Even as they grapple with budget pressures from a sagging national economy, states are being forced to make tough decisions on how they will cope with an even more severe longterm fiscal concern: a projected price tag pushing $3 trillion to pay the pensions and health insurance of retired teachers and other government employees. Those commitments…

School business officials kept a close watch on the financial markets this week--and on district investment portfolios and teacher-retirement funds--as stock prices gyrated and once-sound institutions got government bailouts or crumbled into bankruptcy. While financial observers said it was too soon to predict how Wall Street's upheaval might…