Editor’s note: This commentary is by Mark Crow, who is president at Tenth Crow Creative and chair of the Pension and Health Benefits Reform Task Force of the Vermont Business Roundtable.
While Town Meeting Day has evolved over time, its purpose of giving community members a chance to be heard about the issues affecting their lives has not changed. Of course, in order for community members to express their views, they must be aware of the issues impacting them. Unfortunately, there is a major issue lurking that impacts all Vermonters, yet is not well known or understood, not only by Vermont taxpayers, but also by some of our legislative representatives.
I’m referring to the continually increasing taxpayer liability for the State workers’ and teachers’ pension and retiree health care plans. This Town Meeting Day, I urge you to ask your state legislators what they are doing to address Vermont’s third largest debt (only behind Medicare and non-Medicare social services), and if they know that:
1. The total amount owed today is $4.6 billion — $2.3 billion for the pension plans and $2.3 billion for the retiree health care plans. That means that, as of the end of Vermont’s 2019 fiscal year, every Vermont resident was liable for $7,400 of the current amount owed to the state workers and teachers’ pension and retiree health care plans; in 2009, the amount was $4,500.
2. This liability increased 110% from 2009 to 2018, and the annual payment the state is required to make towards the pension liabilities currently represents 12% of the state’s budget. That amount was $147 million in 2018 and is expected to increase each year to $306 million by 2038.
3. And, there is no concrete plan for paying the retiree health care liabilities, which total $2.3 billion as of June 2019.
Yes, this is complex stuff, with big numbers that tend to be put on the back burner, and I suspect many of your legislators are not familiar with this issue. But they should be, right? The ever-increasing magnitude of these liabilities will continue to absorb more and more of the state’s precious economic resources – resources that could otherwise be used for needed and vital state programs. And, if not addressed, these liabilities ultimately could affect the health and wellbeing of all Vermonters.
But there are solutions. The Vermont Business Roundtable recently published a report that provides specific policy options to help solve the problem, and not all of them require new spending by the state. Learn more at vtroundtable.org, and spread the word to your legislative representatives.
