Top state court to hear oral arguments in pension showdown Wednesday

It’s been nearly four months since a Downstate judge shot down the state law designed to fix Illinois’ mounting pension crisis.

Sangamon County Circuit Judge John Belz sided with state employees and retirees in November. He agreed the Illinois constitution’s protection of pension benefits is “absolute and without exception.”

But that was one battle. And Wednesday, state lawyers will try to win the war during oral arguments before the Illinois Supreme Court. They are expected to question whether any contract is “absolute” and ask the justices to preserve a balance between a pension “promise” and the state’s duty to protect the general welfare of its residents.

John D. Colombo, a professor and interim dean of the University of Illinois’ College of Law, said that’s the only argument the state can make. And he said it won’t be successful.

“The state’s going to lose,” Colombo said. “And I don’t predict much.”

Colombo, whose own state pension could ultimately be affected by the case, said “there is no wiggle room” in the Illinois constitution when it comes to pensions. That’s why he said the state has argued in its briefs before the Supreme Court that it may invoke “police powers” in extreme circumstance and move forward with a law that reduces benefits for retirees but also reduces employee contributions. In this case, the extreme circumstance would be the Great Recession.

But Steven Schwinn, an associate professor at The John Marshall Law School, agreed that contract rights aren’t well-protected under the Illinois constitution, and the magnitude of the state’s pension crisis is the “elephant in the room.”

“It’s got to be on everybody’s mind,” Schwinn said.

The employees and retirees trying to block the law argue this is exactly the kind of move the constitution’s framers had in mind when they wrote in the constitution that membership in any Illinois pension system “shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

The overhaul at issue was approved by lawmakers and former Democratic Gov. Pat Quinn in 2013. Years of underfunding have put the state’s pension systems roughly $111 billion short of what they need to cover benefits promised to employees and retirees.

Republican Gov. Bruce Rauner, who took office in January, has a pension reform plan of his own that he pitched to lawmakers during his budget address in February. However, critics say it could suffer from the same constitutional questions as the law before the Supreme Court.

Chicago-Kent College of Law professors Katharine Baker and Adrian Walters and DePaul University College of Law assistant professor Wendy Epstein wrote a brief supporting the state’s argument that “absolute, strict performance of a contract according to its terms is not always required.”

And five constitutional law professors wrote in a separate brief that the finding that the constitution “absolutely guarantees” benefits to every Illinois public pensioner “is contrary to fundamental constitutional legal principles.”

But Colombo said “there is no credible argument” that enough of an emergency exists today for the state to invoke its police powers. Rather, he said Illinois’ pension crisis is “just a matter of political choices” needed to fund pensions — including whether to cut other programs or raise taxes.

“The Legislature doesn’t want to take the political heat necessary to make that kind of choice,” Colombo said. “This is not an emergency at all.”