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Judge Finds Reductions in Illinois Pension Benefits Unconstitutional

Wiki Commons

An Illinois judge has ruled that a law intended to fix the nation's worst-funded state employee pensions violates the state Constitution.

Sangamon County Circuit Judge John Belz issued the ruling Friday in favor of state employees and retirees who sued to block the state's landmark pension overhaul. 

At issue was whether lawmakers defied the Illinois Constitution by passing a law that reduces state workers', public school teachers' and university employees' retirement benefits. 

The state argued Illinois' financial situation is so bleak — in part because of pension debt — that it's an emergency. A-house-is-burning, break-the-windows-style emergency. Lawyers for the state said the Illinois Constitution considers membership in a pension system to be contractual relationship. And contracts can be modified when there's an emergency.

Attorneys representing unions and retirees said Illinois' Constitution is unambiguous when it says pension benefits "shall not be diminished or impaired."

Attorney General Lisa Madigan said she would appeal the decision to the Illinois Supreme Court. "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,” Madigan said in a statement. 

The overhaul was approved by lawmakers and Democratic Gov. Pat Quinn last year. Years of under-funding had put the state's pension systems roughly $100 billion short of what they need to cover benefits promised to employees. 

Gov.-elect Bruce Rauner issued a statement saying he hoped the Supreme Court would take up the case and rule as soon as possible. "I look forward to working with the legislature to craft and implement effective, bipartisan pension reform," Rauner said.