Friday, March 7, 2008

Maine's Soaring Bill for Retiree Health Care Benefits

By J. Scott Moody

This week the Maine Heritage Policy Center released a new report examining Maine's unfunded liability associated with the promised retiree health care benefits for state employees and public school teachers--in accordance with the new GASB 45 ruling. The report finds that Maine's unfunded liability is $4,756,000,000. If Maine continues to fund these benefits on a "pay-as-you-go" basis, the yearly budget outlay will skyrocket 155 percent to $296 million in FY 2016 from $116 million in FY 2007. The report concludes that the best solution for Maine taxpayers would be to reduce the promised level of retiree health care benefits--a necessary step many states have already taken. This step is even more important in Maine because, according to data from the National Conference of State Legislators, the monthly health care premium cost (family coverage) for a Maine state employee was $1,454.78 in 2006--the 3rd highest in the country.