Supreme Court: State can't reduce public employees' retirement b - New York News

Supreme Court: State can't reduce public employees' retirement benefits

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Randy von Liski / flickr Randy von Liski / flickr
CHICAGO (FOX 32 News) -

A big blow to Illinois taxpayers today: the State Supreme Court ruled retired state employees have a constitutionally-protected right to taxpayer-funded health insurance.

It could add another $56 billion to the huge amount Illinois owes to government workers. It's why the state's credit-rating is already the lowest in America.

Our health care was supposed to be free,” said Herbert Bashir.

Bashir was a child welfare specialist who worked 22 years for the State of Illinois. When he retired at age 55 with full benefits, one perk was free health insurance, with very small co-payments. Now, age 67 with a lung disorder, he uses the state plan to cover his Medicare co-pays. When the state moved recently to charge Bashir a first-ever insurance premium of $504 a year, he was upset.

“The main thing is, does the (Illinois) Constitution mean what it's supposed to mean,” asked Bashir.

Bashir's union, AFSCME, and others pointed to the Illinois Constitution's declaration that membership in a pension system "shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired."

It makes no mention of low-cost health insurance, but six of the seven state Supreme Court justices ruled that it's included. Noting that the state's gold-plated plan costs taxpayers about a billion dollars a year, watchdogs had a grim warning about what could come next, especially if the court uses the same reasoning to kill the recently-approved pension reform law.

“Our pension crisis has gotten so bad that without real reforms we're gonna have massive tax increases. We're gonna have huge cuts in services and in our classroom funding, roads, health care, public safety,” said Ted Dabrowski.

The Illinois income tax is scheduled to drop next January from the current 5% to 3.75%. Some argue the income tax rate should go up.

“I think Illinois could do just fine with an income tax rate of maybe 5-1/2% to 6-1/2% and some targeted tax relief to low- and middle-income families,” said Ralph Martire.

The Court is not expected to rule on the all-important pension reform law until next year, perhaps even later.

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