School districts struggle to pay retirees’ health benefits
Some Minnesota school districts may have to go into debt to pay for the rising cost of health care for their retired employees.
Local Minnesota governments have until October to sell bonds — without a public referendum — to help pay for retired employees’ health care. But with the economy in the tank, some people are unhappy about paying higher property taxes to fund someone else’s health benefits.
The retirees’ health policy costs fall under something accountants call OPEB — Other than Pension Employee Benefits. OPEB obligations, especially for health care, are really starting to put the squeeze on school districts statewide.
“We’re actually paying for a larger number of retirees, from a pot that is generated by a smaller number of students,” said Robert Belluzzo, superintendent of the Hibbing school district.
In that district, $1 of every $5 of its budget goes to retiree benefits, primarily for health care. Meanwhile, Belluzzo says the retiree pool keeps growing.
“The number of retiree health insurance plans is more than the number of active insurance plans that we have,” said Belluzzo.
