Ill. Pension Fight May Head to Court 12/04 07:29
SPRINGFIELD, Ill. (AP) -- The passage of a landmark bill to address
Illinois' worst-in-the-nation pension crisis means the yearslong fight over how
to address the massive shortfall now likely shifts to the courts, where its
fate --- and much-needed relief for the financially troubled state --- remains
Lawmakers approved a measure Tuesday to eliminate the $100 billion unfunded
pension liability by cutting benefits for workers and retirees. Public-employee
unions promised quick legal action if Gov. Pat Quinn signs the bill, which the
Chicago Democrat said he will do "promptly."
The unions argue that the legislation violates a provision of the state
constitution that says pension benefits may not be diminished. They criticized
lawmakers who voted yes for approving a bill they say is clearly
"A majority of legislators ignored and defied their oaths of office today
--- but Governor Pat Quinn doesn't have to. He can stay true to his oath and
the legal promise made to public employees and retirees by vetoing this unfair,
unconstitutional bill," a coalition of unions known as We Are One Illinois said
in an emailed statement. "If he doesn't, our union coalition will have no
choice but to seek to uphold the Illinois Constitution and protect workers'
life savings through legal action."
But Quinn said he believes the legislation is constitutional and will be
upheld by the Illinois Supreme Court.
"It is necessary for the economic good for the people of our state, and I
think the court will see it that way," he said.
Senate President John Cullerton, meanwhile, said the legislation will
provide an important test case.
"You can't find out about the constitutionality of the bill until it's
actually passed," Cullerton said.
From California to Rhode Island, a number of states have dealt with similar
pension troubles --- many of which have also wound up in the courts, and with
Illinois' Democrat-controlled Legislature has notably lagged behind in
finding the political will to deal with its ballooning financial problem.
Meanwhile, annual pension payments grew to about one-fifth of the state's
general funds budget, taking money away from schools, roads and other areas.
The measure approved Tuesday emerged last week following negotiations by a
bipartisan pension conference committee and then meetings of Illinois'
legislative leaders. They say it will save the state $160 billion over 30 years
and fully fund the systems by 2044.
It will push back the retirement age for workers ages 45 and younger, on a
sliding scale. The annual 3 percent cost-of-living increases for retirees will
be replaced with a system that only provides the increases on a portion of
benefits, based on how many years a beneficiary was in a job. Some workers will
have the option of freezing their pension and starting a 401(k)-style defined
Workers will contribute 1 percent less to their own retirement under the
plan. Legislative leaders say they included that provision, as well as language
that says the retirement systems may sue the state if it doesn't make its
annual payments, in hopes of boosting the measure's odds of surviving the
unions' anticipated court challenge.
In addition to the labor unions, some Republicans said they opposed the bill
because it didn't cut benefits enough. Other opponents said there wasn't
sufficient time for lawmakers and the public to review it.
House Speaker Michael Madigan, a Chicago Democrat, said it was one of the
most difficult votes his members have had to take because of the stiff
opposition mounted by unions, a traditional Democratic ally.
But he and other lawmakers said the vote --- while painful --- was necessary.
"I don't take any joy in this action today," said Rep. Elaine Nekritz, a
Democrat from the Chicago suburb of Northbrook who is the chairwoman of the
House pension committee. "Yet it's the responsible thing to provide a pension
system that gives workers retirement security without bankrupting our state."
JoAnn Washington-Murry, who has spent almost 20 years as a child welfare
specialist with the Illinois Department of Children and Family Services, said
she may have to delay her retirement because of the cuts. The 60-year-old
estimates she'll receive about $30,000 less in pension benefits over the next
18 years under the new plan. She said she's upset lawmakers allowed the problem
to get this bad.
"We paid our fair share of our pension; it's the state that has not put in
what they needed to," Washington-Murry said. "People are feeling like they're
just violated, like someone stole their money for retirement."