Unfunded Retiree Medical Benefit Liabilities
Original post made by Stacey on May 20, 2009
"An even bigger headache is a new requirement that state and local governments identify and quantify their obligations for providing health care to their retired employees. The state auditor's office and an advisory commission told the state two years ago that its unfunded liability for health care is $48 billion. "
PUSD has zero dollars devoted to this. That means when they have to start quantifying their obligation on the books, their credit rating could go down.
"The state auditor's office says in a new report that $4.71 billion would be needed in 2009-10 this year's unfunded deficit, next year's current costs and next year's share of the unfunded amount. It's like a high-interest credit card debt that continues to grow when a cardholder makes only minimum payments.
Those numbers don't count future health care costs for University of California or court system retirees, estimated at $13 billion. Nor do they include retirees from local school districts and local governments, another $58.7 billion. "
on May 20, 2009 at 2:22 pm
Wow, what an incredible mess! Time for all of us to WAKE UP and hold our elected representative accountable.
Puts a different spin on all those out there that gang up on a small group of fiscally conservative legislators that have tried for years to reign in taxing and spending.
on May 20, 2009 at 3:57 pm
I have been talking about this for some time. The only way out is to declare bankruptcy or redo these contracts similar to the way a lot of private companies have done. What is so sacred about public employees? They are supposed to serve the people and not be their masters. Their fringe benefits are several times those of private employees.
on May 20, 2009 at 7:27 pm
The government sector only can exist with taxes paid by the private sector. That's an absolute statement.
We have gotten so out of whack that there is now unsustainable total compensation packages being paid to government employees across the board (all sectors of government) while the private sector has sunk into deep recession from which recovery may be years away.
The correction in government is long overdue and now let the cutting begin, bankruptcies included. Our society, which is 80 percent private sector, simply has to ignore the threats made by our government representatives and accept the cuts of inefficient, excessive cost services that we can no longer afford.