Can state continue this level of employee benefits?

Modesto Bee 5/10/07

State Controller John Chiang has come up with a fresh and scary number on the cost of health care benefits promised to state employees over the next three decades: $47.9 billion.

It gets worse. Chiang makes the questionable assumption that the current steep rise in health care costs will ease, from 10 percent this year to 4.5 percent in 2017. If that hopeful scenario doesn't play out, the total obligation to state taxpayers could be much higher — up to $70 billion, according to the legislative analyst's office last year.

But that's just for state employees. Cities, school districts and community colleges face an estimated $90 billion in health care obligations.

Speaking at the Sacramento Press Club on Monday, Chiang urged the governor and lawmakers to start setting aside $2.6 billion a year to pay for state employee health benefits. He didn't use the word "lockbox," but the message was the same: The state needs to invest major dollars. If it does, it could reduce the overall 30-year obligation of taxpayers to $31.3 billion.

We need a plan. Chiang and other leaders need to confront one of the tougher questions posed by this ticking fiscal time bomb: Can the state afford to continue to offer these benefits to future employees?