on average. This would have to be raised to 5.0% to cover the $700 billion shortfall and around 9.0% to cover the $3 trillion shortfall. Certain states (e.g., Illinois, California, and New Jersey) have significantly underfunded their pension plans and would have to raise contributions towards 7–9% of their operating budgets, even under the more aggressive 8% discount rate assumption. States have significant time before the pension assets are exhausted. Sufficient funds are present already to pay obligations for the next 15–20 years, as many began funding their pensions back in the 1970s. The CBPP estimates that states have up to 30 years to address their pension shortfalls. States accumulated more than $3 trillion in assets between 1980 and 2007 and there is reason to assume they can and will do that again, as the economy recovers. Nearly all debt issued by a state (generally via bonds) is used to fund its capital budget, not its operating budget. Capital budgets are used for infrastructure like roads, bridges and schools. Operating budgets pay pensions, salaries, rent, etc. So state debt levels related to bond issuance and the funding of pension obligations have substantially remained separate issues up to this point. State debt levels have ranged between 12% and 18% of GDP between 1979 and 2009. During the second quarter of 2010, the debt level was 16.7%. State interest expenses remains a "modest" 4–5% of all state/local spending. Pension promises in some states are contractually binding. In many states, constitutional amendments are also required to modify them. Other states have different pension laws and policies. The pension replacement rate, or percentage of a worker's pre-retirement income that the pension replaces, varies widely from state to state. It bears little correlation to the percentage of state workers who are covered by a collective bargaining agreement. For example, the replacement rate in Missouri is 55.4%, while in New York it is 77.1%. In Colorado, replacement rates are higher but these employees are barred from participating in Social Security. In a 2022 report, Equable Institute found that the value of public teacher pension benefits have declined significantly in the last two decades, as states have opened new pension plans offering less generous benefits. An average teacher hired in 2005 can expect to receive approximately $768,000 in total lifetime pension payments, whereas the average teacher hired for the 2023 school year can only expect to earn