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1 Benefits Neglected for Civil Retirees on Tue Feb 17, 2009 2:39 am

SSC


Admin
Benefits Neglected for Civil Retirees
States Could Be Forced to Raise Taxes or Cut Benefits to Meet Obligations
By DENNIS CAUCHON, USA TODAY
Feb. 16, 2009
www.abcnews.go.com

State and local governments have set aside virtually no money to pay $1 trillion or more in medical benefits for retired civil servants, a USA Today survey found.

With bills coming due as baby boomers start to retire, states, cities, school districts and other governments may be forced to raise taxes, cut benefits or both -- a task made especially difficult in an economic downturn.

State governments have unfunded obligations worth $445 billion to subsidize health insurance for teachers, judges and other civil servants after they retire, according to a USA Today survey of state financial reports.

Cities, school systems, park districts, water authorities and other local governments have even bigger obligations, in excess of $500 billion, although the exact number isn't known.

States will receive a large chunk of the $787 billion stimulus bill Congress approved last week, but that money is aimed at immediate spending, not long-term costs.

Medical benefits for retirees became common in the 1980s, sometimes in exchange for reduced pay raises.

"What seemed inexpensive will become a crippling cost for some governments in the future," said Kenneth Rust, finance chief for Portland, Ore.

These medical costs are part of a larger burden taxpayers face in providing health care for an aging population. The federal government has a $1.2 trillion unfunded obligation to pay medical costs for retired federal workers and military personnel. Medicare and Social Security push the nation's unfunded promises above $50 trillion.

States and big cities were required for the first time last year to report the value of medical benefits promised to current and future retirees. State and local governments employ 20 million. An additional 7 million are retired.

Unlike private companies, most governments subsidize health insurance for retired employees. Soaring medical costs have made the benefit valuable to workers, especially those who retire early, and costly to governments.

Dover, N.H., a town of 26,000, will see its retiree health care costs triple to $3 million annually in the next 10 years as the number of retirees grows, according to its actuary. What states are doing:

" Cutting health benefits. Most governments have the legal authority to reduce or end retiree health coverage -- unlike pensions, which cannot be cut under most states' laws. When Rhode Island trimmed retiree medical benefits in October, 1,291 workers -- 9 percent of the state's workforce -- retired to keep the more generous old health plan.

" Saving money. Alaska, Minnesota, Pennsylvania and Utah are among states that set aside some money last year to prepare for future medical costs.

2 Re: Benefits Neglected for Civil Retirees on Tue Feb 17, 2009 2:52 am

gypsy


Moderator
Don't you think taxpayers have always faced the burdens with a destroyed economy/government?

3 Re: Benefits Neglected for Civil Retirees on Tue Feb 17, 2009 3:57 am

SSC


Admin
zoommmmmmmmm..over your head again..you missed the whole point of the article. IF all states had been putting back money then this problem would not be an issue. This falls on the state as their responsibility..nothing you can blame Bush for again.

4 Re: Benefits Neglected for Civil Retirees on Tue Feb 17, 2009 10:26 pm

rosco 357


Veteran
i was a bit shocked at our governor, as u know senatorRichard Shelby and Jeff Sessions of Alabama are very conservative,and did not want the stimulus, i think they wanted one but not that one, but our republican governor Reilly, he was on the news and new papers pushing it, he said he was going to have to lay off over 4000 teachers,and combine classes if it did not pass, I'm posting this because i was surprised since Reilly is very conservative also. i imagine all state budgets are being hurt by lower amounts of money that is coming in due to the recession. i think california is on the brink, i have an article about california, heck i willl post it, lol, take care,

5 Re: Benefits Neglected for Civil Retirees on Tue Feb 17, 2009 10:33 pm

rosco 357


Veteran
Calif. budget stalemate sets up fiscal calamity

Feb 17, 4:58 PM (ET)

By DON THOMPSON

SACRAMENTO, Calif. (AP) - California lawmakers gathered again Tuesday in another bid to end the state's multibillion-dollar budget stalemate, as the state was poised to start laying off as many as 20,000 government workers.

