More thoughts on retiree health issue.

As Pat Anderson is about ready to speak at a chamber of commerce event here are more thoughts on the issue.

Is the city’s retiree health care “problem” really a problem or is just talk about nothing. We will try to discover that in this post. I believe however that the answerer is very clear. This is a huge problem, but again you make up your own mind.

It must be a big issue, here is why, Duluth has been used as an example in many news papers, as to what happens if retiree benefits are not paid for up front. They have not been small papers like the Duluth news tribune. In fact they have been big name papers like the Washington Post, USA today. We have also seen State Auditor Pat Anderson come and speak to this issue once and this next week will mark her second visit to discuss this issue.

When did this issue start? The retiree health care benefits were awarded to the workers more then 20 years ago. At that time there was not really a plan on how the city would pay for these benefits, and to this day there is no plan. This is why we have this issue in front of us today.

So is this the first time the city has known about the issue? NO, the city has known about from the beginning they chose to do nothing. However they could have done something many times. In 1998 the city was facing a very manageable unfunded liability of 34 million. In 2002 as nothing was being done it the liability grew to 178 Million dollars, and just three year later it sat at 279 million dollars. In four years 1998-2002 we say in increase of 144 million dollars in the unfunded liability. Then from 2002-205 it shot up just more then another 100 million dollars and now we are looking at an unfunded liability of 300 million. That is an increase of 266 million dollars in 5 ½ years.

This problem did not start under Mayor Bergson but it needs to end under his control. Duluth can no longer afford to have this unfunded liability. Here is a short timeline of this issue.

Information is taken from Connect Duluth media information packet from there press conference.