Skip to comments.CA: Controller: State faces up to ~$48 billion bill on health benefits (over next 30 years)
Posted on 05/07/2007 7:25:40 PM PDT by NormsRevenge
California may have to come up with an extra $47.9 billion over the next 30 years to cover health and dental benefits for its retirees and current state employees, Controller John Chiang said Monday.
But Chiang said the state could cut that bill to about $31.3 billion if it dropped its pay-as-you-go approach, invested about $1 billion a year to help cover future retiree health costs and used the earnings to ease the impact on the state budget.
"Our actuarial report shows that, annually, if we continue on the pay-as-you-go basis, we will accrue a liability of $3.59 billion a year," Chiang said in remarks prepared for a speech to the Sacramento Press Club. "But if we fully pre-fund and put that money into a trust fund, we'll only need $2.59 billion a year (from the budget) to cover this liability."
The state has been paying less than $1.4 billion a year for health benefits, raising the specter of a large unfunded liability in the future, Chiang said.
An order issued by the federal government in 2004 requires states to spell out how much they'll have to pay in non-pension retirement benefits.
Chiang said he was releasing his findings nearly two years before the federal deadline to give the state time to come up with a "responsible plan to honor our promises to state employees and protect future budgets."
"We cannot continue to defer these costs to the next generation of Californians," he added.
The pre-funding approach he recommends is the same one used by the state to pay pensions. He also said the state should look for ways to control its health-care costs.
State Finance Director Mike Genest said Gov. Arnold Schwarzenegger appointed a 12-member commission last year to propose ways to deal with state public pensions and retiree health benefits.
"As the governor has said, we have to find the best way to meet these obligations without harming other government programs and taxpayers or handing the problem off to future generations," Genest said.
What will the cost be when amnesty is declared?
What’s a few billion between friends, anyway?
Sounds like the socialist utopia health care program is more important than other functions of government. Why are we not surprised these folks are absolutely clueless about how much utopia costs nowadays?
A few weeks ago the National Center for Policy Analysis announced that by 2050, Medicare, Medicaid and the Social Security program would consume all federal revenues unless something changes.
These programs are fiscal insanity.
Meanwhile the SEIU are running commercials in the Capitol media market demanding more and more benefits and decrying health insurance company “profits”.
I knew Genest when he was a Republican. How about we go ahead and harm a few government programs, Mike. Let's see how well the state survives, sort of like we did with Proposition 13.
And without any real Republican Conservative lovin, either!!!
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
LMAO, "come up with"....HAHA!
Man, the politics business is the place to be... if you're a parasite and a scumbag.
Wow, what a scam.
My guess is when push comes to shove, if you're a taxpayer in Kalifornia bend over and grab your ankles.
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