It seems the numbers guys at GASB (motto: no pain, no gain) have a new rule. It requires governments to quantify the health care promises they've made to retirees for the next 30 years. They need to put that number on the books--and say how they'll pay for it.
In some states, the numbers are astronomical. Maryland's unfunded liability is $20 billion. That's billion, with a b. The state estimates it may have to come up with an extra $1.6 billion a year. "When I got the number I was in shock," Maryland budget chief Cecilia Januszkiewicz told the Journal. "There are a limited number of things we can do."
The good news: the accounting rule won't go into effect until mid-2007. The bad news: states, cities and counties have some dismal choices ahead of them. Cutting benefits, boosting premiums, and taxing, borrowing or cutting spending elsewhere. Good luck with all that.
MORE FROM GOVERNING: Adjusting for Age (March, 2005)
