RALEIGH – Republican State Treasurer Dale Folwell is applauding a new law he has been pushing for that will finally start preparing for the massive unfunded liabilities hanging around taxpayers’ necks.
The law sets up an Employee Benefit Trust Fund to address the approximately $50 billion in unfunded pension and health care liabilities. The reserve will be funded through appropriations from the General Assembly, any overflows from the “Rainy Day Fund”, or savings from the refinancing of general obligation bonds or special indebtedness.
“I’d like to thank the General Assembly and the governor for their leadership in enacting this crucial piece of legislation,” said Folwell. “No more ‘kicking the can down the road.’ Today, we begin to make a generational difference for all North Carolinians and lead the nation in addressing $50 billion in unfunded pension and health care costs. Our office didn’t create or discover these liabilities, but we have an obligation to fix them.”
While Folwell is praising others, he has been beating the drum on the issue of unfunded liabilities and the dangers they pose to the taxpayers of the Old North State.
According to a report by Pew Charitable Trusts, the states altogether have $1.6 trillion dollars in long-term spending commitments for pension and retiree healthcare costs.
North Carolina’s per capita obligations for retiree health care is the 7th highest in the country at approximately $35 billion and just behind Illinois in its severity. It’s not good to be ‘just behind’ Illinois when it comes to debt burdens, and Folwell knows it best to tackle these kind of threats head on so they don’t blow up i the future.
The so called Solvency Fund is believed to be the only one of its kind in the nation.
The N.C. Department of State Treasurer administers the state pension plan with almost $100 billion in assets under management as well as the State Health Plan, which provides health care coverage to more than 720,000 teachers, state employees, current and former lawmakers, state university and community college personnel and their dependents, including non-Medicare and Medicare retirees.
As such its leader oversees an area with immense importance and impact on, not just state employees, but all the State’s taxpayers that are ultimately on the hook when obligations go belly up. Folwell and his significant accomplishments for taxpayers in just under two years inspire confidence that those impacts can be good ones by way of prudent, conservative fiscal policy.
This is yet another brick in the wall of protection around state finances and taxpayers.