A new research paper by finance professors Joshua Rauh and Robert Novy-Marx paints a sobering picture of the taxes required to fully fund state and municipal governments’ pension requirements over the next 30 years.The researches found that if current laws and practices remain in effect, taxes on the average household would have to increase by $1,398 annually in order for states and municipalities to keep pace with their obligations. According to the report, 13 states would need to increase taxes by $1,500 per household per year.
New Jersey is in the worst shape — residents would need to pony up $2,475 per year to meet the state’s $11.9 billion obligation, with California having the largest unfunded liability of $47.8 billion, of which it only has $19.5 billion in the bank.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.