My personal opinion is that it's the pension formula that's the culprit. In PA they switched most new employees to a 401k without any pay increases. Cash flow for the retirement system doesn't seem to be a problem but when you plug in the "formulas" in for future retirees the system goes kablooey. That means more and more money has to go into the retirement system and less goes to actually running the school systems in PA, which leaves a lot of districts cash strapped and teachers paying out of pocket for basic supplies or begging parents to send their kids in with tissues, toilet paper and pencils. The bottom line is NO ONE KNOWS exactly how much any pension system has to pay out in 10, 20, 30 or more years into the future; you don't know how many pensioners are going to be withdrawing, paying in or how well the pension's investments will be doing. During the 1990's PA's Pension System was flush with money. The state, in all it's wisdom, decided to stop paying their share into the system. That decision left PA's pension fund in bad shape because of decisions to boost some pensions and consolidate all state workers, including the teacher pension system, which was not as well funded as the state worker pension. The end result was a system that swallowed more and more money and finally was nixed in the end (with no significant pay increases to offset the loss of a fixed pension or the state's savings in their pension obligations).
If it's any consolation, any state with a "bankrupt" pension system will not totally cut off it's pensioners, they will just get a reduced payment from what they were promised. There are still assets in the system, just not enough to pay the full amount promised. It's the same with Social Security. Bankrupt doesn't mean completely gone, just can't payout the promised payment (don't let them tell you otherwise).
= new reply since forum marked as read