OPEB, GASB Rules and Unfunded Liabilities for States

OPEB, GASB Rules and Unfunded Liabilities

According to the Governmental Accounting Standards Board (GASB), Other Postemployment Benefits (OPEB) include healthcare, life insurance, disability, and other benefits and services. Currently, states face issues with pension liabilities, since in the past they have not properly executed pension obligations. Now, local governments simply provide all the necessary healthcare benefits to retiring public workers as current expenditures cover those benefits; however, the past unfunded liabilities will still surface, making governments pay past OPEBs and include new funds in the operating budget for future retirements. GASB’s guidelines underline the states’ reporting of pension obligations and also create major issues not only for the states, but also for taxpayers, shifting the tax burden and OPEB liabilities to future taxpayers, resulting in what is called unfunded liabilities. Deducting money from current employee salaries to cover past liabilities may raise major disagreements, since healthcare costs keep increasing and OPEB expenses are rising simultaneously. The fact that costs for these particular benefits double every five years and that life expectancy keeps rising means that, sooner or later, these expenses will consume a major portion of state budgets. This makes it hard to predict how state governments are going to pay off OPEB’s past and future liabilities, given that imposing more taxes on current and future employees won’t be easy.

Performance Measures in Government

Every government establishes its own performance measures that serve a specific purpose. Many performance measures implemented by public managers may benefit their departmental operations; however, they might not be useful outside of the government. It is important to note that performance measures focus on monitoring:

• Inputs — the resources available, including full-time equivalent (FTE) hours used on tasks completed within a specific time frame for a specific purpose;
• Outputs — workload measures and the results of efforts, which help managers justify their need for more funding based on collected data on produced goods and services;
• Outcomes — measures performed mainly to conclude the impact that each department had on its community.

Performance measures are used to improve productivity and set expectations for outputs and outcomes. Improved performance can be achieved not only by public employees who produce goods and services, but also by meeting stakeholders' expectations and achieving possible goals with given resources and time.