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*** UPDATED x1 *** The “important public purpose” loophole

Monday, Apr 8, 2013

* After going through the standard explanations of why state courts could use the Illinois Constitution’s strict language to strike down most of the pension reforms currently being debated, Laurie Reynolds, the Prentice H. Marshall Professor of Law at the University of Illinois talks about another possibility

The other interpretive path is that no provision of any constitution is absolute, no matter how absolute its language. The U.S. Constitution, for example, has a “contracts clause” that explicitly states “No State shall make any law … impairing the obligation of contracts.” Just like the Illinois pension clause, that clause appears on its face to impose an absolute ban on any law that would impair contractual obligations.

If you were to read the U.S. Supreme Court’s case law interpreting that provision, however, you would find that the court has interpreted the clause to mean that, “No state shall make any law impairing the obligation of contracts … unless the impairment is reasonable and necessary to serve an important public purpose.”

If the Illinois Supreme Court takes this approach to the interpretation of the pension clause, then the constitutionality of any legislative action to solve the pension crisis is going to depend on how clear and convincing the evidence is that the state is in a disastrous fiscal crisis. If the state of Illinois can establish that there are no reasonable alternatives to reducing benefits that have accrued – and that, for instance, tax increases and spending decreases just can’t fill the hole – then I don’t think the Illinois Supreme Court is going to issue an opinion that would in essence push the state of Illinois into default. If, in contrast, a strong case can be made that the state can meet its unfunded pension obligations without running itself into the ground, then the court is more likely to invalidate the legislative cuts.

* Reynolds was also asked about a recent Arizona case

Q: Recently, an Arizona Superior Court overruled an attempt to lower cost-of-living-adjustments for existing employees. Arizona also has a constitutional impairment clause similar to the one in Illinois. What, if anything, can we conclude from this precedent?

Reynolds: Each state is the “master” of its own law. Illinois courts do not have to follow the decisions of courts in other states and the court decision in Arizona is technically irrelevant to Illinois. While courts of one state do occasionally cite decisions from another state, there are remarkably few cases in which one state court uses a different state’s court opinion as a persuasive precedent. On the other hand, state courts routinely parrot federal constitutional and statutory interpretation cases in developing their own jurisprudence, which is another reason why we would not be shocked to see Illinois following the U.S. Supreme Court’s line of analysis with regard to the contract impairment issue.

Discuss.

*** UPDATE *** From a subscriber…

There is, of course, the Illinois Supreme Court’s ruling from Jorgensen v. Blagojevich that draws what appears to be a pretty clear line in the sand.

http://caselaw.findlaw.com/il-supreme-court/1121157.html

Last line of the next to last graph:

    “No principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem.”

- Posted by Rich Miller        


51 Comments
  1. - RNUG Fan - Monday, Apr 8, 13 @ 11:45 am:

    Why would bond holders not be subject to this. Its full of nonsense like the state is somehow going to default or that it has some sort of onerous tax burden.
    I think RNUG said this argument was used once in the depression.
    So there isn’t much precedent for it and I recall that is what the Chief Justice said governed his decisions…..


  2. - Mouthy - Monday, Apr 8, 13 @ 11:47 am:

    Did the people who inserted the pension protectionist language into the state constitution do it so the language could be twisted and an absolute truth could be ignored or as language that basically says hand off the pension benefits? I’d say the latter.


  3. - foster brooks - Monday, Apr 8, 13 @ 11:47 am:

    What are neighboring states tax rates/loop holes verses Illinois?


  4. - Joe M. - Monday, Apr 8, 13 @ 11:51 am:

    I am not an attorney. But, according to Westlaw, the most cited case about the U.S. Constitution’s contract protection clause and states is In U.S. Trust Co. of New York v. New Jersey, 97 S.Ct. 1505. In that case, the U.S. Supreme Court stated:

    “Contract Clause of [U.S.] Constitution limits otherwise legitimate exercise of state legislative authority, and existence of important public interest is not always sufficient to overcome that limitation; moreover, scope of state’s reserved power depends on nature of contractual relationship with which challenged law conflicts.”

    also:

    “If a State could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose, the Contract Clause would provide no protection at all.”

    I am surprised Professor Reynolds didn’t talk about that case.


