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 Illinois justices will hear the state's appeal of a Nov. 21 county
court ruling that tossed out the law. In the ruling, Sangamon County
Judge John Belz drew on an unrelated state supreme court opinion
that found the Illinois Constitution makes it "plain" and
"unambiguous" that pensions cannot be reduced.
The prior ruling, in a case involving retiree healthcare,
essentially handcuffs the supreme court, said Max Schanzenbach,
a professor at Northwestern University's law school. The state's
highest court "had a chance to narrow the pension clause and they
chose not to," Schanzenbach said.
In the current case, Illinois claims payments on its $105 billion
unfunded pension liability are making it impossible to pay for core
services like healthcare and public safety, which are "police
powers" obligations also delineated in the state constitution. But
labor unions and retirees challenging the pension cuts contend the
constitution prohibits any reduction to retirement benefits.
 Mark D. Rosen, a professor at the Chicago-Kent College of Law, said
the court must determine if there is an absolute need for the law,
and whether the legislation reasonably addresses the need.
Rosen, who testified on the constitutionality of Senate Bill 1
before the legislature, said the need exists. "There is a pressing
public need by virtue of the unfundedness," he said.
If the state prevails, the case would return to Sangamon County
court for a ruling on whether a financial emergency exists, legal
experts said.Illinois has the worst-funded pension system and the
lowest credit ratings among all 50 states. Its chronic structural
budget deficit worsened with the rollback of a temporary income tax
increase on Jan. 1.
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"If they find it unconstitutional, hopefully they will tell us
what's wrong and why it's unconstitutional and inform us how we can
perhaps find a bill that is constitutional," Illinois Senate
President John Cullerton said on Monday.
If the law withstands a constitutional challenge, it would allow
state pension contributions to drop by as much as $145 billion
through 2045.
The reform law enacted in December 2013 reduces and suspends
cost-of-living increases for pensions, raises retirement ages and
limits salaries on which pensions are based.
The legal case has ramifications for Chicago, which is defending a
2014 state law that reset city pensions.
(Reporting by Karen Pierog; Editing by Phil Berlowitz)
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