DeKALB – Northern Illinois University, already facing millions of dollars in state cuts, could be further pinched by the recent Illinois Supreme Court pension ruling.

Unless Illinois raises taxes, the decision likely means the university will receive less money, said Carl Campbell III, an economics professor at NIU.

The Supreme Court’s ruling dealt with a lawsuit filed by retired employees, state-worker labor unions and others. It also was watched closely at the local level by city officials – including in Chicago, facing its own pension crisis – and school boards struggling with fewer dollars. Campbell said other measures could include spending reductions in other areas and raising revenue from other sources, such as gambling, Campbell said.

“So, obviously, because more state revenue has to go to retirees, there will be less money [for the university],” Campbell said.

NIU officials had already expressed concern over a $387 million cut in higher education funding proposed by Gov. Bruce Rauner in his first budget address to the Illinois General Assembly earlier this year. Under the plan, NIU would face $29 million reduction in state funding that represents about 6.8 percent of the university’s $425 million budget for the 2014-15 school year.

Campbell noted that although NIU employees would receive benefits because of the court decision, the university would still have to deal with the budget deficit.

“It’s a mixed bag,” he said. “In some ways, it’s good.”

University officials couldn’t be reached Monday for comment about how the decision might affect the school’s budget.

Local lawmakers said they had foreseen the decision of the Illinois Supreme Court on the 2013 pension reform law being ruled unconstitutional.

In a unanimous decision Friday, the seven justices threw out the law that sought to lower benefits for existing and future state government retirees as blatantly violating the Illinois Constitution

clause that prevents pension benefits from being “diminished or impaired.” They also all but scoffed at the state’s argument that its sovereign “police power” to take emergency action in times of crisis allows it to override the constitutional provision.

Illinois now has to find another fix for its pension crisis as it has to tackle a $111 billion deficit in funds necessary to cover its employee retirement obligations. The state faces a $6 billion shortfall in the fiscal year that begins in July.

The plan rejected by the justices was designed to whittle down the shortfall over 30 years, gradually but significantly slicing back pension benefits by erasing a 3 percent annual adjustment.

Several DeKalb-area elected officials said they weren’t surprised by the decision.

State Rep. Bob Pritchard, R-Hinckley, said he had expected the Illinois Supreme Court to rule plan unconstitutional.

“The [Illinois] Supreme Court upheld my suspicion,” he said.

Pritchard said pension obligations now consume 25 cents of every dollar in the state’s total budget. To address the issue, Pritchard said government leaders need to respond by bringing lawmakers of both parties together to discuss changes that would affect what employees have earned and what retirees are receiving.

State Sen. Dave Syverson, R-Rockford said the decision means lawmakers now will have to go back to the table to come up with an alternative.

“It’s not fair to retirees to have that uncertainty ... hanging over them,” Syverson said.

Rauner advocated for a different pension overhaul proposal he said would save the state $2.2 billion in the fiscal year starting in July. His plan would move all state workers to a less-generous plan that lawmakers approved for people hired after 2011. Others could choose to join a 401(k)-style account.

Syverson said that because of the budget deficit, there will have to be budget cuts or tax increases.

“Either way, there’s going to be cuts, or they will be lessened to some degree depending on how much taxpayers are willing to pay,” he said.

In 2013, Illinois lawmakers approved a pension reform bill that cut benefits for current and retired state workers. After Friday’s ruling, Pritchard said he expects rating agencies to downgrade the state’s credit rating, which would make it more expensive for the state to borrow money.

“All parties should come to the table and decide how they can make the pension reform sustainable,” he said.

While Pritchard suggested there were options for raising additional revenue, others questioned whether raising taxes was a viable solution to the problem.

State Sen. Tim Bivins, R-Dixon said the 2013 pension reform wasn’t constitutional.

“My objection in the past was it didn’t change anything,” Bivins said. “A lot of our tax dollars have been used as campaign dollars and the habits haven’t changed.”

Before raising taxes, Bivins said officials need to address corruption and overspending.

“We don’t have a bill at this point, but that could be something that we may see,” he said.

• The Associated Press contributed to this report.