County judge set to rule on Illinois pension law; could land with state Supreme Court

Government And Institutions Associated Press

A Sangamon County judge's ruling Friday on the constitutionality of the landmark Illinois pension overhaul could determine whether the matter is ultimately decided by the state Supreme Court.

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Circuit Judge John Belz announced the timetable for a written opinion at a hearing Thursday at which he considered arguments about whether the state can use the crisis of a $100 billion retirement-fund debt to cut benefits to retirees.

Belz indicated in September that he'd like to move the case to the high court quickly because of the precedent set in a separate ruling in July. The Supreme Court decreed that a plan to require government retirees to pay more for health insurance was unconstitutional, creating an "elephant in the room" that couldn't be ignored because of the similarity with the pension matter.

The pension fix — which would slice the debt in five state pension systems by reducing benefits to retirees while also slightly reducing the contributions they must pay — prompted five lawsuits, later consolidated, by groups representing government employees and retirees. The lawsuit argues that the state's 1970 constitution prohibits action to "diminish or impair" pension benefits.

"The language in the pension protection clause of the constitution is plain and unambiguous; it has no exceptions," said former appellate court justice Gino DiVito, representing retired teachers. "It should be applied as stated."

But Assistant Attorney General Richard Huszagh, defending the law, argued that the constitution notes that membership in a pension system is "an enforceable contractual relationship," which the state can change. He invoked the "sovereign power" of the state to take extreme actions during crises. As he put it, "In case of fire, you need to break the glass."

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"Contractual rights are never inviolable," Huszagh said. "There is in emergencies and other extraordinary circumstances the ability of the government to modify contractual rights."

If the high court considers and strikes down the law, approved by lawmakers and Gov. Pat Quinn in December 2013, it could mean an extra headache for Bruce Rauner, the incoming Republican governor who already faces uncertain revenues in putting together a state budget.

Huszagh contended the Detroit bankruptcy case bolsters his stance. There, a federal judge approved a plan this month for the city to emerge from bankruptcy protection in part by cutting the pensions of 12,000 city retirees by 4.5 percent. Huszagh said the judge rejected a similar argument against diminishment because of the bankruptcy problems — although his decision isn't binding on any other court.

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Contact John O'Connor at https://twitter.com/apoconnor