The already tattered reputation of my home state of New Jersey took another pounding today following revelations that the SEC and the U.S Attorneys office is investigating the state's $80 billion pension system for misleading investors about billions in funding shortfalls.

As Bloomberg News notes, the problem dates the bull market of the 1990s when the state pension fund moved to an accounting method based on the market value of investments which boosted the value of the pension fund as stocks soared and allowed officials to reduce payments. Of course, things went awry when the bull market crashed.

New Jersey has begun contributing again to the pension system under Gov. Jon Corzine, putting in $1 billion during the last fiscal year with plans to contribute more, Bloomberg says.

The SEC is considering strengthening rules governing the municipal bond market, so it's likely that other pension funds will get scrutinized.

But other states will be hard pressed to top NJ in terms of financial shenanigans. The Star-Ledger reports that New Jersey has skipped $8.1 billion in payments for the pensions for hundreds of thousands of current and retired workers including police, firefighters, government workers and teachers since 1997.

They certainly deserved better from our leaders in Trenton.