Raleigh, N.C. — State Treasurer Janet Cowell said Monday that North Carolina risks losing its high bond rating unless lawmakers adequately fund the state pension funds.

The funds lost $17 billion in value last year as the stock markets declined, and they began 2009 valued at $60 billion. Cowell said the funds have enough money to make payments to retired state workers and teachers.

Last month, however, she called on lawmakers to put $358 million into the system over the next two years to make up for the losses and for years of small state contributions.

Gov. Beverly Perdue included $42 million for the pension funds in her proposed budget.

"We sort of need to dial up the heat a little bit and have them understand that their crown jewel of fiscal stability is fragile," said Cowell , who is scheduled to speak Tuesday to the Senate Appropriations Committee.

North Carolina has prided itself on the fact that its pension funds are fully funded, but she said the funding level could drop from 100 percent into the 90 percent or 80 percent range because of the recession's impact.

"It's strong if you take action. If you do not take action, the funding of this system and the stability of this system will erode quickly," she said.

The state contributed 8 to 10 percent of annual payroll to the retirement system in the 1980s and 1990s. In recent years, that contribution has been between nothing and 3 percent because investment gains covered the system's obligations.

"The problem is, for eight years, there was neglect, and our cries for more funding were not heeded," said Ardis Watkins, legislative director for the State Employees Association of North Carolina. "When the economy turns around, there's no question we expect that there will be no more neglect."

Cowell said that, even if the state had contributed more money in recent years, making up the 2008 losses would still require "aggressively higher contributions."

Keeping the pension fund healthy is part of a financial plan that gives the state its high bond rating, she said. Withholding contributions, combined with quick fixes like state employee furloughs and cutting reserves, could hurt North Carolina's ability to borrow, she said.

"If you don't aggressively fund this pension plan, we will very rapidly start down a slippery slope," she said.