Description/Abstract
Many New York State school districts spend significant amounts each year for retiree health care benefits, and these payments are expected to grow over the coming decades. This brief summarizes findings from a study examining approximately 300 New York State school districts. Unlike retiree pension plans, which are typically prefunded, retiree health care benefits are funded on a pay-as-you-go basis, meaning that benefits for past employees who are currently retired are paid using current district revenues. In the average school district, pay-as-you-go spending currently amounts to 4.5 percent of district revenues. Assuming current benefit and funding policies remain, spending is projected to reach 9 percent of total revenue by 2055 and exceed 13 percent by 2075. The authors discuss three policy changes which together offer one possible approach to slowing the growth of future costs: partial pre-funding, increasing the years of experience required for eligibility, and gradually increasing the share of insurance premiums paid by retirees.
Document Type
Policy Brief
Date
12-10-2025
Keywords
Education policy, retiree health care benefits, school district budgets, fiscal burdens
Language
English
Series
Policy Briefs Series
Acknowledgements
The authors thank Alyssa Kirk and Shannon Monnat for their edits on a previous version of this brief.
Disciplines
Economic Policy | Education Policy | Finance | Public Affairs, Public Policy and Public Administration | Public Policy
Recommended Citation
Bifulco, Robert, and Shybalkina, Iuliia. (2025). Can Schools Sustain the Rising Cost of Retiree Health Care? Center for Policy Research. Policy Brief #24. Accessed at: https://doi.org/10.14305/rt.cpr.2025.8
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Included in
Economic Policy Commons, Education Policy Commons, Finance Commons, Public Policy Commons
