Illinois' pension law failed its first test today. However, that's not the end to questions about its constitutionality.
The language is decisive: the pension law is "unconstitutional and void in its entirety." Sangamon County Circuit Court Judge John Belz says Illinois courts have long held the pension protection clause in the state constitution provides an absolute guarantee and his opinion finds no exception.
Attorneys for the state had argued that state can use its "police powers" in emergency cases to modify retirement benefits. The emergency in this case being Illinois' finances, burdened by $100 billion of long-term pension debt.
The pension law aimed at saving the state money, by reducing state employees,' teachers' and retirees' benefits and requiring they work longer before drawing a pension. While union leaders are claiming victory, it could be temporary. The Attorney General's office says it's appealing to the state supreme court, and is asking for an expedited ruling.
For now, though, the pension law remains on hold. In a statement, Gov.-elect Bruce Rauner calls the ruling a "first step" in a process that should be decided by the Illinois Supreme Court, and says he'll work with legislators to craft an "effective, bipartisan pension reform.” Rauner has previously called for shifting future pension benefits into a 401(k) style system.
