The department of finance has said California’s debt was paid down to less than $28-billion (U.S.). But that doesn’t include government employee pension and health benefits that have been promised but not funded. Stanford University estimates that unfunded pension liabilities are as much as $497-billion.
Meantime, a report by the Pew Center suggests that unfunded state retiree liabilities are $77-billion and growing. Most agree that until California deals with these two areas, it will only be pecking away at its monstrous fiscal challenges. It’s difficult to imagine state legislators not having to deliver some extremely unpleasant news to tens of thousands of government employees in the coming years.
Despite its financial woes, California continues to talk about a high-speed rail line between Los Angeles and San Francisco that would cost tens of billions. On another front, the state ruled against allowing fracking for oil and gas despite having the largest shale deposits in the country. Many believe this one move alone could have helped release California from the grips of financial despair.