$50 million to help pay down benefits liability
CARSON CITY — Nevada lawmakers reviewing a budget for the Public Employees Benefits Program voted Thursday to put $50 million toward paying down a $4.1 billion long-term liability that could cause trouble for the state’s credit ratings.
Lawmakers on a joint Senate-Assembly budget subcommittee approved the amount recommended by Gov. Jim Gibbons, despite a staff report that an annual contribution of at least $247 million is needed to keep the liability off financial statements.
The liability will keep growing unless benefits are changed or more money is allotted to pay it down in future budget cycles, legislators were told.
Beginning this summer, all states must report such unfunded liabilities, and Wall Street bond-rating agencies will be taking note.
If states don’t take action to reduce them, a bond-rating agency could downgrade their ratings, which could cost the states money.