Illinois resorted to POBs because pension costs were quickly increasing. But instead of reforming the system, political leaders chose to paper over the problem with debt.

Illinois taxpayers and government workers got proof in 2013 that politicians can’t be trusted to manage public-worker retirements. That’s when the Securities Exchange Commission charged Illinois with securities fraud. Now, Kansas joins Illinois and New Jersey as one of three states to face SEC civil charges for misleading investors about the health of their pension...