California is notorious for its fiscal mismanagement, but even by the state’s own standards, the latest mishap to hit the Golden State is a doozy.

According to a new report from the Stanford Institute for Economic Policy Research (SIEPR), the state’s three major public pension funds-CalPERS, CalSTRS, and the UC Retirement System-face future unfunded liabilities of more than $500 billion.

The bulk of this shortfall exists because, as researchers believe, state officials have understated the size of future pension obligations by relying on rosy growth projections. Under a more realistic set of assumptions, the three pension funds face a likely combined shortfall of $425 billion. Add to that an estimated $110 billion in lost portfolio value, and California’s pension fund debt is almost “eight times greater than officially reported.”

CalPERS issued a response to the SIEPR study, which calls the report’s methodology into question and claims it uses “outdated data.” But even if SIEPR’s doomsday projections are only half-right, California taxpayers can expect to be walloped in the future in order to make-up for the huge pension shortfall.

For those of us on the outside looking in, California’s fiscal blunders serve as a powerful reminder of the consequences of governments gone wild.

– James Quintero