Cut up the credit cards: states have $5 trillion in debts taxpayers will have to pay

Cut up the credit cards: states have $5 trillion in debts taxpayers will have to pay « Watchdog.org

Coast to coast, states are leaving taxpayers on the hook for massive debt payments over the coming decades as state governments continue to abuse their metaphorical credit cards.

A new report released this week says state governments have more than $5.1 trillion in debt, largely because of pension obligations to former and current state employees, which states now lack the assets to pay off. Pension debt accounts for more than $3.9 billion of that total, but the report also includes outstanding bonded debt, unemployment compensation trust fund debt and debt in the form of “other post-employment benefits,” or OPEB, which is closely linked to pensions and includes retired public employees’ health-care costs.

BLAME THE PENSIONS: The majority of state debt is the result of public employee pension obligations, which most states lack sufficient resources to pay.

Though the totals vary significantly from state-to-state, it adds up to an average of more than $16,000 of debt for each man, woman and child in the United States.