Illinois Supreme Court Sends A Simple Pension Message: Pay Up
From Crain's Chicago Business
Pay up—no matter how long it takes and how much it costs.
That is the overwhelming, utterly clear message sent by the Illinois Supreme Court Friday in tossing out 2013 reforms to state pension funds as unconstitutional. The decision strongly suggests that other changes negotiated by Mayor Rahm Emanuel in Chicago and proposed by Gov. Bruce Rauner for the state are improper.
Effectively, the court ruled that generations of state lawmakers messed up, failing to take needed steps to pay for pension benefits that were enshrined in the Illinois Constitution as "an enforceable contractual relationship, the benefits of which shall not be diminished or impaired."
It is not the fault of state workers or retirees that state retirement systems are grossly underfunded, more than $100 billion short of what they'll eventually need to pay promised benefits, the unanimous court ruled.
"The General Assembly had available to it all the information it needed to estimate the long-term costs" of the promised pension benefits, the decision states. "The law was clear that the promised benefits would therefore have to be paid, and then the responsibility for providing the state's share of the necessary funding fell squarely on the Legislature's shoulders."
Though lawmakers argued that reducing benefits now would be needed to avoid painful tax hikes or reductions in services, the law they produced "was in no sense a last resort," the decision continued. "Rather, it was an expedient to break a political stalemate."
Read more in our daily News Update...
From Crain's Chicago Business
Pay up—no matter how long it takes and how much it costs.
That is the overwhelming, utterly clear message sent by the Illinois Supreme Court Friday in tossing out 2013 reforms to state pension funds as unconstitutional. The decision strongly suggests that other changes negotiated by Mayor Rahm Emanuel in Chicago and proposed by Gov. Bruce Rauner for the state are improper.
Effectively, the court ruled that generations of state lawmakers messed up, failing to take needed steps to pay for pension benefits that were enshrined in the Illinois Constitution as "an enforceable contractual relationship, the benefits of which shall not be diminished or impaired."
It is not the fault of state workers or retirees that state retirement systems are grossly underfunded, more than $100 billion short of what they'll eventually need to pay promised benefits, the unanimous court ruled.
"The General Assembly had available to it all the information it needed to estimate the long-term costs" of the promised pension benefits, the decision states. "The law was clear that the promised benefits would therefore have to be paid, and then the responsibility for providing the state's share of the necessary funding fell squarely on the Legislature's shoulders."
Though lawmakers argued that reducing benefits now would be needed to avoid painful tax hikes or reductions in services, the law they produced "was in no sense a last resort," the decision continued. "Rather, it was an expedient to break a political stalemate."
Read more in our daily News Update...