pensions

Zach Bernard

New ways to tackle Illinois' underfunded pension systems could be emerging, as the Republican governor appears to be backing away from his plan.

There's good reason many lawmakers are feeling flummoxed. Illinois' budget is already sagging. And with last week's state Supreme Court decision tossing a major pension law, the deficit is larger still.

The court decision was unequivocal - it's not constitutional to cut state employees' retirement benefits.

John Cullerton
Brian Mackey/WUIS

Even though John Cullerton went along with the pension law that on Friday was found by the state's high court to be unconstitutional, the Illinois Senate President had always favored another approach. Now he's saying (well, not exactly in these exact words ... ) "I told you so." In this episode of The Players -- a podcast about who's who in Illinois politics and what they're up to -- Amanda Vinicky spoke with the Senate's top Democrat about his plans to try again.

Gov. Bruce Rauner says the Illinois Supreme Court's decision striking down the state's public pension overhaul was ``fair and right.''  

The Republican governor says he has long believed that the 2013 law aimed at reducing a $111 billion shortfall was unconstitutional.  

That was the view of the justices who unanimously ruled against it Friday. They said the measure violated the state constitution because it would leave pension promises ``diminished or impaired.''  

(This story first appeared on the Illinois Issues blog last summer that appeared to set the stage for overturning the pension law.  Jamey Dunn looked at what other choices remain for state leaders)

Rep. Elaine Nekritz and Sen. Daniel Biss
Brian Mackey / WUIS/Illinois Issues

Gov. Bruce Rauner’s ideas about how to change government-employee pensions are getting extra scrutiny in Springfield.

Rauner wants employees to be moved into less generous plans for future pension benefits.

So far, it’s just something he’s just talked about. Democrats who’ve long focused on pension issues say that needs to change.

Sen. Daniel Biss, of Evanston, is calling for an actuarial analysis. He also says the idea that legislation would be passed and make it through the inevitable court challenge anytime soon is a “fantasy."

Amanda Vinicky

The many years legislators spent crafting a measure to rein in the state's pension costs came to a head yesterday in 52-and-a-half minute hearing before the Illinois Supreme Court. It's now up to the seven justices whether a law that reduces employees' and retirees' benefits is constitutional.

Even before then-Gov. Pat Quinn signed the pension overhaul into law just over a year ago, everyone knew it would come to this.

Illinois Supreme Court
Brian Mackey / WUIS

There's a simple rule of thumb for determining when the Illinois Supreme Court will rule on a given case, and it's that there is no rule of thumb for determining when the Illinois Supreme Court will rule on a given case.

Pensions' big day before the Illinois Supreme Court has been set for next month, on March 11. 

I was honored to be on a panel recently (before Gov. Bruce Rauner's budget address, so no talk about his latest proposal), along with the Civic Federation's Laurence Msall, Sen. Daniel Biss D-Evanston and Sen. Matt Murphy R-Palatine, to discuss one of the state's most controversial, pressing and expensive issues.  

Amanda Vinicky

Thirty-eight days into his term as Illinois' governor, Bruce Rauner yesterday delivered his much-anticipated budget address. Amanda Vinicky recaps the financial reckoning.

Bruce Rauner
Brian Mackey / WUIS/Illinois Issues

Gov. Bruce Rauner is calling for big cuts in state spending. But some of his projected savings could be a long way off.

A huge chunk of Rauner’s budget savings comes from freezing state pensions and moving workers into more modest plans.

“We cannot continue to raise taxes on all Illinoisans in order to fund the retirement benefits of a small fraction of our residents," Rauner said.

What’s unusual about Rauner’s approach is that he’s booking the $2.2 billion in savings right away, even though it likely would be challenged in court.

Amanda Vinicky

The fate of Illinois' pension law will stay on the fast track. Illinois' Supreme Court justices today rejected a request for a delay.

It can take a long time for a case to wend its way through the courts. But after a Sangamon County judge in November ruled Illinois' overhaul of public worker pensions unconstitutional, the state Supreme Court agreed to take up the case on an expedited basis.

On Tuesday, lawyers contesting the law tried to slow it down by a month.

Illinois Supreme Court Building
Illinois Supreme Court

As they seek to permanently toss Illinois' pension overhaul, state employees and retirees are asking the state Supreme Court for more time to make their arguments. Lawyers filed the request Tuesday.

It's a case that's supposed to be on the fast track: After a Sangamon County judge in November found Illinois' pension law unconstitutional, the Attorney General appealed straight to the state supreme court -- which agreed to hear it on an expedited basis.

WUIS/Brian Mackey

The new year will see an increase in the amount Illinois pays into the state's five publicly-funded pension systems.  

The State Journal-Register in Springfield reports (http://bit.ly/13TU5CI) Illinois' auditor general on Wednesday released a report by the state actuary showing a more than $680 million increase in pension payments in 2015 to $7.5 billion.  

The report doesn't explain the increase. However, it noted three of the five pension systems lowered the estimated rate of return they expect from investments.  

npr.org

The trade magazine "Institutional Investor" has ranked Illinois' incoming governor as its most influential player in U.S. pensions. An article says Bruce Rauner may regret ever having run for office, given the state's massive longterm pension debt, and the difficulty he is expected to have in addressing it.

Il. Supreme Court website - state.il.us/court

The Illinois Supreme Court is allowing a speedy review of a state pension overhaul that a lower court has declared unconstitutional.
 
