am wrote:Kind of worrisome with funding. But read that state constitution guarantees pension benefits and that they can not be reduced. So guess the state will go bankrupt over the pensions? And how did they get to this point? Faulty return assumptions and underfunding?
There are debates throughout the nation as to has the authority to do what in relation to pension issues. I wouldn't assume that anything is impossible. Formerly unthinkable things could become possible when no other option exists.
However, one thing seems to be absolute. Specifically, according everything I've seen on the issue, states (unlike municipalities) cannot
declare bankrupty, and thereby void a debt in the process. Moreover, there is really no such thing as a state "having no money" since new revenues arrive continuously. What can happen is that in any given week or month, the payments due could exceed the revenues, and the state govt would have to enact some sort of emergency funding mechanism to decide who will get paid first. California supposedly has such funding mechanisms in place because they have been on notice for some time that this could happen. For a while, CA issued IOUs to pay the recipients who were lower on the priority list. I haven't followed up to see what happened after that.