The Illinois Supreme Court will give quick consideration to Chicago's appeal of its 2014 pension overhaul.

CHICAGO — The Illinois Supreme Court will consider Chicago's appeal of the lower court ruling voiding its 2014 pension overhaul on an expedited timetable.

The court issued an order Thursday laying out due dates for written briefs leading to oral arguments in November. The city has said it hopes the state's high court resolves the legal dispute before the end of the year to allow it to plan for its 2016 budget.

In an opinion issued July 24, Cook County Circuit Court Judge Rita Novak overturned the city's 2014 legislation that overhauled two of the city's four pension funds as a violation of the state constitution's pension clause. The reforms to the municipal and laborers' fund took effect Jan. 1.

Mayor Rahm Emanuel and his administration have said they remain hopeful that the high court will reverse Novak's decision and have put off questions over whether the city has a "Plan B" to deal with the looming insolvency of the two funds if the ruling is not reverses.

The city's $20 billion of unfunded pension liabilities have played a central role in dragging down the city's bond ratings, including a downgrade this year to junk-level Ba1 mark from Moody's Investors Service.

The municipal and laborers' funds are on track for insolvency in the next decade without the overhaul. They account for about half of the city's unfunded pension liabilities. The city's contributions to its police and firefighters funds will jump by as much $550 million next year under a separate 2010 state mandate to stabilize local government public safety funds.

The city's reforms cut some benefits while increasing employer and employee contributions to stabilize the two funds.

If the Novak decision holds, it actually provides the city with near-term budget relief because the rejected plan called for the city to make $100 million in higher contributions in 2016. But the decision puts the funds back on a path to insolvency.

Moody's Investors Service previously called the ruling a credit neutral. Standard and Poor's warned of the pressures the city faces if it fails before the high court.

"We will likely lower our GO rating within the next six months if the city fails to incorporate pension contributions in a structurally balanced manner," S&P analysts wrote in a special commentary after the ruling.

Novak's 35-page order draws widely from the high court's May opinion overturning an overhaul of the state government's pension systems, despite the city's contention that its pension changes and legal arguments were very different.

Novak wrote that the high court's opinion "deals with closely parallel issues and provides crystal-clear direction on the proper interpretation of the law."

At the heart of the case is the state constitution's pension clause that considers membership in a pension or retirement system of the state, any unit of local government or school district an enforceable contractual relationship for which "the benefits of which shall not be diminished or impaired."

Novak rejected the city's key legal defense that the overhaul didn't diminish benefits but "preserves" and "protects" them by rescuing the funds from the depletion of their assets while also legally binding the city to actuarially based contributions to fully fund the system.

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