Illinois Gov. Pat Quinn violated a union contract with nearly 30,000 state workers by refusing to give them a pay raise July 1, an arbitrator ruled Tuesday.
Edwin Benn ordered Quinn to start paying the 2 percent increase and provide back pay within 30 days.
"As a matter of contract, the state cannot simply refuse to pay the increase," Benn wrote in his opinion.
Quinn's administration said the matter envelops broader issues than the arbitrator could consider and that the Democratic governor will appeal in state court.
The raises are promised in a contract with the American Federation of State, County and Municipal Employees. But Quinn has argued he doesn't have to pay them because lawmakers, electing to spend $2 billion less this fiscal year in a budget crisis, didn't include enough money for them.
The administration says the increases would cost about $75 million for the fiscal year that ends next June.
"Funding these raises would mean that these agencies would not be able to make payroll for the entire year, disrupting core services for the people of Illinois," spokesman Grant Klinzman said, referring to the agencies where the state employees work.
Quinn officials estimate if the state is forced to pay the increases, 14 agencies would face a $200 million deficit by year's end, including $90 million in the Department of Human Services and $57 million in Corrections.
AFSCME applauded the decision.
"It makes clear that the governor cannot simply break a contract at will," Henry Bayer, the union's executive director, said in a statement. "We call on the governor to keep his word and accept the arbitrator's clear ruling to avoid further costly litigation."
Benn also noted in his order that union had agreed to concessions to help the state during the fiscal crisis. Those included delaying half of the 4 percent raise union workers were supposed to get July 1.
The arbitrator acknowledged he could only decide contractual issues and not technical legal or constitutional matters. They include Quinn's argument that the state Constitution doesn't allow the state to spend money that hasn't been appropriated.
But Benn said if the state prevails on that argument, the idea that unions would agree to money-saving multiyear contracts is "probably dead" because unions won't trust government bodies to live up to agreements down the road if budgets tighten.
That could cost taxpayers, wrote Benn, who even quoted rocker Bruce Springsteen's 1992 release, "With Every Wish" on the matter: "With every wish, there comes a curse."
Quinn also argues that state labor law allows multiyear contracts contingent on "the appropriation power of the employer." His staff argues that means paying increases in the out years of a contract is based on whether the money is appropriated.
The union disputes that interpretation.
AFSCME spokesman Anders Lindall said if the state appeals Benn's ruling, the union will press a federal lawsuit it filed 10 days ago claiming constitutional violations against contract impairment, providing for equal protection of the law, and breach of contract.