the pension funds are managed by local boards that have underperformed the state pension fund by more than $5.4 billion since the 1980s.
- Geographic disparities associated with uneven changes in population since the late 1970s have exacerbated this burden for residents of some communities, including many Gateway Cities.
- This pattern means lower-income residents and people of color shoulder an inequitable share of legacy pension costs. Since the 1980s, Gateway City residents have paid billions more than their own generation’s fair share to cover local pension costs, with more than $5 billion in appropriations made for legacy pension costs since 2010.
Latest Updates
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Gateway Cities Journal: Abundance and Scarcity in Gateway Cities
As cities like Lawrence continue to grapple with the challenges of housing affordability, the importance of naturally occurring affordable housing has never been clearer — and neither has the urgent need for innovative solutions.
May 1, 2025
Gateway Cities
The Gateway Cities Innovation Institute works to unlock the economic potential of small to mid-size regional cities.
Leveraging MassINC’s research, polling, and policy team, the Institute strengthens connections across communities and helps Gateway City leaders develop and advance a shared policy agenda.
