$58 Billion Shortfall for New Jersey Retiree Care

The New York Times reports:

In 1994, New Jersey decided to stop setting aside money in a fund to pay for health care for its retired public workers. The savings paved the way for a big tax cut.

Meanwhile, hundreds of thousands of public workers were being told that as long as they worked 25 years, the system would provide virtually free health care for them when they retired, often when they were as young as 55.

No one added up the cost — until now.

It turns out that New Jersey will need about $58 billion, in today’s dollars, to provide all the care it has promised its current and future retirees. That’s nearly twice the state budget and nearly twice the amount of its outstanding debt. And because of the step it took in 1994, the state has virtually no money in reserve to cover those costs.

In addition, New Jersey’s towns and other local governments owe about $10 billion for health care for their own retirees.

You can always count on the NYT to blame tax cuts for budget problems.Those government workers sure are special.