Our friends at ALEC – which represents several thousand state legislators – have found in a new 50 State report that the unfunded liabilities for promised public employee benefits (not including pensions) are MUCH higher in liberal blue states. These benefits include medical benefits, life insurance, and supplemental Medicare.
Eight of the 10 states with the lowest liabilities are red states. Eight of 10 of the states that are loading future costs onto taxpayers’ backs are blue states.
As Jonathan Williams, one of the report’s authors points out, these liabilities are “a penalty imposed on those who move into a state and then have to pay taxes for public services provided in the past.” It’s like having to pay at a restaurant for someone else’s meal.
We wish to issue a commendation to Nebraska, Utah, South Dakota, Idaho, Oregon, and Montana for having per capita liabilities of less than $200 per person.
The states to avoid like the plague are: Hawaii, New Jersey, Alaska, Delaware, Connecticut, and Illinois. They have liabilities of more than $8,000 per person. In New Jersey, the liability is almost $20,000 per person, which is like an $80,000 TAX for buying a house in the Garden State.
What is so sad about this is that the solution is so obvious. Convert public employee health benefits into defined benefit and portable medical savings accounts (and on the pension front, retirement benefits should be standard defined contribution 401k plans).
Why doesn’t this happen in blue states? Oh, yeah, we forgot. States like New Jersey, New York, and Illinois are run for the benefit of the teachers’ unions and other public employee unions, not the citizens.