Elizabeth MacDonald | California’s Pension Crisis About to Get Worse

A growing number of key California cities are a lot worse off than previously  thought, thanks to new changes coming in the way state and local governments  must account for their pension costs.

The pension changes from Moody’s, and separately the Governmental Accounting  Standards Board, scheduled for this month, could result in Los Angeles, San  Francisco, San Jose, Azusa and Inglewood joining fiscally troubled Stockton and  San Bernardino, among others, as severe credit risks. It’s all largely due to  soaring employee retirement costs, according to new analysis based on the  methodology by Bob Williams and his team at State Budget Solution (SBS), a  non-partisan organization that studies state budget crises.

The new rules could  nearly double California’s unfunded liabilities to $328.6 billion. Moreover,  California cities that have already filed for bankruptcy protection, like  Stockton and Vallejo, will fall deeper into the red.

Officials in these California cities did not return calls for comment.

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