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Stateline.org
Aging Surge Poses Challenge for States
By
Kathleen Murphy, Stateline.org
Staff Writer
July 1, 2005 - State leaders are getting gray hair
worrying about the impending impact of Americas aging population, but
they're only slowly taking steps to meet the challenges that will arise
as post-World War Two baby boomers start reaching retirement age in
2011.
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A rising population of people over 65
will drastically affect states' tax income because the elderly
are allowed more tax breaks. (Chart courtesy of AgingStats.gov) |
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The impact is already apparent in Florida, West
Virginia, Pennsylvania, North Dakota and Iowa, states with the highest
percentage of people over 65. But it will soon become more widespread.
By 2030, nearly one American in five will be 65 or older. Fewer than one
in eight are elderly now.
An aging population will bring workforce shortages,
new pressure on the nations already shaky health care system and
declining state revenues. These and other looming policy challenges are
getting some notice at a series of state conferences being held in
advance of a White House Conference on Aging scheduled for December, but
so far there's little concrete action.
 "Very
few states have done the kind of planning that would even let them
become aware of what the needs are. I don't think there's any state that
has implemented a comprehensive action plan
States, even more than the
federal government, are faced with a lot of challenges in the immediate
future, and they tend to focus on those," said John Rother, AARP's
director of legislation and public policy.
Do the math, and the state financial outlook is
bleak. Income tax revenue will plummet because seniors' incomes usually
are lower. Sales tax revenue will decline because older people buy fewer
taxable goods.
As the percentage of older people increases, tax
breaks enjoyed by the elderly in most states (such as Massachusetts'
$500 property tax break for people 70 and older who earn less than
$13,000 a year if single and $15,000 if married) will also take a bite
out of tax revenues. Most affected will be states with the largest tax
breaks for older people -- Michigan, Kentucky, Georgia, South Carolina,
Hawaii, Indiana, Idaho, Oregon Wisconsin, Connecticut and Illinois,
according to a study by the Center on Budget and Policy Priorities.
The most obvious impact will come on state-provided
health care. Health care costs of older people are significantly higher
than for younger people. According to the Centers for Disease Control
and Prevention, one of every three U.S. citizens aged 65 years and older
falls each year. Older people are more likely to suffer depression. They
are the largest consumers of high-cost prescription drugs as an age
group. And a staggering 20 percent of newly diagnosed HIV cases occur in
Americans over 50.
Because many older people won't be able to drive,
their health needs also translate into transportation planning
challenges. Those who do drive pose another policy problem as they
increase in years -- motor vehicle-related fatalities are higher among
adults 75 years and older, compared with adults between 65 and 74 years
of age, the CDC said.
The aging of America will transform the economy.
Already there is a shortage of workers to care for the elderly. Pension
funds will be stressed with more payouts to retirees.
Aging will also take its toll on state workforces
where nearly 44 percent of employees are age 45 and older, according the
National Governors Association. Some state leaders, such as Virginia
Gov. Mark Warner (D), expect people to change their concept of
retirement and find a part-time place in the workforce.
States have only taken baby steps to prepare for
such challenges.
Nearly half the states have established Aging and
Disability Resource Centers so elderly residents can learn about ways
state government can help them. The National Association of State Units
on Aging, a non-profit association representing aging agencies, is
urging the federal government to fund the creation of even more of these
centers.
Twelve states have started fall-prevention
programs. Several states are promoting healthy living among the elderly
through exercise programs. West Virginia, for example, started a
statewide program to encourage senior citizens to increase their
physical activity by using a pedometer and getting involved in a walking
program. And Florida has launched a program to adapt physical
infrastructure to older people's needs. Under the program, communities
provide pedestrian-friendly neighborhoods, public transportation options
and accessible buildings.
Send your comments on this story to
letters@stateline.org. Selected reader feedback will be posted in
the Letters to the editor section.
Contact Kathleen Murphy at
kmurphy@stateline.org
 Funded
entirely by The Pew Charitable Trusts as a public service, Stateline.org
has published online every weekday except holidays since Jan. 25, 1999.
Stateline.org is an independent element of the Pew Research Center and
is based in Washington, DC.
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