The rate of expansion and the breadth of COVID‐19 caught the world by surprise. From the perspective of nonprofit and public entities responsible for service provision, this pandemic is also unprecedented. The authors offer a RISE framework for navigating the fiscal effects of COVID‐19 and rely on recent surveys to assess the response strategies of local governments and nonprofit organizations. They find that many nonprofits were hit fastest and hardest by the pandemic and that local governments are, essentially, trying to figure out their financial condition moving into the next budget cycle.

An aging workforce and increasing retirement benefits are ongoing problems for states and municipalities. Unions are often blamed for governments offering too generous pension benefits. This contributes to budgetary pressures in some state and municipal governments. This article analyzes the impact of collective bargaining on pension benefit generosity under different economic conditions. The study finds that the impact of collective bargaining on pension benefits is not consistent over time or across pension plans. Collective bargaining has a positive effect on pension benefits under worsening economic conditions. Additionally, unions indirectly influence pension benefit generosity through campaign donations and unionization intensity. The findings suggest mixed impacts of collective bargaining on different groups of public employees regarding pension contributions. The article concludes with implications for the role of unions in public financial performance and strategic human resource management during fiscal austerity. Evidence for Practice• An aging workforce and increasing retirement benefits are among the most critical issues facing state and local governments; this article considers the implications of those factors for the role of unions in pension financing and workforce planning. • As pension benefits are now codified in state laws and statutes, collective bargaining no longer significantly influences pension benefits and pension reform decisions. However, state economic growth, the political and legal environment, and union campaign contribution laws create a difference in the level of pension benefits between collective bargaining and non-collective-bargaining states. • The impact of unions on pension generosity varies depending on economic conditions: when the economy slows down, public employees in states that allow collective bargaining for salaries and benefits generally have more generous pension packages, and those benefits are better protected. • Union campaign contribution laws increase pension benefit generosity for all public employees in collective bargaining states. Unionization intensity raises pension benefits for police in collective bargaining states. • Collective bargaining does not significantly influence the pension reform decision to change pension contributions. Legal and political factors, state fiscal health, and unfunded pension liabilities are determinants of pension reforms.

Over the past decade, many states have reformed their retirement systems by reducing benefit generosity, tightening retirement provisions, introducing non-defined-benefit (DB) plan options and even replacing DB plans with defined-contribution plans. Many of these reforms have affected post-employment benefits that public workers will receive when they retire. Have these reforms also affected the attractiveness of public sector employment? To answer this question, we use state-level data from 2002 to 2015 and examine the relationship between state pension reforms and public employee turnover following the reforms. We find that employee responsiveness to the reforms was tangible and that it differed by reform type and worker education. These results are important because the design of public retirement benefits will continue to influence the ability of the public sector to recruit and retain high-quality workforce.

One important aspect of public finance is understanding expenditure allocations among competing purposes. Applying the public choice paradigm and fiscal illusion framework, this study explores the interplay between current state expenditures and financial needs, and long‐term financial responsibility to pension funds. Using state finance and pension data during 2004–2018, we found actuarially determined employer contributions paid by a state are inversely related to budgetary fund balances, total reserve fund balances, and state expenditures. Especially when governments are fiscally stressed, state officials appear to delay pension contributions while prioritizing operational spending. Interestingly, more stringent TELs and technical BBRs are effective at promoting prudent pension fund management. The study contributes to the public finance literature by providing empirical evidence to advance the argument that government's financing choices can affect the level of public expenditure while demonstrating the mechanism of the relationship between fiscal illusion and government budgetary decisions.

Fiscal competition literature emphasizes the need to consider fiscal implications of the flow of labor and capital across jurisdictional boundaries. This open‐economy consideration raises issues for the analysis of fiscal policies, ranging from taxation and expenditure policies to the structure of intergovernmental relations and interjurisdictional competition. Using data on state population movement and pension reforms (2002−2015), this study examines whether the adoption of pension reforms was motivated by state government competition for the mobile tax base. The findings suggest that interstate migration has an influence on states’ enactment of pension reform, and the effect differs by state population density.