The tab: $47.9 billion. If that sounds worrisome, consider that Chiang makes the questionable assumption that the current steep rise in health care costs will ease over time, from 10 percent this year to 4.5 percent 10 years from now.

If that hopeful scenario doesn't play out, the total obligation to state taxpayers could be much higher. In fact, it could be in the upper range of the $40 billion to $70 billion that the Legislative Analyst's Office estimated last year. And that's just for state employees. Cities, school districts and community colleges face an estimated $90 billion in health care obligations.

Speaking at the Sacramento Press Club on Monday, Chiang urged the governor and lawmakers to start setting aside $2.6 billion a year in an investment trust to pay for state employee health benefits.

He didn't use the word "lockbox," but the message was the same: The state needs to set aside major dollars and earn investments returns on them. If it does so, it could reduce the overall 30-year obligation of taxpayers to $31.3 billion.

A plan to pay off this huge problem over time is needed. But Chiang and other state leaders need to confront one of the tougher questions posed by this ticking fiscal time bomb: Can and should the state continue to offer these same benefits to future employees? And if so, how? No one seems to have a good answer.

Sacramento Bee Editorial: Huge health problem
May 9, 2007