Underfunded Pensions

From The Illinois Business Roundtable (a voluntary association of 63 chief executive officers of Illinois' leading businesses, formed in 1989 to study, make recommendations, and take action on critical public policy issues facing Illinois. The Roundtable is nonprofit and nonpartisan.): ILLINOIS PENSION FUNDING: THE CONSEQUENCE OF FUNDING DEFERRED. See also Illinois Republican Project. At the end of May last year,

Gov. Rod Blagojevich and his fellow Democrats in the Legislature cut the state's pension payment by $2.3 billion over two years to balance the state budget and free up cash to hike state spending.

In a scenario akin to paying just half the principal portion of mortgage payments for two years and building that principal into the back end of the loan, the move dramatically expanded the state's pension debt.