States are $1.26 trillion in the hole when it comes to their pension and retiree health obligations, according to a report released Tuesday.
And taxpayers are ultimately on the hook for this shortfall, which soared 26% in one year.
The Great Recession has wreaked havoc on states' pension and retiree health systems, the Pew Center on the States found. The report covers fiscal year 2009, which began July 1, 2008 in most states.
States are largely responsible for this predicament. As tax revenues plummeted, many skipped part or all of their annual retiree benefits contributions as they struggled to pay for education, Medicaid and other services.