SACRAMENTO, Calif. (AP) - A new report says California state government faces $340 billion in debts, or more than $8,500 for each resident.
The nonpartisan Legislative Analyst's Office said Wednesday that the state should set priorities for paying down its key long-term liabilities.
It first should address the $74 billion shortfall in the teachers' retirement system, a debt that could cost $5 billion a year to resolve.
Paying down the $65 billion shortfall in health benefits given to retired state employees and their dependents should come next. That could cost the state nearly $2 billion a year.
The report comes a month before the Legislature must send the state budget to the governor. It feeds debates over whether California should spend or save its budget surplus and how to create a rainy day fund.