Anne Arundel County's 1.3B Shortfall

[Robert]

Anne Arundel County's 1.3B Retirement Shortfall


Well here we go, look to see your taxes raised to the max yet again.

The county paid $24 million in retiree health costs in fiscal year 2013, about $72 million less than what analysts say was needed to make a dent in the billion dollar problem. Source

Oh and here's a lovely list:

Retiree health benefits in Anne Arundel County Cost of retiree health benefits on a yearly basis. Includes the county government, Anne Arundel Community College and the Anne Arundel County Library.
2003 - $6.7 million
2004 - $8.2 million
2005 - $9.2 million
2006 - $10.3 million
2007 - $12.3 million
2008 - $16.3 million
2009 - $18.5 million
2010 - $16.2 million
2011 - $23.7 million
2012 - $23.8 million
2013 - $24.1 million
The county now faces a $1.3 billion obligation to pay retiree health benefits in the future. That obligation grows by millions every year.
Net increase in obligation by year
2008 - $69.9 million
2009 - $71.3 million
2010 - $71.2 million
2011 - $75.2 million
2012 - $87.9 million
2013 - $96.2 million
County analysts say the liability could increase by as much as $500 million in five years and $1 billion in ten years if nothing is done.
Source

 

[G20]

God forbid state employees would have to fend for themselves like the rest of us after retirement.

When will the morons in charge this state realize the programs they put in place are unsustainable.

 

[Mr H]

God forbid state employees would have to fend for themselves like the rest of us after retirement.

When will the morons in charge this state realize the programs they put in place are unsustainable.

This is just AACo, but yeah... the same principle applies.

 

[Name Taken]

The R's are TRYING to give AA County away aren't they?

Horrible planning to say the least.

 

[Mr H]

Steve Schuh is our best hope so far.

 

[Klunatic]

God forbid state employees would have to fend for themselves like the rest of us after retirement.

When will the morons in charge this state realize the programs they put in place are unsustainable.

About the same time the morons in this state realize the people they are putting in charge are morons, to late. When the state is broke, all of the business have left as well as all the wealth has fled the state for Texas, Florida etc..

 

[Seagrave1963]

Steve Schuh is our best hope so far.

Based on the back room table deals at Cookie's Kitchen or the Double-T Diner?

 

[Norton]

God forbid state employees would have to fend for themselves like the rest of us after retirement.

When will the morons in charge this state realize the programs they put in place are unsustainable.

Well, we do kinda fund our own retirement, but don't let that get in the way of a good rant. Carry on.

 

[Seagrave1963]

Well, we do kinda fund our own retirement, but don't let that get in the way of a good rant. Carry on.

 

[Robert]

Well, we do kinda fund our own retirement, but don't let that get in the way of a good rant. Carry on.

So I'm confused, what do you mean kinda fund your own retirement health care?

I could of swore millions of tax payer dollars also funded it? We are ~110 million in the red each and every year, and that gap is going to get larger each and every year. They are all ready looking at changes in county contributions to close the gap.

 

[Robert]

Also.. Benoit plan is said to save the taxpayers $22 million to $30 million per year, which I don't believe. The only thing he's offering up that will help is extending the time to earn insurance from five years to 10 years for non-public safety employees.

 

[Long1MD]

Shouldn't have halted gun shows

 

[kohburn]

if you want to talk about an unsustainable system leftover from the boomers.

how much do pensions cost MD?

anybody with reasonable math/economics understanding should have known that the concept of pensions was never sustainable and relied heavily on inflation to make them last longer, or they would have failed and taken a lot more businesses and governments down with them long ago.

 

[Bean Guy]

This disaster is playing out all over the country, Detroit is just the first domino to fall. The culprit - Santa Claus politicians(read DemocRAT) who buys votes by giving away stuff in the future without a care in the world how it will be funded - just kick the can down the road. Boo hoo, poor government workers will find out just like the Beth Steel workers found out - its dangerous to rely on the promises made by a debt laden employer run by weak mangement.

 

[zoostation]

Some random thoughts as I run out the door to work. As one of those people who is directly affected by this, and whose family will probably have to go on Obamacare come Jan. 1st, 2015 thanks to the county's "solution," which is to boot the retirees' families out of the insurance plan, I can tell you the numbers far overstate the issue.

