As Gov. Rod Blagojevich takes office, the deficit has grown to $1.4 billion, despite a $1 billion cash infusion six months earlier. Blagojevich and the Democratic General Assembly would put together a budget that included one of the largest spending increases in state history. To pay for that, money was used from the pension system.
This tactic, which is repeated in subsequent years, harms the state. Between 1985 and 2014 pension unfunded liabilities grew by $97 billion. Benefit increases accounted for about $8 billion. The state’s failure to properly fund the pension system, however, accounts for 49 percent, or ($47 billion) of that growth. The rest is due to decreased earnings from pension investments.