Judge Strikes Down Reform of Illinois' Extremely Screwed Up Public Pensions

Credit: -Tripp- / photo on flickr

The public employee pension system in Illinois is an absolute disaster. It's objectively in the worst state in the whole country. According to a recent analysis by non-profit State Budget Solutions, it's at or near the top of several different lists for underfunding. Its liabilities are worth more than $300 billion, and the pensions are only 22 percent funded, leaving each resident of the state on the hook for $25,000 in potential debt if the funds miss their targets. Employees barely contribute to their own pensions and the state has also frequently skipped its own payments.

The state managed to push through some extremely modest pension reforms last year after a lot of wrangling and hand-wringing. It froze cost-of-living increases, raised the retirement age, and capped the maximum salary used to determine pensions. But employee unions have fought it, and today they were handed a victory. A judge ruled the reforms violate the state's constitution. From Reuters:

Sangamon County Circuit Court Judge John Belz, who heard oral arguments for and against the state's pension reform law on Thursday, ruled that the law both diminishes and impairs retirement benefits for public sector workers in violation of a state constitution provision. The judge rejected the state's argument that its ability to invoke its sovereign powers in an emergency trumps protections in the state constitution for pensions.

"In summary, the state of Illinois made a constitutionally protected promise to its employees concerning their pension benefits," Belz's ruling stated. "Under established and uncontroverted Illinois law, the state of Illinois cannot break this promise."

The matter may now head to the Illinois Supreme Court. Read more about the sorry state of Illinois' pensions here at Illinois Policy.

Comments

[Sam Haysom]

Well judge wasn't acting illegally or outside his constitutional powers so I guess I support it. #reasonlogic

[See Double You]

Derp.

[See Double You]

But no matter how hard they try, state constitutions are not going to save public employee pensions.

[Jerryskids]

State constitutions may be a firm law, but the laws of math are immutable. The state kept promising to gladly pay them Tuesday for a hamburger today - Tuesday finally came.

Games people play, you take take it or you leave it

Things that they say, honor bright,

If I promise you the moon and the stars, would you believe it?

Games people play in the middle of the night.

[Cytotoxic]

Was this judge's ruling sound?

[See Double You]

According to Shackford and Invisible Finger, probably not.

[Migrant Log Picker]

If you like your plan, you can keep your plan.

[Brian D]

Economics are unconstitutional!

/judge

[Invisible Finger]

This judge is completely full of shit and should be deleted.

The law wasn't going to cancel anyone's pension, nor was it going to even reduce anyone's already calculated pension going forward. All it was doing is changing the formula for people who aren't close to retiring yet. NO PROMISES WERE BEING BROKEN.

I cannot believe how pissed of I am at this judge for his utter bullshit. This law was chicken-shit reform in the first place, and the judge and unions are flat-out lying about what it was. The fucking cocksucker didn't even read the fucking law OR the fucking constitution. I hope this prick dies 20 billion deaths.

Either way, as long as SB 1 is tangled up in the courts, Illinois' massive pension debt will continue to balloon. The unfunded pension liability is so large today that it would take three years of a complete government shutdown, during which the entire general fund went toward pensions, just to break even. This shutdown would mean no funding for schools, no money for public safety, and nothing for health care and human services.

Sounds like a good plan to me. Just to shove it up this motherfucker's ass.

[Brett L]

They put pension guarantees in the constitution? Good and hard, the plebiscite deserve it.

[Ken Shultz]

I think they should just tax the hell out of business and the rich--and if that isn't the solution, then an executive order is.

Actually, I hope they close half the state's schools. I hope there's a strike and the garbage piles up so high, they can smell it in Wisconsin. I hope the unions squeal and scream like they did about Walker, but that won't happen. They'll let Chicago turn into Detroit first.

[Ken Shultz]

Incidentally, the right-wing Huffington Post says Illinois is the 48th worst state for business:

http://www.huffingtonpost.com/.....40523.html

"Its liabilities are worth more than $300 billion, and the pensions are only 22 percent funded, leaving each resident of the state on the hook for $25,000."

If you're a CEO, and you move your business to Illinois--in spite of a stat like that? Your investors should considering suing you just for breach of fiduciary duty alone.

[Ken Shultz]

"48th worst state"

You know what I mean.

If it were a union standard "race to the bottom", they'd have come in 3rd.

[See Double You]

Your investors should considering suing you just for breach of fiduciary duty alone.

But BUSINESS JUDGMENT RULE!!!*

/Delaware courts

*Although I largely favor the rule itself

[Cunning Linguist]

Illinois is going to collapse under the weight of it's compassion and generosity. They needed serious reforms and aren't going to get them. Barbarians snarling over their food dishes, every one of them. The crash will be an spectacle for sure. I feel bad for the people who supported reform that are caught up in this.

what did someone once say, "it's not politics, it's just math."

[Ken Shultz]

Again, look at Detroit.

That's how bad things have to get when unions run the place before anybody makes any meaningful concessions.

Actually, last I heard, the unions in Detroit still weren't making any meaningful concessions. So we still don't know how bad things are going to get.

But I know that in Detroit, they won't send someone to put out a fire in a burning building unless someone verifies that the building is occupied.

[Somalian Road Corporation]

Delta City can't come soon enough.

[antisocial-ist]

So, was the judge who decided this case going to be affected by his own ruling? Given that judges are state employees I don't see how he couldn't have had a conflict of interest unless some state pension plans are completely separate from others.

[Swiss Servator, spare a franc?]

We will be the first state in the US to go into BK - we have a few years left, but it is coming. The Donkeys tried raising taxes by 40% and all that did was cause laughter in Wisconsin and Indiana as businesses moved across the line and found instant relief. Billions behind in paying the bills, before we even get to pensions... I will be urging my kids to not come back when they finish school.

[Mudhen]

I just hope Illinois can make it another six years ( When I retire and leave) before it collapses and they impose a exit tax. The Dems running things have no plan other than keep raising taxes and otherwise kick it down the road. We're also about to get stuck with a huge property tax increase (IL State Senate Bill 16) so that those of us living outside Chicago get to bail out the Chicago Teachers Pensions and further subsidize the disaster they call the Chicago Public School System. Why anyone would stay here after retirement is beyond me.

[ashbusuttiloac]

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