State’s High Court Hears Arguments In Pension Case

Oral arguments have begun before the Illinois Supreme Court on whether a massive state-employee pension bailout invalidated last fall by a lower court will be revived.

The issue is whether the law, designed to deal with a $111 billion deficit in four retirement accounts by cutting benefits to current state employees, violates the state constitutional protection against reducing that assistance.

Lawyers for the General Assembly and the governor's office are defending the bailout plan adopted in 2013.

The state argues the government has "police powers'' to change contracts in extraordinary circumstances.

Gwen Harrison of Springfield wants to overturn the state’s pension law.  The librarian for the Secretary of State is a few years away from retirement.

She added her name to the list of state employees in the lawsuit because the retirement benefits were part of the reason she took the job.

"I knew that one day I did plan to retire, and that I wanted to be able to live my life out so that I could be comfortable, take care of my family, play with my grandbabies, you know," she said.  "And just, and stay healthy. So it was part of the benefits package, and it was one of the reasons why I said yes."

Harrison and other opponents of pension changes say the state needs to look at other options, such as raising taxes.

Speaking outside the courthouse, Harrison says that for years, workers made their contributions to their retirement funds while the state did not.
 
The 53-year-old says public employees and retirees shouldn't be punished because of lawmakers' failings.

Years of the state not paying its share for employees' retirement costs left Illinois with the most underfunded pensions in the nation.

But in her argument before the court, Solicitor General Carolyn Shapiro said that's not the only reason.

"The recession was a really, truly unforeseeable event," she said. 

Shapiro said Illinois' budget problems created an emergency; and in extreme emergencies, the state can use its police powers to modify contracts -- like the one it has with employees to provide them with retirement benefits.

Justice Robert Thomas had repeated questions about that idea. If the court were to agree, he asked: "Then aren't we giving the state the power to modify its contractual obligations whenever it wants?"

There's no indication when the court will come out with an opinion.

The law's supporters say it's needed to address Illinois' worst-in-the-nation pension debt.

A county judge ruled last fall that the initiative violates the Illinois Constitution because it cuts promised retirement benefits to current employees.