  5. - RNUG - Monday, Apr 8, 13 @ 11:55 am:

    The State of Illinois is going to have a tough time arguing there isn’t another course, especially since the State is only asking the pnesioners to take a haircut. There are too many documented alternatives. And while I don’t know how it would fly, the pensioners could easily argue it is a “created” crisis.

    As far as other State pension case rulings go, the IL SC has primarily gone with the 1970 Con-Con transcripts and subsequent testimony from those drafters to ascertain original intention. They have also refferred back to pre-1970 contract type decisions. And the IL SC has cited other States in previous pension decisions, mostly NY, as supporting case law. So I could see them considering the other States’ court rulings.


  6. - RNUG Fan - Monday, Apr 8, 13 @ 11:57 am:

    We could leave the university of Illinois to fend for itself and save money there….We can end MAP grants for the private universities….end our participation in the drug war……
    Iowa has a progressive tax rate top at something like 9% …..

    Oh and point out pension underfunding was …just as bad in 1971


  7. - Anon. - Monday, Apr 8, 13 @ 12:00 pm:

    Joe M. beat me to it. What the professor says is right, but the courts are a lot more strict when it comes to letting states get out of their own contracts than they are, for example, in letting them impose a moratorium on residential foreclosures. And the courts allowing impairment of contracts always say that the impairment must by taylored to the crisis, which to me would mean the state has to reneg on bonds and obligations to pay suppliers rather than just singling out its obligations to retirees. The people asserting the “police power” or “emergency” exceptions to the impairment clause ever mention these issues.


  8. - in the know - Monday, Apr 8, 13 @ 12:04 pm:

    i seem to recall some of those constitutional contract impairment cases involving things like racially discriminatory real estate covenants. If so, then invalidating a pension obligation and invalidating a contractual provision that says you can only sell the house to white people would have to be deemed as equivilent “public purposes”. Now Prof. Reynolds is smarter than most of the GA combined and certainly smarter than me, but I’d like to see the case that she views as comparable. And in light of the eventual cost savings of the pension reforms already passed, can we say that bankruptcy is inevitable?


  9. - Captain Illini - Monday, Apr 8, 13 @ 12:06 pm:

    In the end, as has been stated many times here, a court challenge to the Supremes will be a toss-up…however, the GA thinking their fiscal insanity and lack of actually paying their share of pension obligations is a winning argument would be kafka-esque…


  10. - CircularFiringSquad - Monday, Apr 8, 13 @ 12:11 pm:

    was this the same constitution that guarantees the state pays the majority of school costs
    anything is possible


  11. - stratten - Monday, Apr 8, 13 @ 12:13 pm:

    another eggheaded professor with little experience of the real world speaks up…


  12. - WilliamO - Monday, Apr 8, 13 @ 12:22 pm:

    Professor Reynolds’ argument that the jurisprudence regarding the contracts clause of the U.S. Constitution would be persuasive in the interpretation of the pension benefit provision of the Illinois Constitution is weak. The contracts provision of the U.S. Constitution says that no state shall make “any law impairing the obligation of contracts.” She then argues that since this provision has not been interpreted to mean “any law,” but rather to allow some laws, the Illinois prohibition against “impairment” could be interpreted to allow for impairment in some cases. The case she argues for is the situation in which the State is short of money.

    The problem is that the Federal provision obviously cannot have been intended to prohibit all state laws that might impair contracts. If it did, it could have prohibited states from regulating workplace conditions, utility rates, insurance provisions, and anything else that could negatively affect (frequently contractual) business relationships.

    The Illinois pension provision, however, can easily be read — indeed, the most obvious and straightforward way would be to read it — to mean precisely what the words say: the State cannot reduce benefits. Period.


  13. - Be careful what you wish for - Monday, Apr 8, 13 @ 12:29 pm:

    So then the GA can cite the state’s fiscal situation and then enact a progressive income tax? Even though the constitution is clear that the state can only have one rate, no constitutional provision is absolute…


  14. - wordslinger - Monday, Apr 8, 13 @ 12:30 pm:

    I thought the federal Supremes “important public purpose” had to do with eminent domain.


  15. - RNUG - Monday, Apr 8, 13 @ 12:42 pm:

    As far as I can tell, the only “important public purpose” being served by the current crop of bills making their way through the GA is to try to ensure the politicans avoid raising taxes so they can get re-elected.


