According to recent data published by Truth in Accounting, the state of California is currently carrying more than $20,000 in debt for each taxpayer.

With the Golden State being one of the largest and most populous states in the country, along with its notorious reputation for high taxes, it’s not hard to see why this is such a shocking statistic.

If something is not done to reverse this newly identified situation, the problems that could arise across the state of California are astronomical. Let’s take a closer look at some of the possibilities.

Unfunded Pension Plans Collapse

One of the most significant contributors to California’s debt problem is drastically underfunded state pension funds. Not having the monetary reserves to fund those pension accounts adequately puts a massive strain on the system, which will only worsen as this problem evolves.

Should the state reach the point where it faces some form of bankruptcy, it is not out of the realm of possibility that it could default on those pension fund payments, leaving millions of retired Californians without the retirement income they are counting on.

Essential Services Face Budget Cuts

If this debt crisis continues to evolve, we could also see essential services like police, firefighter, and paramedic operations face devastating budget cuts. The result of that will be a shocking absence of first responders at a time when we need them more than ever.

Crime Rates Increase

It isn’t a giant leap to see that a lack of budget funding for emergency personnel could create a void that would instantly be filled with criminal activity. If California has to cut back on its police force, there is a good chance that the criminal element will thrive across the state.

State Officials Raise Taxes

One of the only ways to counteract a growing debt problem is raising taxes and bringing in more money to pay down those debts. The problem is that California already has one of the highest tax rates in the country, and there is only so more the state can ask of its residents.

Businesses Move to Friendly States

Should the crime and taxes rates both increase on account of the state’s debt crises, there is no limit to the number of businesses that might decide to pack up their operations and move to a more friendly state. If that happens, it is precisely the type of thing that could exponentially increase the downside for residents of California.

On their own, any of these five possibilities could be a severe problem. But since they feed off each other, there is a good chance that one or more of them could happen in unison, which would be a recipe for disaster here in California.

This might sound like a lot of doom and gloom, but it is also entirely possible given that California has a growing debt problem. If you would like to do something about that, make sure that you contact your local representatives and let them know how you feel.

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