"The data shows a troubling trend of mounting public debt, particularly public employee compensation debt," stated David Kersten, president of the Kersten Institute.
"Pension and retiree health care debt obligations cost the State of California about $10 billion annually, yet the state's unfunded liabilities continue to mount due major issues with actuarial projections and an inability by the State Legislature to fully fund these debt obligations on an annual basis," Kersten stated, noting that total state debt for the pension and retiree health care liabilities is currently pegged at $139 billion.
The state has another $88.5 billion in outstanding bonded debt, which costs the state $7.9 billion annually as of 2015-16, Kersten said.
"The grand total for outstanding debt in the State of California is $227.3 billion for these three categories which represent the vast majority of public debt. The state's total General Fund revenues were $113.4 billion in 2015-16--so it has a lot of work to do if it wants to retire this mounting debt load," Kersten said, noting that on an annual basis the state pays $17.56 billion for these obligations, which represents about 15% of State General Fund spending and growing.
David Kersten is an expert in public finance and serves as an adjunct professor of public budgeting at the University of San Francisco.