A water shortage isn't the only crisis facing the Golden State.
"California is a cautionary tale for taxpayers in the rest of the country," Stephen Frank, publisher of California Political News and Views, writes on Watchdog.org.
"The people of California are being burdened by an unsustainable, unfunded liability – a $1 trillion dollar government pension system. At the end of the day under California law, the taxpayers will subsidize the shortfall in the budget."
Ouch, and that's not all.
"Besides this debt, California has a debt of $340 billion–and that debt stands to be increased by some of the proposals within the state’s 2016 ballot measures. California is in economic collapse: while tax revenue increases, the policies to kill off the state are in place and beginning to take effect," Frank says.
And what created the trouble?
"This problem was caused by politics and politicians," Frank argues. "It will be solved by the right kind of politicians, those that are fiscally responsible."
As for pensions, there's trouble in the private sector too.
The aggregate funded status for the largest 100 defined benefit pension programs among publicly traded companies dropped to 81 percent as of Dec. 31, 2014 from 89 percent a year earlier, according to a study from consulting firm Towers Watson.
With the funds' obligations standing at $1.33 trillion last year, compared with assets of $1.08 trillion, the funds faced an aggregate deficit of $248.2 billion.
"While plan assets gained value, falling interest rates coupled with updated mortality assumptions [which reflect increased life expectancy rates] significantly increased liabilities, thus wiping out most of the previous year’s gains," the study states.
"Sponsors are not yet out of the funding hole dug by the 2008 financial crisis."
Meanwhile, many plan sponsors have cut their investment risk during the past five years by gradually shifting asset allocations from stocks to bonds and alternative investments, the study says.
To be sure, some would question whether alternative investments, which include hedge funds, private equity and real estate, lower investment risk or increase it.
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