Pensions, health insurance targeted

Pensions, health insurance targeted

 

Pensions, health insurance targeted: Members of the new Republican majority in the Alabama Legislature may be wondering just why they wanted the job as they struggle to keep government running with far less revenue than in past years.When lawmakers start their session on Tuesday, a focus will be on producing balanced budgets despite declining revenues.

One thing is certain about the budget year that begins Oct. 1 -- it's not likely to be remembered fondly by state employees and public school teachers. Some likely will face layoffs, and others could see their workdays reduced. The governor even mentioned possibly reducing the number of state holidays.

But state employees and teachers should brace themselves for something else -- their health insurance and pensions also are likely to be put under a microscope as the governor and the Legislature try to find ways to save money.

Gov. Robert Bentley said Friday that in writing the budgets, he and the lawmakers are likely to "ask employees to pay more" for their health insurance and pensions.

States across the nation are struggling to curb rising pension and health insurance costs. The trend in Alabama is disturbing.

For instance, Finance Director David Perry said Friday that pensions and health insurance accounted for about 6.75 percent of the General Fund budget in 2000. By 2005, that had climbed to about 8.5 percent. By 2010, pensions and health insurance for state employees were eating up about 12 percent of the General Fund budget.

"That is unsustainable over time," Perry said, saying a similar pattern could be found in the education budgets.

The governor and the budget director said there are a variety of approaches being discussed to control pensions and health insurance costs. Both emphasized that no firm decisions had been made on whether any or all of them will be proposed in legislation.

Among the possible approaches are:

# Providing no more than level funding, or possibly less than level funding, for the state portion of health insurance costs. That would leave it up to the managing boards of the state employees and teachers health insurance plans to make up the difference, either through cuts in coverage or higher employee contributions.

read more: http://www.montgomeryadvertiser.com/article/20110227/OPINION01/102270314/1006/OPINION

Posted by Nikkei 225 at 02:18
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