A fundamental change in the way public employees are rewarded is about to take place. It will take tough-minded decision-making on the part of the employer, and a new level of flexibility on the part of public unions.

It's an issue that must be dealt with now, and in the right manner, before it reaches a crisis point.

The issue has its roots in a generous system of guaranteed benefits for public workers that drew many of the state's best and brightest into government work over the decades.

Unwisely, elected policy-makers have tended to avoid the reality of these generous benefits by dealing with their obligations on a pay-as-you-go basis. That is, when someone retired or claimed post-retirement medical benefits, the bill was paid using current resources.

Unfortunately, there was no detailed accounting of the long-term obligation faced by the state and the counties.

That's changing, now that the organization that sets accounting rules for municipalities and states has produced new standards, and rightly so. The books must now show not just the current year's obligation, but also future liability.

In Hawai'i, where government workers are entitled to generous lifetime health benefits after retirement for themselves and their dependents, this adds up to billions of dollars. If that accounting obligation is not properly recognized, the state or county bond rating will suffer.

In a small effort to bring the situation under control, new government employees receive less generous retirement benefits than those who came before. They must now work 25 years to qualify for full benefits rather than 10 years, as in the past. And workers hired after June 2001 will no longer see their dependents covered by health benefits when they retire.

But that is hardly enough. The state and the counties will have to begin setting more aside for future benefits, taking dollars away from current needs, as well as further restricting the benefit package for new hires and even current retirees.

None of this will be popular, or easy.

For too many years we have operated on the theory that this is tomorrow's problem. Well, tomorrow is now upon us. The prudent, but painful, choice is to begin setting aside the money we owe today, and rethink the cost and size of government.