The court issued an order Wednesday granting the government's request for an
expedited appeal.
 
The court says the government must file its initial argument by Jan. 12. The
other side _ a group of state employees, retired teachers and others _ must
respond by Feb. 27.
 
The case involves the pension fix lawmakers and Gov. Pat Quinn adopted last

state.il.us

State workers behind a challenge to an Illinois
pension law declared unconstitutional are opposing the government's attempt to
have it speedily heard by the Illinois Supreme Court.
 
 Attorney General Lisa Madigan asked the court last week to hasten its schedule
for considering the case. She argues that the government needs a decision
quickly because if it can't implement the law, it would have to find a way to
make up about $1 billion in savings in the first year.
 

Attorney General Lisa Madigan's office has asked the Illinois
Supreme Court for an expedited hearing of her appeal of a lower court's
declaration the state's pension overhaul is unconstitutional.  
 
 Madigan announced the motion Thursday. It says issues raised are of
``widespread public importance'' to state government and seeks a ruling in
advance of lawmakers' May 31 budget approval deadline.
 
Madigan's office had already filed the appeal concerning the 2013 law designed
to reduce roughly $100 billion in unfunded liability.  
 

Lisa Madigan
Marsy's Law for Illinois

Attorney General Lisa  Madigan says if the state supreme court agrees to an expedited hearing...  a ruling on the state's pension law could come by January,.

Harvey Tillis / Illinois Information Service

Although one court has tossed out Illinois’ mega pension overhaul, state leaders are likely to wait on another legal opinion before deciding what to do next.

There’s no question -- the Sangamon County Circuit Court judge’s ruling is meaningful. But Attorney General Lisa Madigan’s office is appealing to the state Supreme Court.

Madigan has said it makes sense for lawmakers to wait to hear from those justices.

Brian Mackey/WUIS

The state will refund money to about 75,000 state retirees who've been paying a portion of their pensions for health insurance over the last year and a half after a court hearing in Sangamon County.
 
Judge Steven Nardulli on Friday scheduled a Dec. 18 hearing to establish how to
distribute more than $60 million to the retirees. Attorneys estimate the money
will be returned by spring.                                                     
 
Retirees began paying a percentage of their annuity under a 2012 law.
 

Amanda Vinicky

An Illinois judge has ruled that a law intended to fix the nation's worst-funded state employee pensions violates the state Constitution. Sangamon County Circuit Judge John Belz ruled Friday in favor of state employees and retirees who sued to block the state's landmark pension overhaul.

At issue was whether lawmakers defied the Illinois Constitution by passing a law that reduces state workers', public school teachers' and university employees' retirement benefits.

Jamey Dunn headshot
mattpenning.com 2014 / WUIS/Illinois Issues

Listen to Dunn's interview about her column with Rachel Otwell: 

Hannah Meisel

Illinois' ability to change retirement benefits of government workers is limited because of a provision in the state Constitution. But what about trying to make that a non-issue, by doing away with that clause?

Article XIII, Sect. 5 of the Illinois Constitution is direct: pension benefits, it says, "shall not be diminished or impaired."

Nevertheless, a law passed last year cuts benefits for current workers and retirees. Whether that squares with the Constitution is currently the subject of a lawsuit.

Bruce Rauner
Brian Mackey/WUIS

Republican candidate Bruce Rauner continues trying to soften his image when it comes to government employees. This comes after he won the nomination in part by relentlessly attacking public employee unions.

Rauner has called for all current state employees to have their pensions frozen and be put into 401(k)-style retirement plans. Many consider that even more harsh than the pension reductions Democratic Gov. Pat Quinn signed into law last year.

WFIU/flickr

It’s expected to be some time before the courts decide whether Illinois can trim retirement benefits for public school teachers, university workers, and state employees. But the uncertainty continues to affect the credit outlook of schools and community colleges across the state.  

sangamon.co.il.us

A coalition of labor unions and state retirees is asking a judge for an expedited ruling in a case challenging the constitutionality of Illinois' pension law.  

Attorneys filed the motion in Sangamon Circuit Court Thursday. They want Judge John Belz to factor in a Supreme Court decision that found health insurance premiums were a protected retirement benefit for state workers.  

  Governor Pat Quinn now has the support of the two statewide teachers unions. The Illinois Federation of Teachers endorsed Quinn Wednesday despite the union's opposition to Quinn's ideas for pension changes.

The IFT is one of the groups suing Quinn for the pension overhaul law passed late last year that would reduce public employee benefits, including those for teachers.

But the union's president, Dan Montgomery, says the election is bigger than the ongoing lawsuit.

Wall Street's view of Illinois' financial health has taken a hit, thanks largely to the state budget that took effect at the start of this month. Pensions also continue to be a drag. 

When Illinois Democrats passed the state's latest budget, many seemed to hold their nose. Credit ratings agencies are more direct: Standard & Poors has revised Illinois' credit outlook to "negative." 

It says the new budget "is not structurally balanced and will contribute to growing."

Hannah Meisel/WUIS

  The Republican candidate for Illinois Attorney General is criticizing incumbent Lisa Madigan for defending the state's pension overhaul law, which he thinks is unconstitutional.

A clause in the state's constitution says that once earned, pension benefits shall not be diminished.

The pension law, passed last year, law reduces cost of living benefits paid out to state employees and public school teachers. That, and other changes, haven't actually taken effect yet; a lawsuit challenging the law is ongoing.

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