State Supreme Court Tells Illinois It's on the Hook for Pension Payments

The Illinois Supreme Court's pension reform decision Friday runs 15,000 words, but its message to state government can be summed up in two: Pay up.

In their unanimous ruling, the seven justices told the state that there is nothing tricky about the Illinois Constitution's pension protection clause:

Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.

And, they said, there is a reason that that clause exists and that its language is so simple: to prevent the state from doing exactly what it tried to do with the 2013 pension reform package.

For those who had hoped that the state would be able to trim its $111-billion unfunded pension liability, this was the end of the line. The bill is due in full.

Understandably, retirees and current employees enrolled in the five state pension systems greeted the decision as a victory. And for them it is. They'll collect every cent promised them under current terms and, upon retirement, will see their pensions grow by 3 percent every year, compounded annually. That was the deal they made when they signed up, and they upheld their end of the deal faithfully.

Really, though, there are no winners here.

This year, just shy of 20 cents of every dollar in state taxes you pay goes toward pensions. That amount will continue to grow.

(Read the rest at Reboot Illinois.)

The court's ruling that the 2013 pension law is unconstitutional in Illinois was arrived at unanimously by all seven justices.

(Read the full opinion, written by Justice Lloyd Karameier, here.)