Judge rules Illinois' pension law unconstitutional
SPRINGFIELD, Ill. (WLS) -- An Illinois judge ruled a law intended to fix the nation's worst state employee pension crisis violates the state Constitution.
Sangamon County Circuit Judge John Belz ruled Friday in favor of state employees and retirees who sued to block the state's landmark pension overhaul.
The state is expected to appeal the ruling directly to the Illinois Supreme Court.
Lawmakers approved the measure, which would have risen the retirement age and reduced the cost-of-living benefit, about a year ago. Years of underfunding had put the state's pension systems roughly $100 billion short of what they need to cover benefits promised to employees.
Public employee unions challenged the measure under the Illinois Constitution's Pension Protection Clause.
"The constitution is very clear in Illinois. It's unambiguous. It says you can't diminish or impair pension benefits," Dan Montgomery, Illinois Federation of Teachers, said.
The law reduces benefits for retirees, but also reduces employee contributions. The lawsuit argued that the Constitution prohibits reducing benefits or compensation.
The state had argued that pensions can be modified in times of fiscal emergency. The Attorney General's Office said it will appeal the ruling in a statement, "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."
Illinois has a projected $110 billion deficit in its pension obligation. The debit is behind the state's worst-in-the-nation credit rating. If the Supreme Court upholds the Sangamon County ruling, the Democratic-controlled General Assembly will have to go back to the drawing board in Springfield.
If that's the case, Republican Governor Bruce Rauner, who is set to take office on January 12, 2015, will have input. He released a statement on Friday, "Years of underfunding had put the state's pension systems roughly $100 billion short of what they need to cover benefits promised to employees."
