Posted on 07/25/2007 7:02:35 PM PDT by neverdem
In 1994, New Jersey decided to stop setting aside money in a fund to pay for health care for its retired public workers. The savings paved the way for a big tax cut.
Meanwhile, hundreds of thousands of public workers were being told that as long as they worked 25 years, the system would provide virtually free health care for them when they retired, often when they were as young as 55.
No one added up the cost — until now.
It turns out that New Jersey will need about $58 billion, in today’s dollars, to provide all the care it has promised its current and future retirees. That’s nearly twice the state budget and nearly twice the amount of its outstanding debt. And because of the step it took in 1994, the state has virtually no money in reserve to cover those costs.
In addition, New Jersey’s towns and other local governments owe about $10 billion for health care for their own retirees.
Many other states have been promising retiree health care without keeping track of the cost. They, too, are tallying what they owe, to comply with a new accounting rule that applies to all state and local governments. The numbers tend to be big, but so far, New Jersey’s obligation, which the state planned to announce tomorrow, appears to be the biggest.
“This is a very pressing situation that can’t go on much longer without being repaired,” said Clifford A. Goldman, New Jersey’s treasurer from 1976 to 1982.
Some governments are responding to the problem by setting aside money in trust funds for retiree health care. Though this requires cash upfront, the investment gains over the years can greatly reduce the cost, said Don Rueckert Jr., a senior vice president at Aon, a national insurance and consulting...
(Excerpt) Read more at nytimes.com ...
;)
Blame Chris Witless.
Must be because they don’t pay enough taxes in New Jersey.
I see no reason why former "employees" of the State of New Jersey shouldn't share in my Dad's experience.
Raise taxes to 100% : )
Guess where the money will come from?
Alabama, Alaska, Arizona, Arkansas, California...
Must blame Christy Whitless!
Bingo Rino to the extreme!
http://en.wikipedia.org/wiki/Christine_Todd_Whitman#Governor_of_New_Jersey
Even more reason why we need a Universal National Health Plan!
(Dem Talking Point....)
It’s coming and there is nothing that can be done to stop it.
That includes heart transplants and every gold plated aspect of lavish health care.
retired public workers = unions
I stongly support Universal National Health Plan... for retired union workers... and paid for by current union workers.
Hey NJ... watch your purces/wallets... they’re soon going to be much lighter.
What? Medicare is not good enough for the parasites? s/
I think they said they can get $10-15 billion for the New Jersey Turnpike, then the Garden State Parkway is probably worth another $4 billion or so.
Maybe Dubai would be interested in buying the Port of Newark....
Jon Corzine walked away with millions taking Goldman Sachs public! With some creativity he could make billions selling the state!
“The savings paved the way for a big tax cut.”
How about a Robert C. Byrd building instead?
This is one of the reasons I moved from NJ after being a lifelong resident.
Aside from brain dead Democrat voters, high property taxes, a completely out of control education establishment, and a hopelessly corrupt state government.
I saw this one coming a mile off, and have warned my friends still in NJ to get out now.
The combined costs of state, county, local government and teacher pensions and health care costs are more than the State of NJ can generate.
A Chrysler type bailout is coming. You heard it here first.
And NJ will not even say thank you.
Lots of legislators should be in prison, all across the country. NJ isn't alone in unfunded retirement plans etc. I live in IL and the state is BILLIONS behind in funding plans at every level. Again, no one will be called to account.
Yeah. That’s it. Blame Whitmann. After Florio raised taxes 3 billion, Whitmann cut 1 billion. Surely that adds up to 50 some odd billion in ten years.
nyt is attempting to blame the tax cuts for not being able to pay for it
Its not just NJ. The whole country has overpromised on entitlements. Now that the Baby Boomers are actually starting to get old and (gasp!) retire, the illusion of financial health can’t be sustained much longer.
The idiots who think we can grow our way out of this through illegal immigration ignore the fact that those people take more in services than they provide in taxes on their low wage jobs (those of them that even pay taxes, that is).
It will be quite the reckoning. I am a military retiree and they have been cutting back on our health benefits for years (we had the promise of “free” health care too). Honestly, I would be surprised if I am still collecting my pension 15+ years from now in its current form.
One way Government can weasel its way out of this mess it to start lying about key economic metrics. Like claiming the inflation rate is only 3% when its more like 10%. This makes it easier to deal with COLAs and is a de-facto reduction in benefits. In fact, I think they’re doing that now.
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