CHICAGO — An Illinois judge on Tuesday dismissed litigation challenging a state overhaul of retiree health care benefits after concluding that strict protections afforded to pension benefits in the state constitution don't extend to the health care perk.

The ruling dismissing the consolidated lawsuit represents a blow to public unions and a rare bit of good fiscal news for the state. Agreement on pension reforms to restrain skyrocketing annual pension payments and chip away at $95 billion of unfunded liabilities has eluded the General Assembly, but lawmakers were able to pass legislation revamping the state's other post-employment benefits last year.

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