Pension plans of retired college professors and staff typically include some wildly optimistic investment expectations, and states are on the hook for compensatory payments when those expectations [surprisingly] do not materialize.
This is not limited to education pension funds, public sector or prison guard pension funds typically negotiate the same deal, very frequently with people they themselves have helped get elected, so you know those negotiations are extremely tough.
In almost all states, the money has gone to Medicaid. In Virginia (which I know well), the money also went to build a bunch of prisons in the 80's and 90's. But, if you look at the distribution of state budgets over the past 40 years, health care expenses and prisons have been the growth areas.
Does this mean that education budgets for the states has had cuts in the last 16 years? Where is that state money saved going?