A Sangamon County judge struck down Illinois’ pension overhaul law today, saying it impairs and diminishes retiree benefits in violation of the state constitution.
The decision will be appealed directly to the Illinois Supreme Court, but it’s likely the high court will also rule against the state.
Sangamon County Circuit Judge John Belz delivered his written decision this afternoon, following a round of closing arguments yesterday by lawyers for state employee unions and retirees, as well as lawyers for the state.Â
“The court finds that, on its face, the (pension law) impairs and diminishes the benefits of membership in state retirement systems in multiple ways,” Belz wrote, adding that several provisions in the law clearly decrease the total amount of benefits retirees will receive.Â
Lawyers for the state had argued that Illinois has implied “police powers” that may be exercised in an emergency. They said the state’s massive unfunded pension liability topping $96 billion qualifies as such an emergency. They argued that the Illinois constitution’s prohibition on diminishing or impairing benefits is subject to traditional contract law, in which contractual relationships are understood to be dissolvable under certain circumstances.
Belz said in his ruling that the case law surrounding pensions is clear: no changes can be made which harm retiree benefits.
“Illinois courts have consistently held over time that the Illinois Pension Clause’s protection against the diminishment or impairment of pension benefits is absolute and without exception,” Belz said.
The judge also ruled that the entire law must be trashed, regardless of the state’s argument that certain provisions are “severable” and can remain in place if part of the law is struck down.
Illinois Attorney General Lisa Madigan pledged to appeal the decision immediately, and she urged the Illinois Supreme Court to rule on the case as soon as possible. Appeals dealing with constitutional issues go directly to the state’s highest court.
The Supreme Court previously ruled that a similar law which dealt with retiree health benefits and didn’t go as far as the pension law was unconstitutional, so it’s likely that the pension law itself will also be struck down. That means the Illinois General Assembly will likely have to revisit the unpopular and politically dangerous issue under newly-elected Republican governor Bruce Rauner.
To read Belz’s decision as a PDF file, visit http://illinoistimes.com/file-240-.pdf.
This article appears in Nov 20-26, 2014.
