National Conference on Public Employee Retirement Systems

The Voice for Public Pensions

Funding Local Government Health Care is Getting Tougher

October 17, 2011

National Study Tracks Ongoing Efforts to Trim Employee and Retirees Costs

About 42 percent of cities, counties and townships across the nation expect their revenue to fall again in 2012, according to a national study of over 1,690 local governments across the country. Local leaders are confronting employee health costs to help balance budgets.

According to the Health and OPEB Funding Strategies: 2011 National Survey of Local Governments, the number of local governments setting aside dollars to pay the long-term costs of retiree health care has fallen from 30 percent in 2010 to 21 percent in 2011. In addition, local leaders are using strategies ranging from wellness programs to higher out-of-pocket costs to bring costs under control.

"In a very real way, local governments must choose if they will pay for police, potholes, or pills," said William SaintAmour, executive director of Cobalt Community Research. (Read more.) (Access the study.)