STATE OF CONNECTICUT
THE STATE COMPTROLLER
|WYMAN URGES LEADERS TO ADDRESS $21 BILLION RETIREE HEALTH CARE LIABILITY|
|Contact: Steve Jensen|
State Comptroller Nancy Wyman is urging the Governor and the General Assembly to allocate $100 million of this year's budget surplus to a new trust fund that will help address an estimated $21 billion liability in the health insurance account for retired state employees.
Wyman is also urging the adoption of legislation requiring 10 percent of any future budget surpluses be transferred to the interest-bearing trust fund. She outlined her proposal in a letter delivered today to the Governor and legislative leaders.
"Taking the action I have outlined could be the single most important step government can make this legislative session to strengthen Connecticut's long-term economic health and stability," Wyman said. " Failure to address this liability will likely reduce Connecticut's bond rating, and in turn dramatically increase the cost of borrowing for state projects."
The Comptroller's plan comes as the Governmental Accounting Standards Board, (GASB) implements new requirements impacting the reporting of financial obligations that state and municipal governments incur when they provide post-employment benefits other than pensions. In Connecticut, the cost of providing health insurance to approximately 36,000 retirees - currently about $380 million annually - is the largest liability of this kind.
Using these new GASB standards, the overall liability for Connecticut's retiree health insurance program is projected to be approximately $21 billion. Setting aside $100 million of this year's surplus, and dedicating at least 10 percent of any future surpluses, could reduce that liability to about $14 billion, or less.
"Implementing this simple and common-sense solution will reduce pressure on the state's bond rating and significantly lessen the need for tax increases to fund this liability moving forward," Wyman said.
Wyman is projecting the state will end the current fiscal year with a budget surplus of well over $500 million.
The State Comptroller appreciates input on this and other issues from residents of the state. Please feel free to contact her office by phone - (860) 702-3300; mail - OSC, 55 Elm Street, Hartford, CT 06106; or, via E-mail - email@example.com
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