Mary Williams Walsh just reported that:
A judge in Chicago ruled on Friday that a plan to change city workers’ pensions was unconstitutional in a case being closely watched for its effect on the city’s uncertain finances.
The ruling, by Judge Rita M. Novak of the Cook County Circuit Court, is viewed as a setback to Mayor Rahm Emanuel’s efforts to rein in costs and rescue the city’s credit rating. Officials in the mayor’s office said the city would appeal.
“While we are disappointed by the trial court’s ruling, we have always recognized that this matter will ultimately be resolved by the Illinois Supreme Court,” said Chicago’s corporation counsel, Stephen Patton, in a statement. “We now look forward to having our arguments heard there.”
Last year, the city negotiated labor agreements to strengthen two of its pension plans, those for laborers and general municipal workers. The agreements called for reducing the cost-of-living increases that retirees receive each year, increasing workers’ mandatory contributions to the funds and strengthening the city’s pledge to step up its own contributions. In the past, the state Legislature has told Chicago what to contribute, and it has set the required amounts well below the actual cost of the pensions, putting the system into serious jeopardy.
Of the 31 unions whose members were to be affected by the changes, 28 had approved it. But the others sued.
How similar is this to the situation in New Jersey where we have seen:
- the elimination of cost-of-living increases which was overturned in court but that ruling is being appealed (apparently in limbo) by the state;
- increased workers’ mandatory contributions that was overruled on constitutional grounds for judges so they changed the constitution; and
- a pledge by the state to make mandatory contributions that was reneged on with the Supreme Court’s approval.
Will the same scenarios play out in Chicago?
It could ultimately depend on who the judges on the Illinois Supreme Court are beholden to.