This is the week that Illinois’ new pension law will be argued before the state Supreme Court.
The law, enacted in 2013, puts a cap on how big a pension can be, and it limits the portion of a pension that’s subject to the 3 percent annual increase.
Cinda Klickna, president of the Illinois Education Association, says those increases are part of the pension program can’t just be taken away. “It was a decision by the state and others that this would be a way to make sure that our educators, who had given their careers to students, would have protection financially,” she said, and she says the law diminishes and impairs pensions – exactly what the Constitution says the state can’t do
The state will argue that it has the right to make adjustments to these contractual pension obligations in order to maintain solvency.
James E. Spiotto, a lawyer and board member of the Civic Federation, says the court should allow the state to impair pensions in order to preserve them.
“One of the issues here is, what is an impairment? And the U.S. Supreme Court in the City of Asbury Park (Faitoute Iron & Steel Co. et al vs. City of Asbury Park, N.J., decided in 1942) recognized that if it’s unrealistic that you’d ever be able to pay a contractual right, it’s not an impairment. It’s a recognition of the limited resources, and the reality of the circumstances,” he said.