If government healthcare obligations continue to grow as expected, they could end up “overwhelming the government’s budget,” Financial Secretary Ken Jefferson told the Public Accounts Committee last week. He added that in future years, these small islands could be expending “hundreds of millions” of dollars each year to ensure government retirees can receive their health benefits.
Then, inexplicably, Mr. Jefferson added, “I don’t want the public to be left with the impression that this is a crisis.”
Pardon our naiveté, but to us it looks very much like a crisis. Consider:
- The estimated healthcare liability the government will face over the next 20 years for current civil service employees and their families is $1.7 billion at present dollar values
- That $1.7 billion, when added to government’s other liabilities, significantly exceeds the total value of all of the assets in the public sector – in other words, all of the land, buildings, highways, EVERYTHING the country owns
- In 2014, government estimated its unfunded healthcare liabilities for current and retired civil servants was $1.18 billion. Two years later, in 2016, that number had increased to $1.4 billion. One year later, in 2017, that number had jumped again to the $1.7 billion mentioned above – a 44 percent increase in just three years.
The reality is that Cayman’s taxpayers cannot afford to fulfill the platinum-plated promises that government has already made to existing civil servants, who, heretofore, have demonstrated a steadfast unwillingness to accept reductions to, or share the costs of, their overly handsome benefits packages.
The financial secretary’s reassurance, that “The government has cared for retired civil servants and their families all along without this becoming a national crisis,” is no assurance at all, considering that government has accomplished that through a “credit card financing” strategy of using future anticipated funds to pay for obligations incurred in the past.
For years, public officials in municipality after municipality, state after state in the United States, and country after country around the world have watched as public healthcare liabilities have sunk, and ultimately destroyed, their economies.
In Cayman, our leaders have known with certainty – buttressed by hard numbers and actuarial projections – that the benefit schemes for civil servants were financially unsustainable. And yet, officials have continued to promise free non-elective medical and dental care for civil servants, their spouses and children; and free medical and dental care for retired civil servants and their spouses – for life.
Elected leaders have cowered from the potential displeasure of 3,600 civil servants plus their dependents – who together constitute Cayman’s largest voting bloc – as the financial realities have grown more (and more obviously) dire.
The public should no longer leave unchallenged such saccharine statements from Mr. Jefferson (and his cohorts) as “The government has cared for retired civil servants and their families all along with this becoming a national crisis.” Or, “It was concluded that the cost-sharing arrangements would not affect existing civil servants. It would only impact civil servants hired at a specified date.”
Not surprisingly, that “specified date” has not been specified.
Every citizen of these fair isles should be asking whether they are comfortable spending “hundreds of millions” of dollars each year of their hard-earned money to pay the healthcare benefits promised to our civil servants by our vote-seeking politicians.
As long as this newspaper has paper, ink and printing presses at our disposal, we will continue to address this budget-busting, country-killing issue.