  16. - Liberty_First - Monday, Apr 8, 13 @ 12:42 pm:

    You can find a professor to make any argument to satisfy some agenda.


  17. - archimedes - Monday, Apr 8, 13 @ 12:54 pm:

    Agree with RNUG. Maybe even restate that the important public purpose is to reduce the income tax (from 5% to 3.75%), rather than avoid raising taxes, in order to get re-elected.


  18. - Fair Share - Monday, Apr 8, 13 @ 12:55 pm:

    The “General Welfare Clause” in the Illinois Constitution can be used to trump the contracts clause under pretty simple and commonly used supreme court rules of constitutional construction, if the court so chooses.


  19. - Norseman - Monday, Apr 8, 13 @ 12:58 pm:

    It certainly would be kafkaesque if the Supreme Court ruled that pensions could be reduced given the clear language of the impairment clause and the court decisions involving the matter.

    Could it happen, certainly. While we would like to place a halo of impartiality on our judiciary, they can be affected by political and personal pressures. We also know that the GA leadership has excluded JRS from the bills to avoid antagonizing the judiciary.

    I don’t take Reynolds analysis too seriously. This was another one of those media talking to an expert story. The experts in these stories tend to speak in generalities. It appears to me that whatever research the two professors put in for the media interview pails in comparison to Eric M. Madiar’s 76 page research paper. Madiar, Cullerton’s legal counsel, did an excellent job discussing convention minutes, Illinois court decisions and other non-state court cases.


  20. - truthteller - Monday, Apr 8, 13 @ 1:07 pm:

    The State fails to make proper pension payments. Uses the money for other purposes. Then cries poverty and wants to be let off the hook.

    Young man kills parents, then begs the court for mercy because he is an orphan.
    There is a parallel between the two arguments, but logic in neither.
    If the state is so broke, why did it give CME, Sears, and the rest of the gang such big tax breaks? And all those years of “legislative initiatives”…


  21. - Dewey Dilligent - Monday, Apr 8, 13 @ 1:11 pm:

    I wonder what they were thinking when they had the constitutional convention in 1970?

    “I would presume that the purpose of this proposal is to make certain that irrespective of the financial condition of a municipality or even the state government that those persons who have worked for often substandard wages over a long period of time could at least expect to live in some kind of dignity during their golden years.” -Delegate James Kemp

    “It is simply to give them a basic protection against abolishing their rights completely or changing the terms of their rights after they have embarked upon the employment-to lessen them.” - Delegate Helen Kinney

    “Benefits not being diminished really refers to this situation: If a police officer accepted employment under a provision where he was entitled to retire at two-thirds of his salary after twenty years of service, that could not be subsequently changed to say he was entitled to only one-third of his salary after thirty years of service, or perhaps entitled to nothing. That is the thrust of the word “diminished.” ” -Delegate Helen Kinney

    “What we are trying to merely say is that if you mandate the public employees in the state of Illinois to put in their 5 percent or 8 percent or whatever it may be monthly, and say when you employ these people, “Now if you do this, when you reach sixty-five, you will receive $287 a month,” that is in fact, is what you will get.” - Delegate Henry Green

    “All we are seeking to do is to guarantee that people will have the rights that were in force at the time they entered into the agreement to become an employee, and as Mr. Green has said, if the benefits are $100 a month in 1971, they should be not less than $100 a month in 1990.” -Delegate Helen Kinney

    Oh, that’s what they meant then. Gee I wonder if that transcript would have any impact on a court decision.

    To be clear, I’m not saying IL should not reform pensions, I am merely pointing out the difficulty of any potential reform effort.


  22. - Captain Illini - Monday, Apr 8, 13 @ 1:30 pm:

    It is not difficult to reform pensions in Illinois…it IS a difficult thing to change the game for anyone already IN the game, unless you’re already a tier 2 employee. Why this is so difficult for the GA to understand may be explained by their unwillingness not to be difficult.


  23. - Name/Nickname/Anon - Monday, Apr 8, 13 @ 1:35 pm:

    Based on those comments it would sound like reducing COLA and increasing the employee’s contribution % might be within reason.


  24. - Fultonfarm - Monday, Apr 8, 13 @ 1:44 pm:

    I wonder about the agenda of these two law Professors.

    Health Insurance was never a contract in terms of a beginning and an ending as is typical with most labor negotiated contracts. I know, I served on three Master Contracts for unviersity faculty for the AFT-IFT.

