Last June I reported on a presentation by David Coates at an Ethan Allen Institute event. His argument was that the fiscal crisis represented by the state’s unfunded liabilities presented the single biggest threat to the integrity of our financial system.
Mr. Coates is a CPA who serves on the Commission on the Design and Funding of Retirement and Retiree Health Benefits Plans for State Employees and Teachers, as well as the Governor’s Council of Economic Advisors, the Governor’s Advisory Board for Economic Development, the Vermont Debt Affordability Advisory Committee, and the Vermont Municipal Bond Bank.
He recently wrote an article in the Vermont Business Magazine updating his view on this situation:
Beginning in 2009 we have periodically written to Vermonters regarding state and teacher pensions and related retiree health care benefits, and the impact they have on our fiscal future. In reviewing the most current Report of the Actuarial Valuation, it is evident that Vermont has made no overall progress on containing these costs. Instead, we have continued to pile on more debt to be borne by future generations of Vermonters, and have placed additional pressure on future budgets that will crowd out funding of other important and necessary programs.
He goes on to point out that “Other states have taken the unpleasant, but necessary, steps to restructure their plans and have saved their taxpayers millions in future costs, without disrupting the pensioners’ benefits.” Perhaps it is time the we did the same.