(A version of this article was originally published on NAPA Net by author.)
Many states have underfunded pension plans for state and local municipalities estimated to be over $4 trillion nationally which will likely result in greater tax liabilities and less service – probably both. Illiniois, Rhode Island and New Jersey have made headlines as they governors struggle to balance priorities, not to mention their budgets. California was thought to be doing better but Governor Brown and his constituents woke up to a sobering headline.
According to a new website, Pensiontracker.org, developed by Stanford professor Joe Nation, the unfunded pension liabilities in California will cost each state household $75,000 as of 2013 or almost $1 trillion. Users can filter by county, state and special district to find data based on comprehensive sources and analysis including CalPERS, 63 independent pension systems, state agencies and the US Census Bureau. It does not include the teacher or university systems.
It is difficult at times to trust that the research created by the industry or supposedly independent groups funded by the industry does not have some hidden agendas, even if it’s in the way the data is presented or the questions are framed. That’s why many people only trust independent academic studies where the researcher has more to lose if the methodology is questionable or tainted. So the Stanford California Pension Tracker is important to under the real situation that the Golden state finds itself and hopefully other states so we can start trying to deal with the problems rather than kick the can down the road.
Contributors to the research included William Sharpe; 2014 and 2015 results are due out soon. Probably will not be as sunny as the weather but likely a better report than citizens of NJ, RI and IL – without the good weather.
