It’s back to the drawing board for Illinois lawmakers after the state Supreme Court unanimously tossed out pension reforms.
Lawmakers were counting on these reforms to help whittle down the $111 billion in unfunded pension debt, but the court said the state Constitution prohibits modifying the pensions promised to state workers and retirees. “The protections afforded to such benefits by Article XIII, Section 5 attach once an individual first embarks upon employment in a position covered by a public retirement system ...” the justices wrote.
It’s all so crazy. Private businesses can and do change their pension plans, but this ruling seems to say that a 20-year-old new state hire has his pension benefits carved into stone his first day on the job.
Gov. Bruce Rauner said after the ruling that Illinois needs a constitutional amendment to distinguish between benefits already earned and future benefits. But a vote on that is at best two years away. Rauner previously thought lawmakers could make such a change and put $2.2 billion in pension savings into his budget for the fiscal year that starts July 1. Now what?
It’s especially frustrating that the people collecting and earning these pensions make up a tiny fraction of the entire state population, yet almost 25 cents of every state dollar in the general fund goes to help fund the pensions rather than programs that would benefit all Illinois residents. About 90 cents of each dollar of the temporary income tax increase went to the pension debt, and it barely made a dent.
Lawmakers have failed Illinois residents by allowing these plush pensions, failing to fund them, failing to make fiscally sound decisions on state spending, passing an unconstitutional bill to “solve” the problem, and smiling all the way to the bank to collect their paychecks.