    For example, I was hired in 1977 and retired in 2006. Health Insurance was a written legal promise both at the beginning and the end of my career. AFSCME did not negotaite this insurance. Indeed AFSCME has never received legal authority from me or other retirees to negotiate health insurance. Anything else is merely ‘extra legal’ until somebody takes it to court. Nice try Quinn, Madigan, but no cigar.

    However, this is not the situation for current employees. That is contractual with a beginning and end. Again, it is legally questionable whether AFSCME can negotiate this for all statewide employees. Obviously, they can unless someone challenges that process. So far no one has questioned it in court.

    As to Cullerton’s plan it still amounts to a diminishment- thus unconstitutional. It may even be unconstitutional under federal property rights laws. So far the United States Code does not allow for State bankruptcy although this is not true for local governments which can file for bankruptcy. Even under this scenario it is complicated as to who get what and how long this would take and how future government revenues would be distributed. Many untested waters here.
    As an added, note since 1971 employees have had a specific .5% taken out for the COLA. Hard to ignore that and I find it interesting that these legal experts make no mention of that reality.

    The authors note various ‘interpretive paths,’ they have a point. We all know judges have their own personal opinions and will use any language or concept to justify their decision. Otherwise there would not be so many 5-4 decisions.
    As to the these legal experts opinion comment that ” to work for a pension reform that accurately identifies the reasonable amount that the state can be expected to pay to support pensions without violating its other duties and commitments to the people of Illinois and one that spreads the pain fairly and broadly, rather than singling out one group to bear the brunt of the cuts.”

    What a cop out and seems that these Professors are looking for an out for the state. Remember the state has a $35 billion GRF budget. A lot of money. Even more telling is the fact that according to a state report issued in 2010, 70% of those in the Medicaid AllKids program are illegal aliens. Illegal itself, YES. But they get around it by not asking legal status. Furthermore, Quinn is pushing to add hundreds of thousands more on the Medicaid roles through the expanded ObamaCare/ACA. So the state must have plenty of money.

    I am looking at legal reasoning and logic- often that plays no role in corrupt Illinois politics. Remember, the legislature made certain that the judges were exempt. That alone tell anyone with any common sense quite a bit.

    P.S. Note that thelaw professors make no distinction between those already retired and other employees. Interesting?


  25. - Michelle Flaherty - Monday, Apr 8, 13 @ 1:49 pm:

    Prof Reynolds has been a Commercial Club mouthpiece on the issue of pro-illegal pension reform from the beginning.
    The “hows” and “whys” of the Pension Clause are easy to understand and find given that the transcripts of the debates are all public records. Dewey Diligent quotes the part that would be hard to get around.
    What Reynolds and other supporters of the Nekritz/Biss/Cross bill want folks to believe is that the Pension Clause should be interpreted just like the U.S. Constitution’s Contract Clause. That view has already by rejected by Illinois courts (point the Google toward Felt and Kraus) and cannot be squared with the Pension Clause’s plain language and history.


  26. - Dewey Dilligent - Monday, Apr 8, 13 @ 1:56 pm:

    Fultonfarm says “As to Cullerton’s plan it still amounts to a diminishment- thus unconstitutional.”

    Wrong. Cullerton offers a choice.

    Peters v City of Springfield 1974

    “It is also significant to note that “the contractual relationship” is governed by the actual terms of the contract or pension. Thus there is nothing to prohibit an employee from agreeing, for consideration, to accept a reduction in benefits.”

    Note: This does say “employee” not bargaining unit, etc. So basically every individual employee would have to agree to any change.


  27. - Frenchie Mendoza - Monday, Apr 8, 13 @ 2:05 pm:


    Thus there is nothing to prohibit an employee from agreeing, for consideration, to accept a reduction in benefits.”

    Right — and if the employee *doesn’t* agree, then there’s no reduction in benefits.

    In other words, real choice: “I agree to offer you something worth $100 for $100 less in your paycheck.”

    If I like the deal, I’ll take it — and my contract is then changed.

    The current deal is: “We’re reducing your check by $100. You can either take X worth $25 or Y worth $25.”

    That makes no sense. I suspect Cullerton has talked himself into this, too — the idea that so long as there’s a choice, it makes no difference that the choosing is forcing you to pick between two reductions. That’s great logic. I wish it’d work with my bank.


