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U.S. states in debt to the tune of $4 trillion

By Catholic Online (NEWS CONSORTIUM)
August 29th, 2012
Catholic Online (www.catholic.org)

According to a new study by an independent, non-partisan think tank, America's 50 states are collectively over $4 trillion in debt. According to the State Budget Solutions' third annual State Debt Report, aggregate state debt fell from $4.24 trillion last year to $4.19 trillion this year.

LOS ANGELES, CA (Catholic Online) - The calculations by the group include a state's regular debt, the fiscal year 2013 budget gap, outstanding unemployment trust fund loans, unfunded other post employment benefit liabilities along with the state's unfunded pension liabilities.

Not surprisingly, California led all 50 states in total debt, weighing in at $617 billion in unfunded liabilities.

Each Californian, on a per capita basis, faces $16,386 in state debt compared to just $11,117 owed by each Texan.

Altogether, the top five states in total debt burden where California, New York at $300 billion, Texas at $286 billion, New Jersey at $282 billion and New Jersey at $271 billion. The same five states held that ranking last year.

Vermont has the least amount of debt of all fifty states with a $5.8 billion state debt. North Dakota, South Dakota, Wyoming, and Nebraska follow Vermont with the smallest debt burdens in the country.

Unfunded public pension liabilities are the main drivers of state fiscal woes, accounting for $2.8 trillion of the shortfall. Other post employment benefits, including health care, account for another $627 billion in debt. California faces $398 billion in unfunded pension liabilities and alone.

In comparison to market-valued liabilities, traditionally calculated unfunded pension liabilities hide the true enormity of state debt obligations. Unfunded liability figures from the Pew Center on the States rely on much of the same data that states use to continually underfund their pension systems. While market-valued liabilities total $2.8 trillion, the latest traditionally calculated figures total only $760 billion in unfunded pension liabilities. Total state debt using these figures is still over $2 trillion, but a comprehensive view of state debt without accurately assessed public pension liabilities disguises the problem to the tune of as much as $2.1 trillion.

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