Editorial: Rule for Reporting Retiree Benefit Costs Demands Responsibility
The "day of reckoning" is near for governments in California that have "lived in a blissful state of denial" about providing "free" retiree health care benefits without accounting for liabilities, a Los Angeles Daily News editorial states. New accounting rules set to take effect next year will require governments to report future retiree health costs, and "an honest accounting of what's been going on all these years is sure to shock us all," according to the Daily News.
"Realistically, there will be no easy way to cover the liability," the editorial states. Governments will have to either cut public services or raise taxes, or both. "There's little that can be done now to reduce the problem," the editorial states.
However, governments can keep the problem from escalating by "requiring that future public-employee contracts include terms more like those found in the private sector," according to the Daily News.
The editorial concludes, "It's time for the giveaways to end -- and fiscal responsibility to start" (Los Angeles Daily News, 12/21).