  28. - Where will it end - Monday, Apr 8, 13 @ 2:12 pm:

    - Dewey Dilligent - Monday, Apr 8, 13 @ 1:56 pm: says
    “Thus there is nothing to prohibit an employee from agreeing, for consideration, to accept a reduction in benefits.”

    Is a retiree considered an employee?

    Just askin


  29. - Dewey Dilligent - Monday, Apr 8, 13 @ 2:12 pm:

    Frenchie Mendoza should say: ” Right - and if the employee *doesn’t* agree, then there’s no reduction in CONSTITUTIONALLY PROTECTED benefits.”
    (CAPS are added words)


  30. - Frenchie Mendoza - Monday, Apr 8, 13 @ 2:13 pm:

    I’m still mystified why the GA doesn’t think in terms of actual choices worth actual dollars to employees. I realize thee’s no money, but there’s always working hours (for example).

    A short-term reduction in working hours for a long-term decrease in overall pension. I know many folks might consider a 10 hour reduction in the work week (short-term) for a reduction in the pension (long-term).


  31. - Dewey Dilligent - Monday, Apr 8, 13 @ 2:16 pm:

    -Where will it end

    Don’t know? The language is from the IL Supreme court decision, I’m just Dewey Dilligent, not a Supreme court.

    The Constitutional guarantee says “Membership” so both retirees and employees are members. The Peters case was talking about a current employee, but if we agree that both employees and retirees are “members” in the pension system, than we may be able to expand the ‘consideration’ concept to members (both employees and retirees).


  32. - Arthur Andersen - Monday, Apr 8, 13 @ 2:32 pm:

    Guess the good Professor isn’t too worried about her SURS pension lol


  33. - unbiased observer - Monday, Apr 8, 13 @ 2:47 pm:

    there are no actual solutions to this problem, that most of the people (anti pension reform folks) who post on this website would consider constitutional.

    real solutions to this problem include increased revenue and pension reform. pretty much only those two things will have a major impact quickly. QUICKLY is needed as over 30% of state budget will be going towards pension obligation within a couple years.

    so legislators can pass a plan which the anti pension reform crowd considers constitutional but wont really get Illinois out of this financial crater….(pointless)

    or they can pass a plan which actually accomplishes the goal (increased taxes and pension reform) that anti pension reform folks claim is unconstitutional (small percentage of the state’s people, none of which are judges).

    any legislation which works is going to be unavoidably controversial. fair, honest, compassionate adults need to pass legislation that increases taxes as little as possible to get us out of this mess. they need to similarly pass legislation which will decrease pensions as little as possible to get us of this mess.

    wait and see what happens to this state in 2-3 years if there is no pension reform. it will get painfully interesting around here.


  34. - steve schnorf - Monday, Apr 8, 13 @ 2:50 pm:

    Lots of whislin’–makes sense, big graveyard.


  35. - Anyone Remember? - Monday, Apr 8, 13 @ 2:54 pm:

    Didn’t Eric Madiar’s analysis go through all this? Essentially, current and retired employees in 1970 were afraid that government(s) would abandon their retirees and close down the pension programs (particularly Home Rule units of local government). The constitutional guarantee was to prevent that from happening.


  36. - archimedes - Monday, Apr 8, 13 @ 3:14 pm:

    Eric Madair also opined that the protection extends to both earned and yet to be earned benefits. Yet SB0001 (from Cullerton) reduces benefits to be earned (future salary increases not counted toward pension if you choose to keep COLA) and Eric Madair was present at committee to testify that the choice/consideration was OK.

    Therein may be the reasonable compromise. Preserve all benefits earned by past service (including COLA) and change (reduce) the benefits going forward to a reasonable extent. This is also consistent with ERISA that governs private pensions (anti cutback rule). This reduces the cost as much as you can. Fill in the gap with revenue.


  37. - Dewey Dilligent - Monday, Apr 8, 13 @ 3:36 pm:

    @archimedes

    I don’t know if freezing the salary going forward is a direct diminishment. Yes the benefit would be smaller than it would have been, but it doesn’t reduce the benefit currently. That is to say a future benefit would be larger, but the current benefit does not become smaller.

