Earlier this week, the House Select Committee on Legacy Costs from the State Health Plan, Pensions and ESC met to review the fiscal condition of – among other things – the state’s unfunded liability for state health plan costs for state retirees.
I’ve written numerous times in the past on the subject, and how the latest actuarial report (as of Dec. 31, 2010) pegged the unfunded liability at roughly $33 billion. The liability basically represents the present value of already-earned benefits of present and future state retirees over the next 30 years.
According to a report by the General Assembly’s Fiscal Research Division, the liability is growing quickly, and will become a crushing burden on the state budget. The report projected the liability will grow to a stunning $50 billion by 2020. On a year-to-year basis, it costs the state about $900 million this year to pay for state health plan enrollment for state retirees. That annual cost is projected to exceed $1.5 billion per year mark by 2018.
This trend represents more and more taxpayer dollars going toward state retirees who are doing nothing, taking money away from other state priorities. Something has got to give – sooner rather than later.