After frustrating weekend sessions that failed to break the one-vote impasse preventing them from passing a budget compromise plan to end the crisis, legislative leaders said they planned to put the tax increases in the package up for a vote Tuesday.

In addition to the layoffs, the state planned to halt all remaining public works projects, which would throw nearly 92,000 construction workers out of work. Tax refunds already have been delayed because the state has no money to pay them.

"It is clear there is going to be catastrophic consequences for Californians if we don't get it done today," Senate President Pro Tem Darrell Steinberg told reporters Tuesday.


The Sacramento Democrat called a morning session of the Senate, where lawmakers have fallen one vote short of passing the enormous package of spending cuts, tax increases and borrowing.

The chamber recessed shortly after it convened to let the minority Republican members huddle privately to plan their strategy. Under California's two-thirds vote requirement to pass a budget, passage would require support from all Democrats and three Republicans in each house.

The Senate will remain in continuous session until it passes the budget plan, which is intended to close a $42 billion deficit through June 2010.

Steinberg had warned lawmakers Monday to bring their toothbrushes, saying they would not leave until that one additional vote was secured.

The Assembly had the votes to pass the package but was waiting for the Senate to act. Assembly Speaker Karen Bass urged state employees facing layoffs to call Republican senators and press them to vote for the budget.

"If we don't pass the budget, the situation is just going to get so much worse," the Los Angeles Democrat told reporters Tuesday. "One more Republican senator needs to do the right thing."

Like other states, California faces plunging tax revenue that has imperiled state services.

The compromise proposal put before lawmakers was negotiated by Gov. Arnold Schwarzenegger and the four legislative leaders - two from each party.

The plan includes $15.1 billion in program cuts, $14.4 billion in temporary tax increases and $11.4 billion in borrowing. The package also would send five ballot measures to voters in a special election to be held May 19.

The governor had delayed releasing layoff notices on Friday when it appeared lawmakers would pass the compromise plan.

But after the weekend sessions failed to produce the necessary votes, Schwarzenegger's spokesman said the administration had no choice. "In the absence of a budget, the governor must do everything he can to cut back on state spending," spokesman Aaron McLear said.

Despite the warnings of impending fiscal calamity, most rank-and-file Republicans have refused to agree to higher taxes. Republican lawmakers blamed Democrats for years of overspending.

"You're not going to go back to the people's pocketbooks to fuel that spending," said state Sen. Dennis Hollingsworth, R-Temecula.

During a lively floor session Monday night, state Sen. George Runner, R-Lancaster, defended his colleagues' stance against tax hikes and said his constituents were pleading with him to vote no on the budget proposal.

He accused Democrats, who hold majorities in both houses, of using the recession to drive an agenda of tax increases. "You want this emergency," Runner said, drawing jeers from Democrats.

Steinberg, the Senate president pro tem, acknowledged that tax increases were difficult for all lawmakers to swallow but said the Legislature has no choice.

"Nobody likes that idea, but remember the reason we are in this crisis is because we are in a national and international crisis," he said.
http://apnews.myway.com/article/20090217/D96DJ6101.html

6 Re: Benefits Neglected for Civil Retirees on Tue Feb 17, 2009 10:37 pm

gypsy


Moderator
gypsy wrote:Don't you think taxpayers have always faced the burdens with a destroyed economy/government?
no not over my head, didn't post about the post you made was just asking a question~

7 Re: Benefits Neglected for Civil Retirees on Tue Feb 17, 2009 10:42 pm

gypsy


Moderator
rosco 357 wrote:Calif. budget stalemate sets up fiscal calamity

Feb 17, 4:58 PM (ET)

By DON THOMPSON

SACRAMENTO, Calif. (AP) - California lawmakers gathered again Tuesday in another bid to end the state's multibillion-dollar budget stalemate, as the state was poised to start laying off as many as 20,000 government workers.

