Last week the Illinois Supreme Court ruled 6-1 that the lifetime free healthcare benefit granted to public retirees is constitutionally protected. The decision is here. I interpret that as a signal that the justices are predisposed to rule in favor of the opponents of Senate Bill 1, Illinois’s recently-enacted “pension reform bill”. I don’t honestly see how the justices could craft a decision that prevented the state legislature from reducing benefits paid to retirees that aren’t explicitly constitutionally mandated while allowing them to reduce benefits that are.
The editors of the Wall Street Journal are appalled:
The ruling is a dreadful precedent for sensible pension reform. The court majority opined that the state constitution is “aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them” and “must be liberally construed in favor of the rights of the pensioner.” And unions have sued to block last year’s de minimis pension fixes that tweaked cost-of-living adjustments, raised the retirement age for younger workers and capped annuities for employees making six figures.
The Court’s decision is completely unsurprising to me—it’s what I have been predicting for years.
The editors of the Sun-Times list the state’s alternatives when the inevitable happens and Senate Bill 1 is struck down:
Things are very wrong when taxpayers are taken hostage by pension debts. In three years, Illinoisans will spend one third of all our state-generated revenue on pensions.
That’s untenable. This is a crisis, and we’re teetering on the cliff. We either raise taxes and drive more of us to move away, or we change the constitution, or we change laws to control double-dipping and too-generous pension benefits approved by local school board members and other officials.
Or all of the above. Waiting any longer is pure insanity.
Raising taxes, the strategy preferred by Gov. Quinn and the state legislature, is unlikely to succeed in solving the state’s problems. You can mandate increased rates but you can’t mandate increased revenue. Amending the state’s constitution is an even bigger “Hail Mary”. Reducing future pension benefits might have worked if it had been adopted some years ago but it won’t solve the problem we have now.
My predictions are that the state legislature will do nothing until after the November election, the Illinois Supreme Court will strike down Senate Bill 1, and that most of the state’s legislators will be returned to office.
The clear message will be that there is no penalty for driving the state to ruin.