Us bad county retirees don't want anything more than to stay on the county health insurance. Which is something we were promised as part of our retirement for decades. Yes, you get promised things, and you then you expect them. It's called a deal. And, if it makes anyone feel better, we also still contribute a portion to the cost of the coverage. I pay about $400 a month for ours.

Speaking specifically of the police retirees. We gave, all of us, decades out of our lives, gave up a lot of our health, statistics show we likely gave up a considerable portion of our expected lifespan, and gave up many years where we could have been doing things much more personally prosperous, all in order to serve the people of the county. And all along we were promised, either expressly or tacitly, really only two things when we got to the end of our service. A modest monthly paycheck, and health care. Is that really so much to ask.

The reason the county has this issue is because the council and executives for past years never put money away to fund retiree benefits. It's not a democratic or Republican thing. All of the county executives and councils for the past thirty years stuck their heads in the sand and ignored this problem while wasting money elsewhere. It's one of the few counties in the country anyone can seem to find that had retirees and didn't pre-plan for long term health care costs. Past councils have wanted to spend money on more important things, like a gigantic golf course on Ft. Smallwood Road.

If you want to see waste, look at the $123 million they are spending just in parks and recreation expansions in the next six years in the capital projects budget. That's not for maintenance of current services. Most of it is for new ideas, like $5.5 million to pave two walking trails (must be some expensive asphalt), or building an equestrian center at the Lake Shore complex.

The numbers on the health care costs are also overstated and inflated. The administration is trying hard to frighten citizens, they want to get their way on this bill. (doesn't that sound familiar) You have a very ambitious county executive who wants to move up in politics. The numbers are big, but it's not $1.3B. It's actually probably closer to a little over half that. But the numbers seem to grow every time the county budget people do a new press release. We've gone from $750 million to $900 million to $1.1 billion to now $1.3 billion in about a month since all of this started.

My own guess is the impact on my family from this bill forcing my wife and kids into the Obamacare offered by her work is going to be around $10K a year out of pocket for us. That's if everyone stays healthy. I know plenty of police retirees who can't take that kind of a financial hit without living in damn near poverty, and thanks to their many years of service in policework for the county can't really work now either.

 

[Robert]

Some random thoughts as I run out the door to work. As one of those people who is directly affected by this, and whose family will probably have to go on Obamacare come Jan. 1st, 2015 thanks to the county's "solution," I can tell you the numbers far overstate the issue.

Us bad county retirees don't want anything more than to stay on the county health insurance. Which is something we were promised as part of our retirement for decades. Yes, you get promised things, and you then you expect them. It's called a deal. And, if it makes anyone feel better, we also still contribute a portion to the cost of the coverage. I pay about $400 a month for ours.

Is that because you are currently employed or is it the difference in individual and family? I thought the county premium was WAY lower than that.

Speaking specifically of the police retirees. We gave, all of us, decades out of our lives, gave up a lot of our health, statistics show we likely gave up a considerable portion of our expected lifespan, and gave up many years where we could have been doing things much more personally prosperous, all in order to serve the people of the county. And all along we were promised, either expressly or tacitly, really only two things when we got to the end of our service. A modest monthly paycheck, and health care. Is that really so much to ask.

Thank you for your service. You guys should get paid upfront way more than you do. Anyone putting life and limb on the line to protect others should. The problem is that with the wild growth of government it's simply not sustainable (without major taxation) for current employees never-mind future employee's. Lets see if the unions agree.

The reason the county has this issue is because the council and executives for past years never put money away to fund retiree benefits. It's not a democratic or Republican thing. All of the county executives and councils for the past thirty years stuck their heads in the sand and ignored this problem while wasting money elsewhere. It's one of the few counties in the country anyone can seem to find that had retirees and didn't pre-plan for long term health care costs. Past councils have wanted to spend money on more important things, like a gigantic golf course on Ft. Smallwood Road.

The problem, at least in part, IMO is the cost of support was much much higher then was anticipated (also dealing in futures), and no one wanted to recognize and deal with it. It's the same o'l kick the can some more deal. As government grows it becomes an even bigger problem, and one that is simply unsustainable.

