NCPA - National Center for Policy Analysis


December 19, 2007

Public pensions in Texas are in fair financial shape, but the state still faces a massive bill to cover health care costs and other retirement benefits for state employees and public school workers, according to a report by the Pew Center on the States.

Other findings:

  • Texas has about 89 cents of every dollar needed for the pension benefits promised to state employees and teachers over the next 30 years.
  • Nationally, public pensions have 85 cents of every dollar needed.


  • Despite the condition of public pension funding, the state faces a $36.8 billion unfunded liability in providing health care and other benefits to current and future retirees.
  • The five largest states -- California, Texas, New York, Florida and Illinois -- have set aside no money to pay for health insurance and other retiree benefits.
  • New York figures show it owes an estimated $50 billion, while California owes about $48 billion.

Texas, like most states, handles retiree benefits on a pay-as-it-goes-basis rather than setting aside money to decrease the unfunded liability.

Source: "Texas faces massive bill for state retirees' health care," Houston Chronicle, December 18, 2007.

For report:


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