SPRINGFIELD — Reversing two lower courts and an arbitrator, the Illinois Supreme Court on Thursday ruled the state is not on the hook for back-pay raises to some 24,000 employees unless the General Assembly passes an appropriation.
AFSCME Council 31 Executive Director Roberta Lynch issued a statement saying the union was disappointed in the ruling and would continue to pursue the matter.
“This was a case about the principle that someone who works for a living … should be paid what they are owed for the work they have done. It was also about the integrity of state government — that when it enters into a contract, it must live up to its terms,” Lynch said.
The case originated in 2008, when Gov. Rod Blagojevich and the American Federation of State County and Municipal Employees struck a deal that called for 15.25 percent in raises to be paid over four years.
In 2010, with the state in financial trouble, AFSCME worked out a deal with Gov. Pat Quinn, successor to the impeached and removed Blagojevich. That deal allowed the state to defer some of the raises.
Rather than the 4 percent increase previously agreed to for fiscal 2012, the raise would be split. A 2 percent raise would be implemented on July 1, 2011 — the start of the fiscal year — and the remaining 2 percent increase would take effect in February 2012, according to the court.
But Quinn’s full budget request for fiscal 2012 wasn’t approved by the General Assembly, and Quinn’s office then said there was not enough money appropriated to cover the 2 percent raise for employees in 14 state agencies.
Subsequent appropriations have brought the amount owed down from $112 million to about $60 million. Today, AFSCME says about 24,000 employees are owed, on average, $2,500 each.
The union originally prevailed as it sought the money for its members. An arbitrator, trial court and appellate court ruled in AFSCME’s favor.
On Thursday, the state’s high court disagreed, ruling that such a payout absent an appropriation would violate the public policy of the state.
According to the Illinois Constitution of 1970, the court said, “multi-year collective bargaining agreements are subject to the appropriation power of the state, a power which may only be exercised by the General Assembly.”
Justice Mary Jane Theis wrote on behalf of the court, which divided 6-1 on the question.
In his partial dissent, Justice Thomas Kilbride said he didn’t believe the appropriations clause of the state Constitution could be used to free the state from contractual obligations.
Kilbride argued the majority’s decision might “further impair the state’s ability to function.”
He said the state “must finance its affairs, purchase products and supplies, contract for public improvements, infrastructure and various services but, apparently, under the majority’s approach, the state has no obligation to pay for those.”
The state has gone nearly nine months without an overall budget because its first-term Republican governor and the Democratic supermajorities in the House and Senate have been unable to come to an agreement. During that time, higher education and many social services have gone without state funding.
Even without an overall budget, the state still is making payments on roughly 90 percent of the bills it covered the previous year because it is paying for costs mandated in continuing appropriations, by court decrees, in its approved primary and secondary education budget and for its debt service.
People who do business with the state, however, also are waiting to get paid. As of Wednesday, Illinois’ unpaid bills totaled about $6.9 billion. Further, the state continues to spend in the red, and Comptroller Leslie Munger has estimated the unpaid bills might hit $10 billion by June 30, the end of fiscal 2016.
Illinois also faces long-term debt including unfunded pension liabilities estimated at $110 billion, thought to be the highest such burden in the nation.