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Offer more affordable retirement compensation for future work. State and local workers should be offered a starting pension as if they left government employment today. Moving forward, retirement savings should be contributed to an employee-managed savings account, similar to 401(k) plans used in the private sector.
Reduce cost-of-living, or COLA, increases for all retirees. Lawmakers have already changed COLAs for future employees. “Tier 2” retirees will receive a COLA equal to one-half of inflation, rather than the 3 percent compounded COLA that “Tier 1” retirees receive. Lawmakers should do the same for all state and local retirees.
Require government retirees to cover a majority of their health insurance premiums. State and local governments should ask retirees to cover a majority of their health insurance costs, just as government retirees in other states do. The state should also give local governments more flexibility in designing health benefits for retired workers."
Ironically for the OP, California is not one of the states facing a revenue shortfall for fiscal year 2017. Conservative paradise Texas is running a budget deficit this year, as are most states in middle America that are already propped up by federal money.
On the basis of its fiscal solvency in five separate categories, California ranks 44th among the US states and Puerto Rico for its fiscal health. California’s fiscal performance is weak across several categories. The state has between 0.67 and 1.44 times the cash needed to cover short-term liabilities. Revenues exceed expenses by 4 percent, producing a surplus of $250 per capita, but on a long-run basis California is heavily reliant on debt, with a negative net asset ratio of −0.40 and total liabilities amounting to 73 percent of total assets. Total debt is $118.17 billion. When valued on a guaranteed-to-be-paid basis, total unfunded pension liabilities are $756.67 billion, and other postemployment benefits (OPEB) are $29.05 billion. These three liabilities are equal to 46 percent of total state personal income.
States go belly up from things like high debt, no job growth, and high unemployment. And the liberal states of California and Illinois outperform conservative states like Texas, South Carolina, and Oklahoma in those areas.
Not true at all. First of all, no state has ever gone belly up. And your criteria ignore the single biggest issue which is unfunded pension plans.
But here is how the experts rank the state's fiscal health.
That is effectively a bankruptcy. Illinois' bonds would be down-graded to a point where they'd be worthless, and the only way to sell bonds would be to pay exorbitantly high interest rates on the bonds..
In recent times, CA and IL bonds have been rated the worst in the country.
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