A Tale of Six Cities: Underfunded Retiree Health Care
The growing costs of health care benefits for retired public employees—known as OPEB (other post-employment benefits)—pose a serious challenge to many city governments. In this paper, we analyze the retiree health care systems of six American cities: Boston, Minneapolis, Pittsburgh, San Francisco, San Antonia, and Tampa, Florida. Without major reforms, most of these cities will have to devote a much larger share of tax revenues to OPEB benefits and consequently less to essential functions like schools and police. We outline a broad variety of reasonable measures that cities could adopt to materially reduce their long-term OPEB liabilities.