Judge Rules City's 2014 Pension Overhaul Unconstitutional
CHICAGO (CBS) --A Cook County judge has thrown out the Emanuel administration's plan to overhaul two of the city's four employee pension systems.
Union officials and retired workers applauded the ruling by Judge Rita Novak, whose 34-page ruling said the Illinois Supreme Court made it clear earlier this year that public employees have the constitutional right to receive benefits they were promised.
Novak said legislation that would have reduced benefits for municipal employees and laborers was "unconstitutional and void."
Alice Johnson, director of the Illinois Nurses Association, called the ruling a win for everyone in the state.
"We are extremely happy with today's ruling that overturns the city pension cuts, and protects the life savings of city workers," she said.
Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees Council 31, said unions hope the city doesn't prolong the inevitable by appealing the ruling.
"We would urge the city not to waste further time, and taxpayer dollars, on an appeal. Judge Novak was very clear and unequivocal today, and the Supreme Court was just as unequivocal in the spring," he said.
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In May, the Illinois Supreme Court handed down a unanimous decision declaring 2013 legislation to overhaul state employee pension systems to be unconstitutional. The justices said the law violated a section of the Illinois Constitution barring employee pension benefits from being "diminished or impaired."
The city made it clear it intends to take the case to the state's highest court.
""While we are disappointed by the trial court's ruling, we have always recognized that this matter will ultimately be resolved by the Illinois Supreme Court. We now look forward to having our arguments heard there," city Corporation Counsel Stephen Patton said. "We continue to strongly believe that the City's pension reform legislation, unlike the State legislation held unconstitutional this past spring, does not diminish or impair pension benefits, but rather preserves and protects them. This law not only rescues the municipal and laborer pension funds from certain insolvency, but ensures that, over time, they will be fully funded and the 61,000 affected City workers and retirees will receive the pensions they were promised."
Funding full pension benefits could force the city to raise property taxes.
Retired Chicago Park District truck driver David LaPaglia said he's okay with that.
"We worked for the city, okay? Everybody's going to pay their share, and I'm going to pay my share also," he said.
LaPaglia said the higher pension contributions he was paying under the Emanuel administration's pension overhaul plan were hurting him and his family.
Lindall said the city could raise revenue to fund pensions by closing corporate tax loopholes, and tapping tax increment financing surupluses.
"Looking at other creative ideas: to ask rich folks to pay their fair share, and there are solutions at the state level, as well," he said.
