Teaching Profession

Illinois Policymakers Scramble After Pension Law Struck Down

By Andrew Ujifusa — May 19, 2015 3 min read
  • Save to favorites
  • Print

An Illinois Supreme Court ruling this month that overturned a 2013 law altering pensions for retired teachers has not only scrambled the state’s financial outlook: It’s pushed first-year GOP Gov. Bruce Rauner to seek a constitutional amendment that could clear a path for his own overhaul of retirement benefits and stop any legal challenge to it.

But shoring up the state budget in light of the ruling won’t be easy, in part because lawmakers allowed a statewide tax increase to partially sunset at the start of this year, a fact the justices noted in their unanimous May 8 ruling.

While Gov. Rauner has a plan that would create a distinction between previously earned benefits and new, less generous ones in order to boost the pension system’s fiscal health, it’s not clear it would pass muster with either the legislature, controlled by Democrats, or the courts.

And any constitutional amendment from Gov. Rauner to protect his plan or any other pension overhaul would require approval from 60 percent of both chambers of the legislature just to be put on the ballot.

The state’s highest court ruled that Senate Bill 1, signed into law by Mr. Rauner’s Democratic predecessor, Gov. Pat Quinn, in 2013, violated a section of the Illinois Constitution stating that membership benefits in a state pension or retirement system “shall not be diminished or impaired.”

The latest numbers from the state pension system, published last year, show that the Teachers’ Retirement System had $62 billion in unfunded liabilities, up from $56 billion roughly a year ago, out of $111 billion in total unfunded state-pension liabilities.

“Other than to come up with the money to start paying off the unfunded liabilities, there are some options out there that are just wishing and hoping,” said Kent Redfield, a professor emeritus of political science at the University of Illinois at Springfield who has studied state politics and pensions.

Past vs. Future

Pennsylvania lawmakers are coming to grips with their own underfunded pension systems—a bill passed by that state’s Senate May 13 would require public school employees in the state pension system hired before 2010 to either pay more into the system or agree to what is effectively a reduction in their benefits.

In Illinois, the 2013 law signed by Mr. Quinn and originally slated to go into effect last June would have excluded most pension issues from collective bargaining, and reduced benefits for workers below a certain level of experience, among other changes.

We Are One Illinois, a coalition of groups that includes teachers’ unions, immediately sued to overturn the law. Defending it in court, the state pointed to Illinois’ strained finances—including a $6.2 billion budget deficit heading into fiscal 2016—and the burden of the pensions. But the supreme court justices laid the blame squarely at the feet of lawmakers for not properly funding the pension system.

“Indeed, accepting the state’s position that reducing retirement benefits is justified by economic circumstances would require that we allow the legislature to do the very thing the pension-protection clause was designed to prevent it from doing,” Justice Lloyd A. Karmeier wrote in the court’s opinion.

For fiscal 2016 alone, Gov. Rauner’s office says, the state owes $7.6 billion to the pension system, about a quarter of the state’s operating budget.

The governor’s plan would offer public employees a lump-sum payment into a supplemental defined-benefits plan in exchange for shifting to a lower cost-of-living adjustment, among other changes. A lawyer for Gov. Rauner, Kim Fowler, told lawmakers last week that, in the governor’s view, the court’s opinion protects only previously earned benefits, not future ones.

But Rep. Scott Drury, a Democrat, told the governor’s staff that Mr. Rauner’s claim that his plan is constitutional even as he seeks to amend the constitution to provide legal cover was problematic.

“The court poked a lot of holes in what we did” in 2013, said Mr. Drury, who at the same time acknowledged that he wasn’t sure what a sound plan for pensions would ultimately look like.

Some options for the state could include a push to reamortize its pension debt and to move some of the unfunded pension burden to districts outside of Chicago, Mr. Redfield said.

But the court was clear on one issue, he noted: “You can’t screw around with the formula to reduce benefits.”

A version of this article appeared in the May 20, 2015 edition of Education Week as Illinois Policymakers Scramble After Pension Law Struck Down

Events

Mathematics K-12 Essentials Forum Helping Students Succeed in Math
Student Well-Being Live Online Discussion A Seat at the Table: The Power of Emotion Regulation to Drive K-12 Academic Performance and Wellbeing
Wish you could handle emotions better? Learn practical strategies with researcher Marc Brackett and host Peter DeWitt.

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Teaching Profession Want to Teach in Oklahoma? You May Have to Prove You're Not 'Woke'
The state is partnering with PragerU to develop an assessment for incoming educators.
3 min read
Oklahoma Superintendent of Public Instruction Ryan Walters holds his hand over his heart during the National Anthem at inauguration ceremonies on Jan. 9, 2023, in Oklahoma City.
Oklahoma Superintendent of Public Instruction Ryan Walters holds his hand over his heart during the National Anthem at inauguration ceremonies on Jan. 9, 2023, in Oklahoma City. Walters announced plans for a new test to screen teachers from states considered “woke.”
Sue Ogrocki/AP
Teaching Profession ‘You Can Lead Now’: Inside the NEA’s Plan to Engage New Teachers
In an aging workforce, the nation's largest teachers' union seeks ways to engage younger educators.
3 min read
Em DePriest of Kansas speaks on behalf of a proposal to create an early career teacher working group. Members of the National Education Association's Aspiring Educators Program move to bring an initiative to a vote during the NEA Representative Assembly in Portland, Ore., on July 3, 2025.
Em DePriest, a teacher in Kansas, speaks in favor of a proposal to create an early-career teacher working group. Members of the National Education Association's Aspiring Educators program moved to bring the initiative to a vote during the NEA representative assembly in Portland, Ore., on July 3, 2025.
Kaylee Domzalski/Education Week
Teaching Profession Can the National Education Association Win Over Republican Members?
Union leaders seek common ground with conservative teachers while managing an active, mostly liberal membership.
5 min read
The National Education Association's Republic Educators Caucus tabled at the NEA Representative Assembly on July 4, 2025, in Portland, Ore
The National Education Association's Republic Educators Caucus had a table at the NEA representative assembly on July 4, 2025, in Portland, Ore. The national teachers' union has been working to engage conservative teachers and communities.
Kaylee Domzalski/Education Week
Teaching Profession Teachers Face New Burdens After Supreme Court LGBTQ+ Opt-Out Ruling
A Supreme Court ruling allowing parents to opt their children out of certain lessons could add new challenges for teachers.
6 min read
Demonstrators are seen outside the Supreme Court as oral arguments are heard in the case of Mahmoud v. Taylor on April 22, 2025. The case contends that forcing students to participate in LGBTQ+ learning material violates First Amendment rights to exercise religious beliefs.
Demonstrators are seen outside the Supreme Court as oral arguments are heard in the case of <i>Mahmoud</i> v. <i>Taylor</i> on April 22, 2025. The justices ruled that parents can exercise their religious right to have their children excused from LGBTQ-themed lessons, which has prompted new logistical and practical concerns among teachers.
Tom Williams/CQ Roll Call via AP