No state has a worse public pension crisis than Illinois and for years lawmakers have found it impossible to agree upon what to do about it all. This legislative session some agreements were finally hammered out to address the crisis. But now the state’s retired teachers are going to court, suing to stop even those tepid reforms.
Despite that for more than a decade Illinois Democrats have had a lock on control of both the legislature and the governor’s mansion, lawmakers have had much trouble trying to solve the mounting $100 billion deficit. And even with these new agreements, one hurdle stands in lawmakers’ way; the state constitution.
Years ago Democrats and unions were able to add an amendment to the state constitution that would forbid any changes to pension promises. It is this clause that the teachers are citing as a reason that the new reforms must be halted.
“That guarantee, perhaps more so than anything else in the Illinois Constitution, was used by countless families across Illinois to plan careers, retirements and financial futures,” the educators’ lawsuit says. “Many of them know that constitutional guarantee by heart.”
But the state simply cannot continue on the path its pliant legislators agreed to with union representatives who also contribute heavily to the political campaigns of those same legislators.
Of Illinois, David Draine, a senior researcher at the Pew Center on the States, recently said, “They are in the most dire situation of all the states. Illinois is facing a growing bill that it hasn’t figured out how to pay for. The other poorly funded states have at least some sort of plan.”
As NPR reported in June:
“Just how dire is the situation now? Each day without a fix digs the Illinois pension hole at least another $17 million deeper. After two recent downgrades, Illinois’ bonds are only a few steps above junk status. S&P say that only three states–California, Louisiana and Massachusetts–have ever had ratings as low as Illinois’ current level in the last half century. The low rating makes the fiscal situation even more grim, as the state will see its borrowing costs, already among the highest in the nation, rise yet again.”
Still, lawmakers finally agreed on a few half-hearted reforms to pensions including raising the retirement age on a sliding scale and introducing a 401(k) option. Supporters claim that it will save $160 billion over 30 years.
Yet teachers and other critics claim these meager changes violate the constitution and are mounting an effort to stop the reforms that are supposed to take effect in June of next year.
Democrat Governor Pat Quinn, though, feels that the reforms will stand the constitutional test.
“We believe the new law is as constitutionally sound as it is urgently needed to resolve the state’s pension crisis,” Quinn spokeswoman Brooke Anderson said in statement. “We’ll defend the interests of taxpayers.”