According to a financial statement issued by the state Division of the Budget, New York State owes $72.2 billion for promised health benefits for retired government workers, a 29-percent increase over last year.
Future retiree benefit costs rose by $16.3 billion in the fiscal year ended March 31, exceeding the state’s outstanding debt by more than $15 billion, according to the statement.
Most states cover retiree health benefits on a pay-as-you go basis. They don’t set aside money annually to pre-fund the obligations, as they do with pensions. Last year, New York, the third-biggest U.S. state by population, spent $3.3 billion on health care for active and retired employees as health-care spending rose 6 percent.
That is why under the Let New York Work agenda we asked that retirees contribute 25 percent toward the cost of their health insurance. We are grateful for the work our retirees performed to make New York better. But we can no longer keep covering that cost and still help local governments and schools under the new tax cap. It simply isn’t sustainable.