Part of the Transit problem is with pension benefits. From what I've read recently, government pension and medical benefits are going to be a HUGE issues in the next several years and decades. Until now, city and county governments have been recording employee benefits as they come due, not accruing the liability as it's incurred. As a result of not accruing the liability, many local governments have not been saving funds in order to pay for the benefits of retired employees.
Unfortunately I can't post the entire article from nytimes.com, but here's part of it.
The Next Retirement Time Bomb
By MILT FREUDENHEIM and MARY WILLIAMS WALSH
SINCE 1983, the city of Duluth, Minn., has been promising free lifetime health care to all of its retired workers, their spouses and their children up to age 26. No one really knew how much it would cost. Three years ago, the city decided to find out.
It took an actuary about three months to identify all the past and current city workers who qualified for the benefits. She tallied their data by age, sex, previous insurance claims and other factors. Then she estimated how much it would cost to provide free lifetime care to such a group.
The total came to about $178 million, or more than double the city's operating budget. And the bill was growing.
Unfortunately I can't post the entire article from nytimes.com, but here's part of it.
The Next Retirement Time Bomb
By MILT FREUDENHEIM and MARY WILLIAMS WALSH
SINCE 1983, the city of Duluth, Minn., has been promising free lifetime health care to all of its retired workers, their spouses and their children up to age 26. No one really knew how much it would cost. Three years ago, the city decided to find out.
It took an actuary about three months to identify all the past and current city workers who qualified for the benefits. She tallied their data by age, sex, previous insurance claims and other factors. Then she estimated how much it would cost to provide free lifetime care to such a group.
The total came to about $178 million, or more than double the city's operating budget. And the bill was growing.