Illinois pension law struck down by judge

A Springfield judge on Friday struck down a state law aimed at fixing Illinois’ $100 billion government worker pension system.

The decision puts a union legal challenge on track for a likely showdown in the Illinois Supreme Court.

Sangamon County Circuit Court Judge John Belz agreed with public employee unions and retirees who challenged the December 2013 law and issued a summary judgment ruling it violated the Illinois Constitution’s pension protection clause.

Belz wrote that the law was “unconstitutional and void in its entirety.”

Under the state constitution, public employee pension benefits are a contractual obligation that cannot be “diminished or impaired.”

Reaction was swift in coming in from various Illinois leaders.

“Today’s ruling is not unexpected. I strongly urge both parties to seek an expedited review of today’s decision before the Illinois Supreme Court. The legislature needs certainty on this important issue sooner rather than later,” Jim Durkin, House Republican Leader, said.

The Office of Attorney General Lisa Madigan issued the following statement in response to the Sangamon County Circuit Court’s ruling:

“We plan to immediately appeal the decision to the Illinois Supreme Court so that we can obtain a final resolution of these important issues and allow the Governor and General Assembly to take any necessary action. We will ask the court to expedite the appeal given the significant impact that a final decision in this case will have on the state’s fiscal condition.”

Belz ruled the constitution’s language is clear and unambiguous. “The court finds that, on its face, the act impairs and diminishes the benefits of membership in the state retirement systems in multiple ways,” Belz wrote.

The law was intended to scale back annual cost-of-living adjustments for current and future retirees and set longer retirement ages.

Gov. Pat Quinn’s administration issued a statement urging the state’s high court to “take the matter up as soon as possible.”

The Illinois Supreme Court in a 6-1 decision in July ruled unconstitutional a law attempting to force public retirees to pay for what had been state-subsidized health care benefits. The court ruled those benefits were protected under the constitution’s pension clause.

But the changes enacted in the law drew immediate condemnations and lawsuits, including from the We Are One Illinois coalition that includes the Illinois AFL-CIO, the American Federation of State, County and Municipal Employees, the Service Employees International Union, the Illinois Federation of Teachers, the Illinois Education Association and other public unions.

Republican Gov.-elect Bruce Rauner had maintained the Quinn-backed law was unconstitutional. At the Capitol Thursday, the incoming governor said he hoped the high court would give guidance on what would and would not meet constitutional muster, the Chicago Tribune reported.

Democratic state Sen. Kwame Raoul of Chicago, who led a legislative pension panel, said the legal battle is not over.

“Today’s ruling sends yet another signal that – as I have always maintained – our constitution does not allow state government to run roughshod over contractual rights, even in times of great financial hardship. The judicial evaluation of last year’s compromise pension reform plan is far from complete, and I await the guidance of the Illinois Supreme Court,” Raoul said in a statement.

Ty Fahner, president of the Civic Committee of The Commercial Club of Chicago, said, “The finding of any lower court is significant, however, only the determination of the Illinois Supreme Court will resolve the constitutionality of the pension reform law.”

In October the Civic Committee of The Commercial Club launched its “What If?” initiative to encourage discussion about the drastic consequences to Illinois and its residents if the state Supreme Court overturns the bill. The “What If?” initiative identifies some of the harsh realities that the committee says could result from overturn of the pension law, including:

· $145 billion in higher taxes and service cuts over 30 years

· Highest property taxes in the nation

· 41¢ of Big Three state tax dollars devoted to pensions, up from 8¢ in 2007

· A possible $2,500 tuition spike at the University of Illinois

· Severe cuts to K-12 education, leading to as many as 13,000 teacher layoffs

· Critical meltdown of social services, including the end of child care for 41,000 kids and 21,000 seniors losing in-home care

There were others in support of the ruling.

State Sen.r William Delgado, D-Chicago, applauded the decision.

“I stood opposed to this measure from the very beginning, it posed a break in the trust between legislators and constituents,” Delgado said. “This legislation was morally corrupt and only robbed benefits from hard-working people.”

While the bill was being debated on the floor of the Illinois Senate, Delgado denounced the bill for the detrimental implications it could have for state employees. The measure would have diminished retirees Cost of Living Adjustments, increased the retirement age for current employees and delayed the COLA for future retirees for up to five years.

 

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