Opponents of Illinois pension reform law fight fast-track appeal

[December 10, 2014]  CHICAGO (Reuters) - Public labor unions and others challenging a 2013 law aimed at easing Illinois' pension burden objected on Tuesday to a fast-tracking of the state's appeal of a lower court's ruling that the law is unconstitutional.

State Attorney General Lisa Madigan last week asked the Illinois Supreme Court to speed up the appeal of Sangamon County Court Judge John Belz's Nov. 21 ruling, requesting oral arguments as soon as Jan. 22 and no later than March 10.

She said the move was necessary to enable Illinois' fiscal 2016 budget to incorporate about $1 billion in cost-savings under the law, or adequate spending cuts or tax increases to offset those savings.

The pension reform law was supposed to go into effect on June 1 but was put on hold by Belz in May pending his ruling in five consolidated lawsuits. The state's new fiscal year begins July 1 and the legislature usually passes a budget by May 31.

Opponents of the law, including a coalition of labor unions and state retiree groups, said the normal appeals process should be followed, contending that the state was relying on "a false sense of urgency."

Even if the state's high court determines as early as next month that the law is constitutional, the legal battle would head back to Sangamon County Court and continue well past May 31, according to their filing.

Illinois has the worst-funded state retirement system in the country, and its unfunded pension liability hit $104.6 billion at the end of fiscal 2014. No U.S. state has a lower credit rating than Illinois.

The reform law, which was enacted in December 2013, reduces and suspends cost-of-living increases for pensions, raises retirement ages and limits salaries on which pensions are based.

Employees contribute 1 percent less of their salaries toward pensions, while contributions from the state, which has skipped or skimped on its pension payments over the years, are enforceable through the Illinois Supreme Court.

In his ruling last month, Belz rejected Illinois' arguments that pensions could be cut to protect the public welfare in an emergency, including the state's precarious financial situation. He concluded that the state could not go back on a constitutionally-protected promise to its employees concerning their pension benefits.

(Reporting by Karen Pierog; Editing by Paul Simao)

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