I think there's a consensus (among the very few people interested enough to pay attention to public pension finances) that there were some serious mistakes made in the last decade in pension sweeteners that are not financed by recurring revenues -- that is, some school disticts gave their beloved principal a pay raise of $40 grand for a few years so that the retired principal can spend his days in Key West drawing a much larger pension from the state for the next two or three decades. Similarly, lots of other groups got sweet pensions (that are completely tax free from the 3% income tax, by the way), that are financed by general taxpayers in 2020 or so. Meaning, we don't have the money to buy teachers or social workers or university profs. We just have the money to send to retired people.
The problem is that the 1970 Illinois Constitution prohibits the General Assembly from fixing past mistakes (and certainly every one would concede that mistakes in making pensions too large were made -- and we are all paying for those unjustified moves now).
A solution would be a constitutional amendment to permit the General Assembly to adjust pension benefits. That would appear on the November 2006 ballot, and let the people decide whether we'd rather trust the current General Assembly to finance our pensions or whether we should be locked into the decisions of General Assemblies long gone.
Another solution would be to tax pension income and put all that money back into the pension system. If we think current pension benefits are too high for some classes of people, then we can recapture some of that money (at least 3% of it) and direct it into the pension system. Seems fair to me.
Anyway, I think Governor Blagojevich deserves credit for taking pension funding on directly. I don't see how it is financially prudent to capture the savings ($850 million or so) this fiscal year, but it seems rather unfair to call the Governor irresponsible for taking those pension savings if the one making the critique isn't willing to curtail the pensions and create any savings at all.