NCPA - National Center for Policy Analysis

TEXAS FACES MASSIVE BILL FOR STATE RETIREES' HEALTH CARE

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.

Also:

  • 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:

http://www.pewtrusts.org/news_room_ektid32368.aspx

 

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