If you want to see waste, look at the $123 million they are spending just in the parks and recreation budget in the next six years in the capital projects budget.

The numbers are also overstated and inflated. They are big, but it's not $1.3B. It's actually probably closer to a little over half that. But the numbers seem to grow every time the county budget people do a new press release. We've gone from $750 million to $900 million to $1.1 billion to now $1.3 billion in about a month since all of this started.

My own guess is the impact on my family from this bill forcing my wife and kids into the Obamacare offered by her work is going to be around $10K a year out of pocket for us. That's if everyone stays healthy. I know plenty of police retirees who can't take that kind of a financial hit without living in damn near poverty, and thanks to their many years of service in policework for the county can't really work now either.

No doubt there is waste, and way too much of it, but my comments above applies. Without raising taxes to the max again, probably for the next 11 years and without making some big changes, it's not sustainable.

I hope the county get's it's act together, and deals with it, but make no mistake about it, taxes are going to increase over this and other government unsustainable employee benefit packages.

 

[K31]

Us bad county retirees don't want anything more than to stay on the county health insurance. Which is something we were promised as part of our retirement for decades. Yes, you get promised things, and you then you expect them. It's called a deal.

This.

When you take a job the benefits you are promised are part of your compensation. Just like the municipalities in California. You can't blame the workers. If they got money instead of retirement benefits would you expect them to give it back? Its just like that.

 

[zoostation]

Well the bottom line is, it is going to cost money. The bill has come due, and that's never fun. But it isn't nearly as bad as it is being painted. Again, you have a county exec trying to scare the daylights out of people, telling them that the 21st most wealthy county in the United States might go go bankrupt like Detroit if she doesn't get her way on something. I swear, her and O'Malley must have taken the same class on whipping up public hysteria. She lost all credibility in my eyes when she started with that.

The fact is the county council and executives for many years, decades, wanted to spend the money to play instead of paying the bills. There's a reason why Anne Arundel County is the only county in the state having a big issue with this.

Changes for people who are not yet hired and haven't been made promises, and built their life plan around service to the county, are something I can stomach. It might not be wise in the case of the police department. Given the problems the police department already has trying to get decent people recruited instead of being viewed as the last department to apply to before security work, as it is now. But it is not unethical.

But for those of us who were promised health care, and who have been there for years or are now retired. Sorry, but "it is unsustainable" has really just become code in my eyes for "I would rather not pay." The fact is the county can afford it, and without much trouble, but it is going to cost money. And their might have to be a few less ice rinks, golf courses, or equestrian centers built at the taxpayers' expense because of it.

 

[Robert]

Well the bottom line is, it is going to cost money. The bill has come due, and that's never fun. But it isn't nearly as bad as it is being painted. Again, you have a county exec trying to scare the daylights out of people, telling them that the 21st most wealthy county in the United States might go go bankrupt like Detroit if she doesn't get her way on something. I swear, her and O'Malley must have taken the same class on whipping up public hysteria. She lost all credibility in my eyes when she started with that.

The fact is the county council and executives for many years, decades, wanted to spend the money to play instead of paying the bills. There's a reason why Anne Arundel County is the only county in the state having a big issue with this.

Changes for people who are not yet hired and haven't been made promises, and built their life plan around service to the county, are something I can stomach. It might not be wise in the case of the police department. Given the problems the police department already has trying to get decent people recruited instead of being viewed as the last department to apply to before security work, as it is now. But it is not unethical.

But for those of us who were promised health care, and who have been there for years or are now retired. Sorry, but "it is unsustainable" has really just become code in my eyes for "I would rather not pay." The fact is the county can afford it, and without much trouble, but it is going to cost money. And their might have to be a few less ice rinks, golf courses, or equestrian centers built at the taxpayers' expense because of it.

I think that is where the focus is currently.

By the way 1.3B seems to be a fairly accurate number (the anaysis was done by independent consultants 2 years ago), given the amount needed and the time span of 30 years.

The entire 2014 budget is ~1.3B, up ~7%, almost 90 million more then 2013.

You can read the gory details here.

 

[mdram]

not reading the entire thread but pensions are outdated and should be done away with
public employees should be moved to 401k style retirements
the burden of pensions on the system is not sustainable because the politicians cannot keep their hands off the money. it needs to be locked away from them