Maine has done an excellent job funding its pension system and is in far better shape than it was in the mid-1990s. The state’s non-pension benefits are significant, however, and its pay-as-you-go costs are rising rapidly. These benefits—principally health care—were 6.7% of payroll for current retirees in fiscal year 2007, but will rise to 11.2% of payroll in fiscal year 2016, according to state figures. To fully fund its non-pension benefits, Maine’s annual payment would be about two and a half times the current costs, according to the state’s actuaries. But moving in that direction would be smart fiscal practice. Consistently funding this amount would reduce the state’s total long-term liability of $4.7 billion (for state employees and teachers) to $3.2 billion, because the interest the state is likely to earn when it invests more money over the long term can be applied to paying down the bill.