California - with the second worst credit rating in the US after Illinois according to Moody's - has had it's pension debt revised upward to double what it was proclaimed to be by CalPERS.
"Employee retiree costs to date have been vastly underreported to taxpayers, according to Moody's. Governmental Accounting Standards Board (GASB) has established new rules to help prevent misreporting, and with the changes, new estimates put California's unfunded liabilities at nearly double the previous estimate."
The Economist notes that although the CA budget is nominally in surplus by $1.1B-$4.4B, in fact it owes the CalSTRS Teacher Retirement fund $4.5B every year for the next 30 years which would more than wipe out the surplus. The "surplus" is the budget analysts' estimate for the coming year. It is not cold hard cash, just a guess of the coming year's revenue.
The NY Times looks at all the states and notes the same about California as the Economist.
Moody's is looking at 30 California cities for possible credit downgrade including Sunnyvale and Santa Clara.
C.f., last paragraph at:
The Washington Post reports that Detroit is defaulting on it's debt and will only pay 10 cents on the dollar to bond holders and intends to treat pension and retiree health care as creditors like any other: