All those cliches apply when it comes to West Virginia’s $8 billion problem with funding retiree health care costs for state employees.
For years governments in West Virginia and around the country did not think much about the long-term costs of the health benefits they promised. But as health costs soared, it became clear that revenue needed to be identified to meet those mounting obligations.
In 2006, changes were made to auditing practices that required governments to show that debt on their books. School boards in West Virginia felt the pinch right away, and earlier this year 50 of 55 West Virginia county school boards sued the Public Employees Insurance Agency, its finance board and the state auditor, contending the state should be responsible for those costs.
Recently, a Kanawha County judge ruled it was not a judicial matter, and it was up to the Legislature to find a solution.
The good news is that the Legislature’s Joint Finance Subcommittee C, lead by state Sen. Brooks McCabe of Kanawha County, has been on the case all year. The bad news is that most of the options involve some reductions or changes in benefits, and simply finding new revenue will be difficult.
A working list of possible solutions is available for public comments, and it would be a good idea for state workers and interested members of the public to take a look at the list.
Currently retirees pay premiums that only cover 40 percent of their health care costs. So many of the suggestions deal with how PEIA subsidizes the remaining 60 percent of those costs. A number of ideas deal with the ability of workers to convert unused sick leave into post-retirement benefits, something that already has been restricted for some new hires. Others range from reducing plan benefits to increasing tobacco or alcohol taxes to help pay for it all.
Clearly, the ball is back in the Legislature’s court, and there are tough choices ahead. Many states and local governments are wrestling with similar problems, and all these situations remind us that government needs to keep a closer eye on the cost of benefits and what the public can afford.