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Judge: Pension reform law unconstitutional

November 24, 2014

pension-reform[1]Northern Public Radio reports the following: An Illinois judge has ruled that a law intended to fix the nation’s worst state employee pension crisis violates the state constitution. On Friday, Sangamon County Circuit Judge John Belz ruled in favor of state employees and retirees who sued to block the state’s landmark pension overhaul.

The focus of the opposition is a clause in the Illinois Constitution that calls the state pension systems an “enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

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

Governor-elect Bruce Rauner issued the following the statement about the ruling:

“Today’s ruling is the first step in a process that should ultimately be decided by the Illinois Supreme Court. It is my hope that the court will 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.”

The pension law in question curbs annual cost-of-living pension increases for current retirees and delays the age for retirement for many current public workers. Plaintiffs in the case say the law clearly violated the constitutional protections.

Gino DiVito, an attorney who represents retired public school teachers, says the law breaches a guarantee that pension benefits not be diminished.

“There’s no question in my mind that the statute is unconstitutional, and it should be found to be unconstitutional,” he said.

The state argued that Illinois’ financial situation is so bleak — in part because of pension debt — that it’s an emergency. A house-is-burning, break-the-windows kind of emergency.

Lawyers for the state said the Illinois Constitution considers membership in a pension system to be contractual relationship between the state and its workers. And contracts can be modified in extreme emergencies.

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

The state is expected to appeal the ruling directly to the Illinois Supreme Court. 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.

Amanda Vinicky of Illinois Public Radio contributed to this report.