Retirement liabilities remain despite state budget surplus

The budget that Gov. Jerry Brown proposed this month marks a shocking financial turnaround for a state that just a few years ago faced a $26 billion deficit.

Despite a budget surplus, there’s a looming financial hurdle: Unfunded pension and health care liabilities of $220 billion for retired state and university workers.

As the Brown administration prepares to enter labor talks this year, the governor is seeking changes to help the state cut those liabilities.

Over the past four years, the Legislature moved to improve the financial outlook for the state’s largest public-employee pension systems. Brown is now setting his sights on health care for retirees, another rapidly growing retiree expense. He’s asking workers to take on a larger share of the burden.