    This issue is somewhat addressed in Kraus v Board of Trustees 1979. The appellate court’s decision said:

    “He(Kraus) is entitled to receive benefits under the relevant sections of the Pension Code as in effect at the time the constitutional provision became effective in 1971.
    All we have decided is that section 5 of article XIII prohibits legislative action which directly diminishes the benefits to be received by those who became members of the pension system prior to the enactment of the legislation, though they are not yet eligible to retire. Legislative action directed toward another aim, but which has an incidental effect on the pensions of the employees would ultimately receive, is not prohibited.
    However, once again, all we have decided is that Pension Code modification changing the basis upon which pension benefits are directly determined cannot be applied to diminish the benefits of those who became members of the system prior to the Statue’s effective date.”

    So, I guess if you implement the salary freeze the benefit calculation at that exact moment is not diminished. So, if I was a public employee right now and my pension would be 15,000 a year, and then the cullerton salary freeze is implemented my pension benefit today is still $15,000 a year. Thus, perhaps, not a dimishment.

    Thoughts?


  38. - mid-level - Monday, Apr 8, 13 @ 3:53 pm:

    The argument could be made that any amount of money the State “saves” by modifying current member’s pensions would, ipso facto, be a diminishment of member’s benefits.


  39. - RNUG - Monday, Apr 8, 13 @ 3:54 pm:

    Dewey Dilligent

    Keep reading … There was one that changed to the retirement age (downward), which shortened both the service time and prospective salary increases, resulting in a potential diminishment of the future pension. Ruled they couldn’t do it to existing employees.

    If you take the current rulings and the pension clause at face value, nothing can be changed for anyone hired before 1/1/2011 unless you can trick the employee / retiree into contractually agreeing to a change that is probbaly not in their favor.


  40. - archimedes - Monday, Apr 8, 13 @ 4:19 pm:

    “If the state of Illinois can establish that there are no reasonable alternatives to reducing benefits that have accrued – and that, for instance, tax increases and spending decreases just can’t fill the hole”

    I think, should HB3411 pass, it would be judged in a context not present in previous cases - the disastrous fiscal crisis. That said, is a reasonable alternative to keep the income tax at it’s current 5% rather than lowering it to 3.75%? Or, for equivalent dollars as the HB3411 savings, lower the income tax to 4.35%?

    There is a lot at stake for both sides of the issue. Members of the retirement systems can’t live in denial of how far this has gotten - and have to be willing to entertain reasonable reductions. HB3411 goes too far - but changing COLA to 2.5% or 3% simple might be reasonable.

    It seems like taxpayers and supporters of pension cuts have come to think of pensions as a gratuity - something that really wasn’t earned. It is every bit earned as the paycheck we all get.


  41. - Rod - Monday, Apr 8, 13 @ 4:32 pm:

    I suspect that Professor Reynolds’ position that no provision of any constitution is absolute will hold much more weight in the situation of a pension default than in reviewing a law that is designed to forestall a default without raising taxes or further reducing state services.

    In a default situation a court if it took a literal reading of the Illinois Constitution could order the Assembly to make good on pension payments without reduction. Or it could follow a more normal route of treating the default just like other pension failures are dealt with by the Pension Benefit Guaranty Corporation (PBGC).

    The maximum pension benefit guaranteed by PBGC is set by law and adjusted yearly. Workers who retire at age 65 can receive up to $4,653.41 per month (or $55,840.92 per year) under PBGC’s insurance program for single-employer plans.
    Effectively in this situation the State of Illinois is the PBGC for the public sector pensions if they go into default.

    While the Illinois Supreme Court could order the State to pick up the full cost of a failed pension system, I agree with Reynolds that they will find a way to cap the state’s liability. Using the PBGC concept of a maximum pension benefit would appear to be the logical way to go.
    I do think it’s possible that the Illinois Supreme Court will throw out some of the pension fix it proposals if they are litigated. But in an actual default the situation may be different.


  42. - Old and in the Way - Monday, Apr 8, 13 @ 4:48 pm:

    Back home in Illinois a few days and the rats come scurrying out of their holes. Reynolds is very closely associated with business interests in Chicago. He is also a “professional expert” nothing really new about that, I use the, all the time. The key is I KNOW what they are going to say in the “expert” testimony and its what I pay them for. Consider Reynolds as a “paid” expert and let’s move on.

    This is actually refreshing for me. I’m dealing with BP and that bunch in LA. I’ll be following this from LA later in the week.


