Only Illinois has a greater ratio of unfunded state pension liabilities than Connecticut, if calculated as a percentage of all state liabilities, according to a new report from Republicans on the Joint Economic Committee of Congress (JEC).
Illinois lacks funding for 71.8 percent of its total liabilities, the JEC report found, with Connecticut next at 70.9 percent.
North Carolina and New York have done the best at meeting their future obligations, at 37.1 percent and 40.8 percent of their respective future obligations still unfunded.
“As more and more states come to the federal government for bailouts, taxpayers in fiscally sound states will grow increasingly frustrated and hostile toward the fiscally reckless states,” JEC Republicans stated. “This tension could lead to a severe divide between the fiscally responsible and irresponsible states, just as we are seeing occur in the Eurozone today.”
“The only way to prevent a federal bailout of state pension funds is for states to take action today to curb their underfunded and unsustainable pension systems,” they continued. “Enacting pension reform will not be easy, particularly in the states with the greatest unfunded liabilities, but if a federal bailout remains on the table, states will have no reason to impose fiscal discipline.”
