California Taking Action on Retiree Health Care Costs
Unlike Connecticut and Texas, California is moving forward with plans to comply with new accounting rules that require states and public agencies to disclose the long-term cost of health care and other retirement benefits, Daniel Weintraub writes in his Sacramento Bee column.
The Texas comptroller argues that the state does not have a long-term liability for retiree benefits because it does not have public unions or contracts, according to Weintraub. The comptroller maintains that the state can drop retiree benefits at any point because the Texas Legislature approves such benefits in its budget process, Weintraub writes.
In Connecticut, the Legislature is considering legislation to permit the comptroller to disregard the Government Accounting Standards Board rule, according to Weintraub. The Connecticut comptroller maintains that complying with the rule could spur resistance from lawmakers and the public and raise additional obstacles to addressing the situation, Weintraub writes.
Meanwhile, California Controller John Chiang (D) hired an actuary to assess the state's obligations a year before the compliance deadline, and Gov. Arnold Schwarzenegger (R) and legislative leaders have appointed a commission to study the issue and propose strategies for meeting the state's obligations, Weintraub writes.
In addition, CalPERS has established an investment fund that state and local governments can use to help fund retiree benefits, according to Weintraub.
Weintraub writes that "California is at least not in complete denial," adding, "And that's better than some other places are doing" (Weintraub, Sacramento Bee, 6/12).