Dan Borenstein, who these days is a columnist at the Contra Costa Times, is a seasoned veteran when it comes to California politics and policy. He has penned an oustanding read today, that begins thusly:
You probably know someone who makes only the minimum credit card payment each month while continuing to charge more and more. Each month, the debt increases. Each month, it becomes harder and harder to make the minimum payment — and even harder to get out of hock.
Many of you are probably thinking this doesn’t apply to you. You’re more responsible than that. Well, think again.
A state commission Monday told us that we’re all in this together. Our elected leaders are using our public credit card to pay for government employees’ health care after they retire. As more of those workers reach retirement age and as medical costs soar, the debt will rapidly rise. Future generations — our children and grandchildren — will be stuck with the tab.
The 12-member commission, appointed by Gov. Arnold Schwarzenegger and the leaders of the Legislature, reported Monday that they had surveyed 1,200 state and local governments in California and found that they are on the hook for at least $118 billion for future retiree health care benefits. That’s $118 billion and growing.
The obligation for state workers accounts for $48 billion. Readers of this paper already know that Contra Costa County’s liability is at least $2.6 billion, and the West Contra Costa School District’s liability is $770 million.
All three have one thing in common: They do not "prefund." It’s like your friends (certainly not you, right?) who make the minimum payment on their credit cards. In this case, local governments are promising today’s workers health benefits in retirement, but the employers are only paying for retiree benefits for employees who have already stopped working. They’re not setting aside money in advance for future retirees.
I encourage you to read all of his column, which can be found here.