By State Controller John Chiang in the Sacramento Bee | A few numbers to remember: 1.9, 72, 24, 92, 25, 67 and 121. No, they are not related to last week’s lotto, nor are they the residual carnage of a Sudoku factory meltdown. But they are important numbers to remember as Gov. Jerry Brown and lawmakers prepare to tackle a fiscal liability that rivals or surpasses the size of its more high-profile cousins – the state’s unfunded pension liabilities. If left unaddressed, it will sow the seeds of a future budgetary crisis.
The state of California, like many governments, provides health care to its retirees. What the state does not have, regrettably, is a fiscally prudent plan for how to fund these benefits in a manner that minimizes costs for taxpayers and the civic workforce that serves them.
Instead, we pay the minimum amount due each year, or $1.9 billion. This is just enough to cover the state’s portion of annual premiums. As with only making the minimum payment on your credit cards while continuing to recklessly charge away, the shortcoming of this approach is that the debt will keep growing and, eventually, crowd out the household’s ability to pay for other vital needs.
My latest analysis reveals that the price tag for providing retiree health care to our existing state workers as well as current retirees is nearly $72 billion. In the past eight years, the number has ballooned by a stunning $24 billion – $7.2 billion in the last year, alone.
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