After frustrating weekend sessions that failed to break the one-vote impasse preventing them from passing a budget compromise plan to end the crisis, legislative leaders said they planned to put the tax increases in the package up for a vote Tuesday.

In addition to the layoffs, the state planned to halt all remaining public works projects, which would throw nearly 92,000 construction workers out of work. Tax refunds already have been delayed because the state has no money to pay them.

"It is clear there is going to be catastrophic consequences for Californians if we don't get it done today," Senate President Pro Tem Darrell Steinberg told reporters Tuesday.


The Sacramento Democrat called a morning session of the Senate, where lawmakers have fallen one vote short of passing the enormous package of spending cuts, tax increases and borrowing.

The chamber recessed shortly after it convened to let the minority Republican members huddle privately to plan their strategy. Under California's two-thirds vote requirement to pass a budget, passage would require support from all Democrats and three Republicans in each house.

The Senate will remain in continuous session until it passes the budget plan, which is intended to close a $42 billion deficit through June 2010.

Steinberg had warned lawmakers Monday to bring their toothbrushes, saying they would not leave until that one additional vote was secured.

The Assembly had the votes to pass the package but was waiting for the Senate to act. Assembly Speaker Karen Bass urged state employees facing layoffs to call Republican senators and press them to vote for the budget.

"If we don't pass the budget, the situation is just going to get so much worse," the Los Angeles Democrat told reporters Tuesday. "One more Republican senator needs to do the right thing."

Like other states, California faces plunging tax revenue that has imperiled state services.

The compromise proposal put before lawmakers was negotiated by Gov. Arnold Schwarzenegger and the four legislative leaders - two from each party.

The plan includes $15.1 billion in program cuts, $14.4 billion in temporary tax increases and $11.4 billion in borrowing. The package also would send five ballot measures to voters in a special election to be held May 19.

The governor had delayed releasing layoff notices on Friday when it appeared lawmakers would pass the compromise plan.

But after the weekend sessions failed to produce the necessary votes, Schwarzenegger's spokesman said the administration had no choice. "In the absence of a budget, the governor must do everything he can to cut back on state spending," spokesman Aaron McLear said.

Despite the warnings of impending fiscal calamity, most rank-and-file Republicans have refused to agree to higher taxes. Republican lawmakers blamed Democrats for years of overspending.

"You're not going to go back to the people's pocketbooks to fuel that spending," said state Sen. Dennis Hollingsworth, R-Temecula.

During a lively floor session Monday night, state Sen. George Runner, R-Lancaster, defended his colleagues' stance against tax hikes and said his constituents were pleading with him to vote no on the budget proposal.

He accused Democrats, who hold majorities in both houses, of using the recession to drive an agenda of tax increases. "You want this emergency," Runner said, drawing jeers from Democrats.

Steinberg, the Senate president pro tem, acknowledged that tax increases were difficult for all lawmakers to swallow but said the Legislature has no choice.

"Nobody likes that idea, but remember the reason we are in this crisis is because we are in a national and international crisis," he said.
http://apnews.myway.com/article/20090217/D96DJ6101.html

I saw on Cbs that California is one of the states in worse shape.. I still think we should go to Nevada and prospect for gold LOL

8 Re: Benefits Neglected for Civil Retirees on Tue Feb 17, 2009 11:16 pm

SSC


Admin
gypsy wrote:
gypsy wrote:Don't you think taxpayers have always faced the burdens with a destroyed economy/government?
no not over my head, didn't post about the post you made was just asking a question~

For one thing the economy has not always been in such dire straits as it is in now. This article is showing the states dropping the ball and not bankrolling the funds for future generations benefits. Now with the economy down the situation has risen to the top.The ones to suffer are the employes .

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