An Illinois Supreme Court ruling today striking down the state's pension-cutting law thrusts Gov. Bruce Rauner's ideas into the spotlight as the search begins anew for solutions to the benefits funding crisis.
The court unanimously and forcefully declared the 2013 law unconstitutional, so Rauner's proposal to amend the state constitution could become a focus in the coming weeks. The governor made another call today for the idea, saying it would create a path for reducing benefits on public employees' future earnings.
What Rauner has proposed for the budgetWith the Illinois Supreme Court's ruling against a 2013 pension plan that would have slashed state workers' retirement payments, attention shifts to Gov. Bruce Rauner's plans. He says it would save $2.2 billion next budget year. Here's what he has proposed as part of his Turnaround Agenda.
• Require a constitutional amendment that explicitly states Illinois is only responsible for previously earned benefits, and not those earned in the future.
• Apply to state workers, teachers, state university employees and General Assembly members.
• Preserve retirement benefits already earned.
• Set up a 401(k)-style plan for workers' future benefits. This means employees would be responsible for contributing to their own retirement plan, and the health of their retirement funds would depend on their contributions and the state of the financial market.
"There's no reason we can't freeze and protect the current pensions that have been earned and protect the deal of retirees but create a second pension plan for all current and future employees," Rauner said during a meeting with the Daily Herald Editorial Board meeting in April.
-- Erin Hegarty
"Let's just stop tinkering around the edges and get to the real root of the problem," said state Rep. Tom Morrison, a Palatine Republican.
An amendment couldn't go before voters until 2016, and that's if a Capitol controlled by Democrats would put a measure opposed by unions on the ballot. Sixty percent of lawmakers would have to approve, followed by the same percentage of voters.
In the meantime, other proposals could emerge to reduce spending on pensions to save the state money.
Rauner has also suggested putting workers' future benefits into 401(k)-style plans, an idea union leaders and many Democrats oppose.
And an old plan from Senate President John Cullerton that would have workers and teachers trade pension benefits for health-care coverage could find new life, though the court's ruling could put a serious damper on that, too.
"I really do think we have to start from scratch," said state Sen. Linda Holmes, an Aurora Democrat and key union backer.
The benefit cuts were seen as a savior for the state's significant budget problems, but the ruling is a relief to teachers and state workers, at least for now.
"There's still work that needs to be done and there needs to be responses from both sides to find a solution," Glenn Hansen, president of the College of DuPage Faculty Association, said. "My feeling is there needs to be compromise, but I don't think it will happen at first. There will probably be more political wrangling and finger-pointing and nobody is going to sit at the table."
The court's decision was unanimous and agrees with a lower court opinion that also rejected the law. The law was rejected in its entirety, with the seven justices ruling that no part can be allowed to survive separate from the others.
"Adherence to constitutional requirements often requires significant sacrifice, but our survival as a society depends on it," the opinion reads.
The state faces debt in its pension funds of more than $110 billion, and as the yearly payment for those retirement systems grows, the state has less money for other programs.
"We are now going to be facing this problem for the next 50 years. And that makes me sad for Illinois," said state Rep. Elaine Nekritz, a Northbrook Democrat and author of the plan that was killed by the Supreme Court.
This year, Rauner has proposed deep cuts to some state programs because the state faces a budget hole he pegs at $6 billion.
Lawmakers have heard from interests from across the state begging them not to make the cuts.
Parents of disabled children say they won't get the care they need. University officials say massive cuts could raise tuition. Even Supreme Court Chief Justice Rita Garman has testified before lawmakers saying big cuts means the system won't be able to track criminals on probation.
Rauner, though, has argued the state's spending is so out of whack that serious measures must be taken, especially because Illinois isn't paying its bills on time to begin with.
Nekritz said finding a balance between pension payments and state programs was the point of their effort. With the court saying pension cuts are off limits, lawmakers' options are more limited.
"The financial challenges facing state and local governments in Illinois are well known and significant," the opinion reads. "In ruling as we have today, we do not mean to minimize the gravity of the state's problems or the magnitude of the difficulty facing our elected representatives. It is our obligation, however, just as it is theirs, to ensure that the law is followed."
• Daily Herald staff writers Erin Hegarty and Chris Placek contributed to this story.