The state’s high court rejected a plan to reduce retirement benefits and increase employee contributions for Chicago city workers, and also ruled that the state’s multi-year collective bargaining agreement is subject to appropriation.
In one case, the Illinois Supreme Court reversed an arbitrator’s decision and lower court decisions on wage increases owed to state employees, ruling that in the absence of a legislative appropriation these wages are not owed. The decision was issued in response to a legal dispute between the state and the American Federation of State, County and Municipal Employees (AFSCME) Council 31, after former Gov. Pat Quinn refused to pay wage increases that the union had previously agreed to temporarily defer.
Quinn maintained that the appropriation authority enacted by the General Assembly did not include enough funding for those wage increases. As a result, approximately 24,000 state employees did not receive compensation required as a part of their collective bargaining agreements. In response, AFSCME sought to force payment of these wage increases through the arbitration process and the arbitrator’s decision in favor of AFSCME was upheld by the circuit and appellate courts. The decision clarifies that multi-year collective bargaining agreements with state employees are subject to appropriation.
In another case, the state Supreme Court affirmed a lower Court decision overturning legislation that reduced the pensions of retired City of Chicago employees, and required current employees and the City of Chicago to pay more into the city retirement systems. The Supreme Court ruled that changes to these constitutionally-protected retirement benefits violated a clause in the Illinois Constitution stating that pension benefits of these city workers and retirees “shall not be diminished or impaired.”
These changes were sought by Chicago Mayor Rahm Emanuel in an attempt to stabilize the city’s pension system. It currently only has about a third of the assets needed to meet the benefits promised to city workers and retirees.