California debt now running closer to Italy and Portugal, new study finds

California debt now running closer to Italy and Portugal, new study finds

For Immediate Release

January 11, 2017

California Policy Center

Marc Joffe,

(415) 578-0558

A landmark study of California’s finances reveals the state’s debt burden is approaching the levels of Italy and Portugal, where debt crises in 2011 and 2012 drove the Eurozone countries to the brink of collapse. The findings come a day after Governor Jerry Brown predicted that the state would end the year with a sizable deficit.

California Policy Center researchers Marc Joffe and Bill Fletcher determined that California state and local governments owed $1.3 trillion as of June 30, 2015. Pensions and health benefits paid to retired state workers make up more than half of that debt.

CPC’s analysis is based on a review of federal, state and local financial disclosures. The total includes bonds, loans and other debt instruments as well as unfunded pension and other post-employment benefits promised to public sector employees.

“Our estimate of California government debt represents about 52% of California’s Gross State Product of $2.48 trillion. When added to the state’s share of the national debt, we find that California taxpayers are shouldering debt burdens on a par with residents of peripheral Eurozone states,” they write.

Read CPC’s full study here.

Other key points in the California Policy Center study:

  • Not included in the debt calculation: billions of dollars in deferred maintenance and upgrades to California’s infrastructure. “To the extent California’s government has not maintained investment in infrastructure maintenance and upgrades to keep up with normal wear and to keep pace with an expanding population, it has passed this cost on to future generations who will have to issue additional debt to pay for this expense.”
  • More debt has been added since the June 30, 2015 analysis date. Governments at all levels issued $72 billion in new debt last year.


The California Policy Center is a non-partisan public policy think tank providing information that elevates the public dialogue on vital issues facing Californians, with the goal of shaping more equitable and sustainable management of California’s public institutions. Learn more at

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