Thursday, October 27, 2011

California pension crisis tops the country’s debt at a whopping $612 billion

A new PEW study puts California at the top of the pension debt crisis with at least $612 billion in obligations followed by New Jersey at $183 Billion and Illinois with a $150 billion.

The shocking new PEW study projected the country is on the hook for approximately $2 trillion dollars for all states, says Capoliticalnews.

“Using the higher pension gap number, State Budget Solutions said California is in the biggest financial hole — with total debt of more than $612 billion. New York follows with $305 billion of debt, and then Texas, with total debt of $283 billion. Vermont has the lowest amount of total debt at just over $6 billion,” a story from Bloomberg reported.

California’s State Controller John Chiang explains California’s state pension crisis is causing big headaches for state politicians. According to the state’s latest money projections, “the State ended last fiscal year with a cash deficit of $8.2 billion. The combined current year cash deficit stands at $17.6 billion. Those deficits are being covered with $12.2 billion of internal borrowing (temporary loans from special funds) and $5.4 billion of external borrowing).”

When it comes to unemployment, 11.9 percent, California will borrow the most in the country to cover its unemployment benefit checks- $8.6 billion.

Keeping these financial concerns in mind California’s Governor, Jerry Brown will address state legislators on the pension tsunami flooding the state.

“Given the paramount importance of pensions to both taxpayers and public employees, it is absolutely critical that we carefully examine our current assumptions and practices,” Brown stated in a letter to Gloria Negrete McLeod (D-Chino), and Assemblyman Warren Furutani (D-Gardena). “We have to do our best to make sure that we have a system that is fair and truly sustainable over the long time horizon that our pension and health systems require.”

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© Copyright 2011 Kimberly Dvorak All Rights Reserved.

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