Before 1995, elderly residents exceeded 15 percent of the population in only five states. It is estimated that by 2025, the elderly share will exceed 15 percent in every state but Alaska and California. What does this demographic change mean for state governments? As the number of elderly increases, and the percentage of individuals assuming the tax burden decreases, policymakers will need to determine how to allocate scarce resources across competing demands from various age groups.
"As the population and work force ages, state and local governments will have to examine how the growing number of elderly will impact the design and mix of services they offer, the funding sources they rely upon and the delivery channels they use to make the services available to their citizens," said Jessica Blume, National Managing Director, Public Sector,and a principal of Deloitte Consulting LLP.
The rise in the number of elderly citizens will drive changes in the composition of government services. Demand for many services that cater to the elderly will rise while, with fewer school age children, demand for education and youth and child welfare services in some states will fall.
"State leaders are going to have to step up to a new set of challenges, and a new way of delivering government services, to keep up with the changing demands and expectations of their citizens," says study author William Eggers, Global Director for Public Sector Research of Deloitte Services.
