Promises With A Price

The Pew Charitable Trust has published a research report titled “Promises With A Price.” This report compiles and analyzes the staggering costs taxpayers are going to have to pay in order to keep the heavy retirement promises that our politicians have made to our government employees, but have not saved enough money to fund. It is important reading for all citizens.

Nevada’s pension funding level is below the norm for the 50 states, and it faces a fairly significant liability for non-pension benefits. These costs, principally for retiree health care, were projected to rise 20% from 2008 to 2009, according to information presented to the Nevada legislature in early 2007. If the state moves toward pre-funding its non-pension liability, the required annual contribution would be about four times the pay-as-you-go cost. But moving toward full funding would be smart fiscal practice because it would reduce the long-term bill considerably, from $4.1 billion to $1.6 billion. This is because the interest the state is likely to earn when it invests more money over the long term can be applied to paying down the bill.

Here’s a fact sheet on Nevada from Pew.

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