California will need to pay about $48 billion over the next several decades to fund health and dental benefits for state and local government employees and retirees, according to a report released Wednesday by the Center for State and Local Government Excellence, the Torrance Daily Breeze reports.
Nationwide, state and local governments will need to generate about $558 billion to cover such obligations, the report said.
The unfunded liabilities represent payments that are scheduled to be disbursed, but do not currently have a designated revenue stream.
California Findings
The 140 California government agencies surveyed had a median unfunded liability of $26 million, according to the report.
In addition, of the agencies surveyed:
- 5% said they are likely or very likely to raise taxes to cover the shortfall; and
- 15% said they are likely or very likely to reduce spending on city and county programs to cover retiree health benefits.
Next Steps
Despite California's ongoing budget challenges, Controller John Chiang (D) has called on lawmakers to develop a long-term plan to address the $48 billion in unfunded liabilities.
Hallye Jordan, spokesperson for the controller's office, said Chiang continues to urge the Legislature and Gov. Arnold Schwarzenegger (R) to "pre-fund that obligation now, and save future generations of Californians billions of dollars" (Anderson, Torrance Daily Breeze, 7/15).