A group of researchers from Stanford University have painted an even bleaker picture of California’s public pension woes than the one formally being offered by state officials. In fact the state’s unfunded pension debt is skating dangerously close to $1 trillion, according to scholars at the Stanford Institute for Economic Policy Research. Their analysis is succinctly outlined by a new Pension Tracker research project which was launched last fall.
Joe Nation, former Democratic assemblyman and current head of the project, says he was surprised by the results of their study. Based on less optimistic calculations, which assume a smaller return on investments than the 7.5 percent used by pension trust funds, the state’s liabilities amount to $77,700 per household. That would make California the third worst in the nation for debt per household and put its total pension debt at $946.4 billion.
“Use of optimistic assumptions about rates of investment returns has obscured the cost and the risk to taxpayers,” said former San Jose Mayor and stalwart pension reform advocate Chuck Reed. “By using less-optimistic assumptions, PensionTracker shows the rest of the pension debt iceberg lurking beneath the water, waiting to sink the ship of state.”
That impending iceberg is also nicely broken down by local agencies on the tracker website. The City of Irwindale fares worst with public pension liabilities ranging from $32,447 to $137,907 depending on how the figure is calculated. The County of Alpine carries the second heaviest load, followed by Colma, Santa Fe Springs and San Francisco.
Read more about Stanford’s projections and navigate its nifty tracking website here.