Retiree health tab for Marin cities hits $5,700 per household

By Nels Johnson, Marin Independent Journal -

The average household across all Marin cities owes about $5,700 to pay for retiree health care promised to public employees but left unfunded by elected officials, a new study indicates.

The calculation by the Marin County Civil Grand Jury follows the panel's disclosure that public agencies across Marin have mounted a $522 million debt for retiree health care, posing a potential fiscal burden for a future generation of taxpayers.

Grand jurors provided new details reflecting the impact of unfunded health care promises made by public agencies after an Independent Journal request for more information about a jury report issued a week ago.

The average tab for a home in a city or town across Marin was calculated by determining the liability of each taxing agency on a city household's tax bill, then adding them to determine the overall liability. The calculations range from highs of $7,982 per household in Mill Valley, $7,365 in Ross, and $7,127 in Corte Madera, to lows of $3,890 in Novato and $4,410 in Fairfax. Others include $4,484 in San Anselmo and $4,900 in San Rafael, as well as Belvedere, $5,184; Sausalito, $5,270; Larkspur, $5,374 and Tiburon, $5,500.

The liability for a single entity, county government, was "$293 million or about $2,627 per county household," representing a "looming financial burden," jurors warned. Overall liability for various unincorporated communities include the county tab as well as those of other taxing agencies in their areas. Marinwood households, for example, each face a $6,195 liability.

After the jury issued its report, foreman Rich Treadgold and juror Paul Premo provided calculations regarding the panel's novel "per household" way of expressing the cost of health benefits elected officials have guaranteed but left unpaid.

Premo, a retired Chevron fiscal executive and economic consultant, broke down liability per household by calculating liabilities for individual agencies that impose taxes within city limits, "adding up the layers" of debt, then factoring in the number of households.

"There is a multiplicity of layers of governmental entities that have promised benefits they have not paid for," Premo noted. "The people have a bill and it is not paid for yet."

The bill for health care is in addition to the tab for pensions, a program also plagued by unfunded liabilities. Although modest state pension reform caps several pension benefits for new employees, it allows health care costs to escalate unchecked.

With more people retiring and many living longer, coupled with variables including the rising cost of health care, the health tab will soar, Premo noted.

"It will go up every year," he said.

Premo and Treadgold noted the jury study of retiree health care approved by the county and 39 other local agencies concluded that officials must pay down debt, cut benefits and require employees to chip in.

Most agencies do not fund the future retirement health benefits they promise, but merely pay the current year's medical premiums for retirees, allowing the tab to increase. Barring action by elected officials soon, "each Marin County household will be assessed significant additional taxes or will see a dramatic reduction in services," the grand jury warned.

"We hope this gets the attention of Marin County residents," Treadgold said.

"We don't want a legacy like this for our grandchildren to deal with," added Nadine Muller of Nicasio, who served on this year's jury and will continue on as forewoman of next year's panel. "They won't be able to afford to live in Marin County."

More information: http://www.marincounty.org/depts/gj/reports-and-responses