California’s $1 trillion bill
Californians’ liability for state workers’ pension costs finally is coming into view, and it is enormous.
Thanks to new accounting rules, the annual state financial report for the first time revealed the true size of the bill — $63.7 billion. Without action by the Legislature, pension and even larger retiree health care obligations could exceed $1 trillion and spark a statewide financial crisis.
Last year, the net pension obligation was pegged at $3 billion, although it was well known to be much bigger. Its size — and potentially devastating future effect on state services and credit worthiness — was hidden by old reporting rules that required only the Comprehensive Annual Financial Report to include the pension plan for judges and a now-closed plan for legislators.
This year, under the new rules from the Governmental Accounting Standards Board designed to spotlight long-term liabilities, the report swept in the state’s two big pensions plans: the California Public Employees’ Retirement System and the California State Teachers’ Retirement System.
full: http://www.sfchronicle.com/opinion/editorials/article/California-s-1trillion-bill-7225026.php?t=49a7ebf12f00af33be&cmpid=twitter-premium
