It’s no secret that state public pension systems across the country are in bad shape. A failure to make required contributions coupled with unrealistic assumptions about investment returns has left many systems severely underfunded. A new report from the American Legislative Exchange Council (ALEC) examines state pension systems from a variety of angles and finds that the view is always the same—looking over a cliff.

Any analysis of state pension systems needs to clearly establish a baseline. The ALEC study reports the current state of pensions in three ways: unfunded pension liabilities per capita, unfunded liabilities as a percentage of gross state product (GSP), and pension funding ratios. While all three are useful, unfunded liabilities as a percentage of GSP give us the best idea of a state’s ability to pay.

For example, suppose two people each owe $25,000 on a car but one earns $100,000 per year and the other earns $50,000. They both have the same liability, but all else equal, it will be easier for the person making $100,000 to pay off the loan. Similarly, two states may have the same pension liabilities per capita, but if one state has a much larger economy it should be easier for that state to make its promised payments. The table below shows unfunded pension liabilities as a percentage of GSP for all 50 states.

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