- State government pension systems are now showing a funding deficit of $1.4 trillion, an all time record deficit.
- This financial hole was highlighted in an analysis recently completed by Pew Charitable Trusts.
- This deficit has kept rising despite us being in an economic growth mode for about nine years.
- The states now have only $2.6 trillion in assets but are facing pension liabilities for government workers of about $4 trillion.
- According to Pew: "Many state retirement systems are on an unsustainable course, coming up short on their investment targets and having failed to set aside enough money to fund the pension promises made to public employees."
- Which means that either local and state taxpayers are going to have to pay a lot more to cover the promises their politicians made to government employees and unions or pensioners from government work are going to see a sizable reduction in their benefits, or both, two very unpleasant outcomes, courtesy of your American political class.
- While some states are not in too bad shape, having funding levels at least 90% or more of their liabilities, some states are in horrid shape.
- At least 22 states had less than two thirds of what they need to fund pensions with Kentucky and New Jersey at an amazing 31% level, i.e. they need more than three times in assets than they have to cover pension liabilities.
- Some Californians do not want to stop at two states, they want the state to break up into three separate states.
- An effort to such an effect has garnered enough signatures to qualify for a place on the ballot in California in November.
- The leader of this three state solution, Tim Draper, says that his backers have enough signatures, over 600,000, to submit the petition for three states to election officials.
- Only 365,880 signatures were required so his effort far exceeded the minimum number of people needed to sign on for the ballot access process.
- According to Draper: “This is an unprecedented show of support on behalf of every corner of California to create three state governments that emphasize representation, responsiveness, reliability, and regional identity.”
- One new state would consist of Los Angeles, Ventura, Santa Barbara, San Luis Obispo, Monterey and San Benito counties, a second state would consist of Orange, Riverside, San Bernardino, San Diego, Imperial, Kern, Kings, Fresno, Tulare, Inyo, Madera and Mono counties, and the third state would include the the remaining 40 counties in northern California.
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