Illinois Supreme Court hears both sides in state's pension case
SPRINGFIELD (WREX) -
Illinois wants to modify it pension system to bring the state's finances under control. But can it do that?
That's the crux behind the case heard Wednesday before the Illinois Supreme Court.
Lawyers for the participants in the state's pension system assert the state Constitution requires the government to continue providing benefits on the same terms forever even if an economic disaster is looming.
Both sides on the pension reform debate made their case to the state's highest court in Springfield.
Solicitor General Carolyn Shapiro argued for the state and was up first during the hearing.
Shapiro said the debate centers around the whether the justices believe the Illinois Constitution's pension clause goes beyond contract law or if it's an absolute ban on reductions to pensions and “shall not be diminished or impaired.”
"It's the state's solemn responsibility to protect the public interest in extreme situations," said Shapiro.
Justice Thomas asked Shapiro if the pension system would've weathered The Great Recession if it had been fully funded by the state who he claimed was ignoring it's pension obligations.
"No matter how much you want to point to the recession. Isn't it true that the state left the pension funds vulnerable," asked Thomas.
Shapiro answered back stating the pensions were not fully funded. The solicitor said legislators are not asking retirees to reduce the amount of money they receive now, but reduce future increases.
The pension reform bill signed by Gov. Pat Quinn in 2013 reduces annual increases in retiree benefits, such as cost-of-living adjustments. The law also increased the retirement age for some government employees and put a cap on the amount of an employee's salary that can be considered when calculating his or her pension payments.
Shapiro said the court upholding the law would only save 20-percent of the state's total unfunded liability, which is $111 billion currently.
Attorney Gino DiVito argued on behalf of the pension system participants.
DiVito said the framers of the Illinois Constitution's pension clause wanted to create a binding contract and to ensure that the pension rights were guaranteed. He insisted the state's police power to save itself from a doomsday scenario is not applicable under the letter of the law.
Chief Justice Garman asked DiVito if the state is ever able to invoke police power in any circumstance. DiVito said not in cases like this.
DiVito said that the police power can only be destroyed or withheld by the people when forming and adopting a constitution and only them.
The hearing lasted about an hour.
The justices are expected to announce their decision on the case by the end of May.