Retiree Health Benefits for Public Workers Too Generous
A recent report estimating that state and local governments face an unfunded liability of $118.1 billion over the next three decades to cover retiree health costs "probably understates the price tag," a Modesto Bee editorial states.
The report, released last week by the Public Employee Post-Employment Benefits Commission, "assumes health care costs will rise only 4% a year," according to the editorial. However, "health costs lately have risen at a much steeper rate."
"Like the commission, the nonpartisan Legislative Analyst's Office has called on state and local governments to prefund retiree health benefits, an obvious and prudent reform," the editorial states.
However, the commission "should have been" ordered to also issue order reductions to the levels of coverage for retirees, which are "excessive" in California, according to the editorial.
"Driven by politically powerful public employee unions, the state, local governments, schools and special districts have larded up their benefits packages to levels that are unsustainable," the editorial states.
Lawmakers have "been asked time and again" to "address a growing retiree cost crisis -- demand sacrifice from powerful public employee unions to protect government budgets, the public and taxpayers," the editorial states, concluding, "One day, perhaps that plea won't be ignored" (Modesto Bee, 1/14).