Madigan To Appeal Pension Law Ruling To Supreme Court "Shortly"
CHICAGO (CBS) -- Illinois Attorney General Lisa Madigan said she expects the state's highest court could take up the state's landmark pension overhaul plan by the end of January, now that a lower court judge has ruled it unconstitutional.
Madigan said she expects to file an appeal to the Illinois Supreme Court "shortly," after a Springfield judge ruled Friday that a law aimed at fixing the state's $100 billion pension crisis violated a provision of the Illinois Constitution which prohibits reducing public employee retirement benefits once they're promised.
The state will seek an expedited hearing from the Supreme Court.
"It could be as early as the end of January, but it will be up to the Illinois Supreme Court as to whether or not to grand our motion for an expedited hearing, and we will be filing that shortly, but have not filed that yet," Madigan said.
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A hearing before the state's highest court was a legal battle both sides saw coming.
"No matter what, it was going to end up before the Illinois Supreme Court. I think everybody's known that since this started," she said.
Madigan, who defended the law before a Sangamon County Circuit Court judge earlier this year, and lost, said she does not plan to change tactics when the case goes before the high court.
"We think we have a very strong argument, and we will make that argument to the Illinois Supreme Court," she said.
The pension patch that legislators and Democratic Gov. Pat Quinn OK'd last December was intended to make up for years of government underfunding that had left the state's retirements accounts roughly $100 billion short of what they need to cover benefits promised to employees.
But Sangamon County Circuit Judge John Belz didn't buy the argument that in times of crisis, the state's sovereignty — essentially, its "police powers" — allow it to impose extraordinary measures.
"The state of Illinois made a constitutionally protected promise to its employees concerning their pension benefits," Belz wrote in a six-page opinion. "Under established and uncontroverted Illinois law, the state of Illinois cannot break its promise."
The milestone law, years in the making, slightly reduced employees' retirement-fund contributions, but also reduced benefits — the part the lawsuit successfully argued is barred by the Illinois Constitution, which protects against action to "impair or diminish" pension allowances.
The state had urged Belz to rule that pensions are a "contractual agreement," which the government may modify, particularly in a crisis. It said the state's "reserved sovereign powers" trumped constitutional language.
"Those 'police powers' do not extend to taking pension benefits away from people where those benefits have been earned," said John Myers, one of the plaintiffs' attorneys. "The state needs to balance its budget, due to alleged fiscal emergencies, it has to find some way other than taking money out of the pockets of retirees."
Rep. Elaine Nekritz, the Northbrook Democrat who was a major architect of the pension fix and an early advocate of the "emergency powers" idea, said an adverse Supreme Court ruling does not eliminate the General Assembly's options to cut the pension debt, but would "make the choices we have to make even harsher."
In that event, "People who are paying taxes in 2045 will still be paying debts incurred in 2014," Nekritz said. "That's a policy choice we were trying to avoid."
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