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Illinois Supreme Court Rules Pension Cuts Unconstitutional

by David Patterson  |  May 27, 2015

Illinois Supreme Court Rules Pension Cuts Unconstitutional The Illinois Supreme Court unanimously ruled that a $105 billion pension change affecting half a million active and retired public employees is unconstitutional.

The Illinois Supreme Court unanimously ruled that a $105 billion pension change affecting half a million active and retired public employees is unconstitutional.

The law passed in 2013 reduced pension benefits for active and retired employees of the state of Illinois, state universities and teachers outside Chicago, even though the state’s constitution explicitly provides that pension benefits cannot be diminished.

AFSCME and other public sector unions filed suit to overturn the law.

In its ruling, the court rejected claims that the state’s dire fiscal straits justified the pension reductions.

“Crisis is not an excuse to abandon the rule of law,” wrote Justice Lloyd A. Karmeier, who authored the ruling. “It is a summons to defend it.”

The justices noted that lawmakers had failed to keep in place a 2011 temporary income tax hike that boosted the personal tax rate to 5 percent. The increase automatically phased down to 3.75 percent for individuals at the start of the year, reducing annual revenue by $4 billion.

The pension law passed in 2013 would have lowered cost-of-living increases for retirees, extended retirement ages for current employees and limited the amount of salary used to calculate pension benefits, with the effect of reducing the average pension benefit by more than 30 percent over two decades of retirement. Most Illinois public employees aren’t eligible for Social Security and the average pension of $32,000 per year is their primary source of income.

“We are thankful that the Supreme Court unanimously upheld the will of the people, overturned this unfair and unconstitutional law, and protected the hard-earned life savings of correctional officers, caregivers, first responders, teachers, and other public service workers and retirees,” said Roberta Lynch, executive director of AFSCME Illinois Council 31.

The court’s decision will likely affect a lawsuit filed by AFSCME and other unions challenging a law backed by Chicago Mayor Rahm Emanuel that cuts pensions of city employees and retirees.

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