Unfunded liabilities are promises that the state has made to people over the future but has little money to pay for them at present. Think of planned construction of new infrastructure such as roads and pensions for retiring state workers.
While estimates vary as to the actual amount of unfunded liabilities, they range in the hundreds of billions of dollars. The nonpartisan Legislative Analyst's Office concluded three years ago that taxpayers owe more than $200 billion in these liabilities. The nonpartisan Stanford Institute for Economic Policy Research found that we are on the hook for $500 billion in state worker pensions alone.