Sep. 25--Wisconsin's largest local government employers have about $6 billion worth of health insurance and other non-pension benefits they have promised to future retirees that they have yet to save up for, according to a new report.

Of the nearly $6 billion of retirement obligations identified in the report, about three-quarters, or more than $4.5 billion, is owed by taxpayers who support Milwaukee Public Schools, Milwaukee County and the City of Milwaukee.

Calling the situation "a ticking time bomb," the report being released today by the Wisconsin Policy Research Institute calls for prompt attention to the growing burden for future taxpayers.

"This isn't at all unlike kind of what we're seeing on Wall Street right now with the investment banks," said Christian Schneider, a senior fellow with the conservative think tank in Thiensville. "We have the warning signs of what's going to happen, and they're being ignored right now."

Taxpayers could wind up being saddled with an overwhelming bill if government employers do not start setting aside money to cover promises made to employees, Schneider warned.

Milwaukee Public Schools' study of its obligations found that if the system continues to fund its non-pension retirement benefits at the current rate, its $2.2 billion liability could reach $4.9 billion by 2016.

At one point, there will be a tipping point, Schneider said, "where taxpayers will be asked to bail the whole system out."

The $2.2 billion that MPS faces in liabilities, almost all of it for future health costs of employees, towers over the amounts of any of the other cities or school districts in the study, not only when looked at in total but when looked at on a per-student or per-person basis.

The report says that if MPS were budgeting the full amount each year that accounting principles say it ought to set aside for future retirement benefits, the amount needed would come to more than $2,100 for each student in the district. That doesn't include the costs of pensions.

MPS officials responded that the district is hiring an independent firm to do a broad analysis of the financial state of MPS and make recommendations on what should be done with issues such as retiree benefits.

"We struggle with our health care costs at MPS," said Michelle Nate, chief financial officer for MPS.

High costs affect the ability to provide an adequate education, she said.

"It's a generous benefit and we are a very big system," she said.