Unfunded Liability For Retiree Health Care Grows



Share | |
(Sacramento, CA)
Thursday, March 6, 2014

It’s called the unfunded liability. From 2012 to 2013 it grew by $730 million.

That’s actually less than expected because there have been fewer health care claims and health care inflation was lower than expected.

But State Controller John Chiang says the state should stop covering only the minimum amount needed to fund health care costs as they are due.

Instead, some money should be set aside in a trust solely for future retiree benefits, just like a savings account.

“Get the benefit of some interest and you will grow your money, same thing for trying to take down the health care obligations for the state of California," says Chiang. "If you can’t make full payment, let’s make some payment and make the tax obligations that are going to be used in the future drop significantly.”

Chiang says the state could save more than $20 billion by pre-funding its obligation.
The legislature and Governor would have to approve the change.

Related Stories

  • Andrew Nixon, Capital Public Radio

    Brown Signs International Climate Agreement

    Tuesday, May 19, 2015

    Governor Jerry Brown is encouraging regional governments around the world to follow California’s lead on climate change. On Tuesday, he and international leaders signed an agreement to reduce carbon emissions.

  • Katie Orr, Capital Public Radio

    Brown Lauds California Community Colleges

    Monday, May 18, 2015

    Not everyone is happy with the revised budget proposed by California Governor Jerry Brown. But he does have the approval of the Community College system. Brown attended the Community College Board of Governors meeting today.

  • David Phillips, flickr

    Guide Helps Colleges Respond to Sexual Assaults

    Wednesday, May 13, 2015

    California colleges are getting some guidance on dealing with sexual assaults. By July, California colleges must immediately disclose reported sexual assaults to law enforcement.

  • capleez, flickr

    California Needs Volunteers To Test Road Charge

    Tuesday, May 05, 2015

    California depends on gas tax revenues to maintain its roads. But that revenue is declining. Now the state is looking for volunteers to try out a new funding method, but volunteering could cost you money.

We Get Support From:
Become a Supporter

We Get Support From:

Become a Supporter