By Dan Walters
May 17, 2016 – 12:03 PM
- Pew Charitable Trusts pegged state’s debt at $344.7 billion
- Most of the debt was for future state employee pensions
- Unfunded health care and bonds made up the remainder
As a proportion of personal income, California had the nation’s 11th highest long-term state debt in 2013, a new report by the Pew Charitable Trusts says.
However, Pew’s three-year-old calculations, like other state-to-state comparisons, suffer from being based on the latest available official data, which are several years old.
Gov. Jerry Brown uses a chart to illustrate the unpredictability of taxable capital gains income as he announces his revised budget at the Capitol in Sacramento on May 13, 2016. Brown wants to hold down spending and direct extra revenues into reserves and paying down debt. Hector Amezcua firstname.lastname@example.org
The state’s debt could be relatively higher today, depending on how its unfunded pension liabilities are measured, or relatively lower, because personal income has been growing.
As of 2013, Pew says, California’s long-term debt for unfunded pension and health care benefits to state employees and conventional borrowing, mostly via bonds, was $344.7 billion, or 18.6 percent of $1.85 trillion in personal income.
That was 11th highest among the states, which ranged 52.9 percent of income in Alaska to 1.1 percent in South Dakota. Rival Texas had one of the nation’s lowest relative debt loads, just half of California’s.
As in most states, California’s pension debt, pegged at $170 billion or 9.2 percent of personal income, was its largest chunk. Unfunded retiree health care was $80.2 billion or 4.3 percent, and regular debt was $94.5 billion or 5.1 percent.
The state’s pension debt number, however, comes from the California Public Employees Retirement System and other state pension funds and is based on their official assumptions of future trust fund earnings, around 7.5 percent.
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