You may believe that Montana is debt free following actions by the legislature earlier this year to pay off state debt. It is great that we passed legislation to pay off over $100 million of state bonded debt, but there is another debt obligation rarely discussed but costing us dearly.

Unfortunately, Montana has accumulated over $4.8 billion in pension debt over the past twenty years (in 2003 our pensions were fully funded with no debt). This debt is equivalent to over $4,300 for every man, woman, and child in Montana!  Pension liabilities have accrued for a variety of reasons, but the main culprit is that the assumed rate of return on investments has been less than what the actuary estimated over the past 20 years. The bad news about Montana pension debt is that it falls on the employer, in this case Montana taxpayers. We have a choice: establish a game plan to pay off the debt or continue to refinance the debt over and over until it is unmanageable. The current cost of lost earnings to Montana taxpayers is $350 million per year! This is a massive cost to bear as it is equivalent to more than 10% of the state’s annual general fund expenditures.