Prop 13 problem - the guys who live on the other side of the country nailed this one
http://www.latimes.com/news/opinion/commentary/la-oe-fritz-pension-reform-california-20120626,0,1584148.story?dssReturn
According to Stanford's Institute for Economic Policy Research, even if it's assumed that pension fund investments perform reasonably well, the unfunded liabilities of California's largest state and local pension systems stand at about $500 billion. One intrepid reporter did the math: that amount of pension debt amounts to $30,500 for every household in the state.
Largely because of that debt, pension costs are the fastest-growing expenditure for city and county governments and will consume 17% of city budgets this year. Again according to Stanford, pension costs grew 11.4% a year between 1999 and 2010, twice the spending growth rate for education, public safety, parks, health and sanitation. While other services are cut, pension costs go nowhere but up.