  43. - Quiet Sage - Monday, Apr 8, 13 @ 5:04 pm:

    A review of the 1970 Constitutional Convention history shows that the pension language in Article 13, Section 5 was intended to be ironclad. It explicitly protects pensions in two separate ways: first, by saying that they are a contractual obligation; second, by declaring that they may not be “diminished or impaired.” Through its double protection, the protection which the Illinois Constitution provides to pension benefits goes beyond the Conctracts Clause of the U.S. Constitution.

    Eric Madiar’s excellent long article on this subject convincingly refutes any counterargument that vested public pension rights in Illinois can be unilaterally reduced through legislation. For several years, the supporters of pension reduction have been stymied by his well-reasoned arguments. Suddenly this year, a group of conservative professors have come up with an attempted refutation based on the state’s alleged “police powers.” Pension reduction proponents in the General Assembly have bought into these arguments. However, the arguments are weak at best. They have no real basis in law or Illinois constitutional history.


  44. - Quiet Sage - Monday, Apr 8, 13 @ 5:41 pm:

    Abstract of Madiar article on public pensions:
    http://works.bepress.com/eric_madiar/3/


  45. - Old and in the Way - Monday, Apr 8, 13 @ 5:54 pm:

    In rereading my post I inadvertently referred to Professor Reynolds as “he”. This was in error and most embarrassing since I have met the professor on several occasions. My apologies. However, this mistake does not alter my observation or the reality of the situation. SHE is a “paid” expert, ’nuff said.


  46. - unbiased observer - Monday, Apr 8, 13 @ 6:27 pm:

    Archimedes is correct….one cant discount the uniquely disasterous fiscal crisis illinois is experiencing when looking at a judicial review of pension reform legislation.

    it will have a large impact on the process. the general public (and unfortunately most of our feeble legislators) is only just now realizing the calamitous future for our state if pension reform is not enacted in conjunction with some revenue increase.

    we can review case law, constitutional language, ad nauseum. but at some point some judges are going to sit down and make a decision and to think that the Illinois fiscal implosion wont be taken into account during that process is foolhardy.

    and it should be taken into account.


  47. - RNUG Fan - Monday, Apr 8, 13 @ 7:14 pm:

    http://www.telegraph.co.uk/finance/financialcrisis/9980244/Portugal-austerity-plan-frays-US-loses-patience-with-Europe.html

    I know its irrelevant to our cc spokeslawyers but Port has a REAL financial crisis and the courts said NO to Constitutional benefits.
    They could get a brain and leave the Eurozone We cant leave the dollar zone

    Lew Could come back and tell his boss and Quinn/Madigan that austerity is stupid


  48. - RNUG Fan - Monday, Apr 8, 13 @ 8:07 pm:

    NYT Sunday reported on the LA mayors race. Public and Private unions split on candidate because one voted to cut pensions for new hires ( seems to be a local problem in CA reverse of Illinois)
    The story said the unions were the only game in town or there would be no turnout in this low turnout election.
    I would be happy to let the private sector do as they please in the general. I want to see the public spend on primaries


  49. - Anon. - Monday, Apr 8, 13 @ 8:39 pm:

    ==we can review case law, constitutional language, ad nauseum. but at some point some judges are going to sit down and make a decision and to think that the Illinois fiscal implosion wont be taken into account during that process is foolhardy.

    and it should be taken into account. ==

    Fine. Then let them renege on bonds, obligations to vendors, and revenue sharing with local governments. The obligations to retirees are only part of the state’s financial liabilities, why should theirs be the only ones cut?


  50. - unbiased observer - Monday, Apr 8, 13 @ 9:26 pm:

    anon

    dont worry, they will all be cut (some already are), with the possible exception of bonds, which isnt really fair, but probably will work out that way.


  51. - Nickypiii - Tuesday, Apr 9, 13 @ 8:54 am:

    The State of Illinois must pay the debts owed by the Constitutional clause about dimished pension benfits. Why is that stillup for debate. These elected state officials have too come to that realization before any real progress can be made to reduce the States pension liability. Posturing is all were seeing right now! “Look I tried to do something” is going to be the 2014 re-election mantra! Revenue collections are still too low in Illinois! 10 billion in unpaid State bills. The 5% income tax rate has barely covered the States’pension liability each year. We need to have a plan to PAY THESE PROMISES!


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