Washington's pile of cash for paying workers' compensation claims is shrinking. But otherwise, the state government unemployment and pensions system appear in good shape despite some hiccups here and there, according to the State Auditor's Office's annual financial report released this week.
Olympia budget gurus and budget geeks will study the ebbs and flows in this report as they plot out plans for the Washington government's future finances. And some of the trends could influence policy debates. The state Legislature has argued about changes to the workers compensation system, which provides disability payment to injured workers, almost constantly over the past several years.
The link to the entire “Comprehensive Annual Financial Report" is here. Here is a brief breakdown of a few of its findings:
Workers' compensation: An increase in workers' compensation claims — those for injuries on the job has chewed away at the equity of the workers' comp system — dropping that figure from $1.8 billion in fiscal 2011 to $1.2 billion in fiscal 2012 to $926 million in fiscal 2013. An independent actuary found that the reserves are at "reasonable" levels.
Unemployment compensation: Washington's unemployment compensation system is in much better shape that those in most states, said Washington State Auditor Troy Kelley. In fiscal 2013, the system was $174.3 million in the black, compared to $51.8 million in the red the previous year. Washington has enough cash in this fund to handle 14 months worth of benefits. Most states are in the red or near a balance of zero in their unemployment compensation war chests, Kelley said.
Pension plans: State employees are currently paying into the PERS 2 and PERS 3 systems. Meanwhile, most current retired state employees are in the much more generous PERS 1 system and the current retired teachers are in the TRS 1 system. The PERS 1 system's unfunded liabilities grew from $3.8 billion to $3.951 billion from June 30, 2012 to June 30, 2013. And the TRS 1 unfunded liabilities grew from$1.9 billion to $2.047 billion during the same period. Right now, the PERS 1 system is 57 percent funded, while the TRS1 system is 63 percent funded. But those figures are better than percentages in retirement funding in most state, Kelley said.
The "rainy day" fund: This is the break-glass-in-case-of emergency account. It has grown, collapsed and then blossomed in the past five years. Most recently, it's gone from a low of $560,000 in 2011 to $130 million in 2012 and $269 million in 2013, the best since the Great Recession hit.
The level of the rainy day fund is another area of recent policy debates, with frequent arguments about whether the state should save more in case of future trouble or put extra dollars into programs that serve public needs.
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