Retiree Health Costs at Issue in Sacramento County

Sacramento County's vote last week to cut medical and dental subsidies for future retirees will not help ease the county's looming $33 million budget deficit for the 2007-2008 fiscal year, the Sacramento Bee reports (Fletcher, Sacramento Bee, 5/19).

The decision by county supervisors last week will affect 12,800 current employees. Continuing health benefits for those employees next year would have cost $13.57 million, according to officials.

The vote was made in the wake of new federal accounting rules that require public agencies to disclose unfunded health care and pension liabilities for current and future retirees (California Healthline, 5/18). However, supervisors voted to maintain funding for current retirees, meaning that the county on an annual basis will vote on whether to continue funding.

To help reduce the projected $33 million budget deficit for next fiscal year, supervisors on Wednesday voted to adopt an 11-point plan that includes:

• No longer funding vacant positions;
  
• Increasing user fees when possible; and
• Tapping into the county's reserves and trust funds.

"For the first time, Sacramento County's Board of Supervisors has taken a step toward resolving the long-standing budget problem caused by its health benefit for retirees," a Bee editorial states. "This debate is far from over," however, because "supervisors must revisit the issue every year," the editorial states. "But at least there is a recognition of shared sacrifice for a county facing a lot of red ink," the editorial concludes (Sacramento Bee, 5/21).