Unfunded liability: $4.1 billion — with a ‘b’
Faced with a patient suffering from a massive head injury, Nevada lawmakers this week donned their surgical gloves, slapped a Band-Aid on the gaping wound and fled the operating room.
The patient was the state’s Public Employees Benefits Program. It is bleeding to the tune of a $4.1 billion unfunded liability.
That’s the amount of money taxpayers will have to cough up in the future to provide state workers with the generous benefits they’ve been promised until death — benefits most private-sector workers can only dream about.
But beginning this summer, federal law requires that states must report such unfunded liabilities. The information will be available to Wall Street bond agencies, which could downgrade the ratings of states headed for trouble.
In order to demonstrate to investors and others that they are serious — really, really serious — about addressing the issue, Nevada lawmakers on Thursday voted to put $50 million toward making the benefits plan solvent.
That covers just 1.2 percent of the $4.1 billion hole.
And it does nothing to reform the structural deficiencies in the program.
In fact, regardless of how much tax money the Legislature shifts around to pretend it’s dealing with the unfunded liability, the massive obligations will continue to grow at an alarming rate unless lawmakers find the guts to overhaul the program.
Reducing benefits for new hires, mandating that existing workers pick up a larger share of the health care costs and shifting the state retirement program from a defined-benefit plan to a defined-contribution plan would be good starts.
Given the clout of public-sector unions, however, don’t count on any of those reforms becoming law soon. Rather than do the necessary surgery to repair the Public Employee Benefits Program, look for lawmakers to instead keep wheeling the taxpayer into the operating room and butchering him in an effort to extract every last dime.