76 pages. "A model GAO developed to simulate the fiscal outlook for state and local governments indicates that, for the sector as a whole, [1] estimated future pension costs (currently about 9 percent of employee pay) would require an increase in annual government contribution rates of less than a half percent, and [2] estimated future retiree health care costs (currently about 2 percent of employee pay) would more than double by the year 2050 if they continue to be funded on a pay-as-you-go basis. Because the estimates are very sensitive to the assumed rates of return and projected rates of health care inflation, the model also indicates that if rates were to fall below historical averages, the funding requirements necessary to meet future pension and health care costs could become much higher." [GAO-07-1156, published Sept. 24, 2007, released Oct. 24, 2007]