Analyst says California faces $340 billion in debt

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Updated: 5/07 2:26 pm

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.

©2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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