Will retirees be a disaster for Ohio's budget?

According to the Ohio Public Expenditure Council (OPEC), between 2011 and 2020 nearly a half-million more Ohioans will leave the work force than enter it. (Source: "Retirees a threat to Ohio?" Columbus Dispatch, Jan. 11, 2008.) This means that by 2030, 20% of Ohioans will be 65 or older, up from the current rate of 13%. The Council calls this a "potential disaster" for Ohio's budgets as the "growing number of retirees will place increased demands on the Medicare and Medicaid health-care programs at the same time a smaller, younger generation may be contributing less in taxes."

However, Ohio Medicaid Director John Corlett said the fears may be overblown. According to Corlett, people are now working longer, many well into their 70s, but OPEC's report considered retirement at 65. Corlett also added that the number of people on disability is down. In addition, Fred Church, deputy director of the Ohio Department of Taxation, said he's not convinced of the problem either. Studies in Iowa and Minnesota found the impact of an aging population would be relatively small with regards to lower income-tax revenue for the state. "In Minnesota, projected tax revenue in 2030 would be 1.8% lower than current revenue after accounting for demographic changes. A similar study in Iowa projected a 4% drop."