Despite boasting one of the highest per capita incomes in the country, San Jose, Calif., is running large and growing deficits. And on Dec. 6, the City Council is expected to declare a state of "fiscal emergency." The main reason is pensions and other benefits for retired city workers, such as health insurance.
San Jose's problems are severe, but hardly unique. In recent years, pension costs have become a central concern both in the U.S. and in Europe.