Tuesday, January 30, 2007

More Wisconsin Pension Problems

Wisconsin taxpayers have another bill to pay.

Governments in Wisconsin face costs of around $17.4 billion beyond what they have already set aside to pay for pensions and other benefits promised retirees, according to a study by the Wisconsin Policy Research Institute released today.

The paper, by former Wisconsin Secretary of Administration George Lightbourn, is the first to attempt to quantify those costs, which are moving into the spotlight after changes in accounting rules requiring they be calculated.

"The exact amount will not be known until 2009," Lightbourn writes. "But it is already clear that there are either tax hikes or program cuts in the future for Wisconsin taxpayers."

The costs are of two types: pension plans that fall short of the money needed to pay promised benefits, and the amount of money needed to pay other retirement benefits, mostly for health insurance

The State of Wisconsin has figured its unfunded liability for both pensions and other promised retirement benefits, and has sold $1.3 billion in bonds to fund the obligations. Lightbourn said that with interest, the bonds will cost $3.6 billion to retire.

Will these numbers emerge during DarthDoyle's State of the State address?

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