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The pension militia?

Monday, May 19, 2014

* Make sure to read the last sentence in this section of Doug Finke’s latest column

The state finally filed its response last week to the five pension-reform lawsuits.

It essentially raised the arguments most thought it would. The pension debt is so severe that the pressures it was putting on the state’s efforts to meet its other obligations justifies the reforms.

Opponents of the reform law have argued pension benefits represent a contract between the state and public employees and thus cannot be changed. The response from the state, though, says the extraordinary nature of the problem allows the state to modify those contracts, including those established under the pension-protection clause of the Illinois Constitution.

At least, it appears that way. The pension-protection provisions are under Article XIII of the state Constitution. The state’s response makes reference to Article XII, which deals with the militia.

Oops.

- Posted by Rich Miller        


52 Comments
  1. - Kerfuffle - Monday, May 19, 14 @ 9:46 am:

    Too funny!


  2. - Mr. Big Trouble - Monday, May 19, 14 @ 9:49 am:

    Article XII, Article XIII, what does it really matter.. ITS JUST THE LEGAL REPRESENTATIVES OF THIS STATE , MAKING ARGUMENTS REGARDING ONE OF THE MOST IMPORTANT ISSUES THIS STATE HAS FACED IN DECADES. How incredibly embarrassing, how sad that we live in a state with such incompetence . Small wonder people want to leave this state!


  3. - x ace - Monday, May 19, 14 @ 9:52 am:

    Article XII - makes sense, gives Power to ” Suppress Insurrection “


  4. - Oswego Willy - Monday, May 19, 14 @ 9:52 am:

    Seems like a lot of room to have an unconstitutional ruling have legs.


  5. - wordslinger - Monday, May 19, 14 @ 9:59 am:

    Geez, don’t tell the Decatur Militia, they might march on the Dome.


  6. - Wensicia - Monday, May 19, 14 @ 10:01 am:

    Great, bring the NRA into this. Heh.


  7. - wapak - Monday, May 19, 14 @ 10:02 am:

    Aside from this typo, the substance of the state’s response was very weak. There is no question which way this case comes out if it is decided solely on legal merits.


  8. - Norseman - Monday, May 19, 14 @ 10:04 am:

    To arms, to arms we need to protect our pensions!


  9. - Anonymous - Monday, May 19, 14 @ 10:10 am:

    Mr. Big Trouble - people want to leave the state because a Roman numeral typo in a brief in a downstate state court case? Pushing that meme a little hard, aren’t we?


  10. - Kerfuffle - Monday, May 19, 14 @ 10:12 am:

    So the AG is saying that we are in a state of war with the Pension Systems and as Commander and Chief PQ is exercing his rights in suspending Paragraph 5 of Article XIII - Pension and Retirement Benefits. Very Licolnian!


  11. - OVERSIGHT - Monday, May 19, 14 @ 10:24 am:

    If we stopped using the fleet of state aircraft to fly in Prairie Chickens at the cost of $1,166 each, and other similar boneheaded decisions like this in every facet of state government, we would have enough money to pay the pensions, and drag the state out of debt.


  12. - How Ironic - Monday, May 19, 14 @ 10:27 am:

    @ Oversight:

    No we wouldn’t.


  13. - OVERSIGHT - Monday, May 19, 14 @ 10:32 am:

    @ How Ironic:

    ” …and every other boneheaded decisions…” it all adds up at the end of the day!


  14. - OVERSIGHT - Monday, May 19, 14 @ 10:35 am:

    AFSCME Brigade just took Camp Lincoln and SERS is flanking Camp Butler….OMG!


  15. - VanillaMan - Monday, May 19, 14 @ 10:37 am:

    “Our only possible solution to the disaster we have been personally creating over the past generation is to begin ignoring our state constitution, then maybe, perhaps, we can get a fresh start in crafting new solutions, that could, maybe, perhaps, possibly work.”

    This is our constitution. These are the conditions. These are the limits. This is the reality. You wanted the office. Fix the mess you and your political leaders have taken twenty years to create. If you think you can’t do it - get the hell out of office and never run for another one again.

    Your choice. Stop looking at the lawyers to save you from your own disasters. Obey the law. You knew this was going to be bad, when you made it bad all those years ago.


  16. - Federalist - Monday, May 19, 14 @ 10:37 am:

    Incredibly weak defense by the state.

    Maybe Madigan does not have her heart in it or she assumes that her dad is right and that he knows the ISC will back the state.


  17. - Norseman - Monday, May 19, 14 @ 10:39 am:

    Wow, lighten up folks. It’s a typo that most of us missed. Like wapak said, it was a poor response but the typo will not be relevant to any decision. Let’s have fun.


  18. - Chris - Monday, May 19, 14 @ 10:39 am:

    “” …and every other boneheaded decisions…” it all adds up at the end of the day!”

    Like prior ‘unfunded’ increases in pension benefits! If we just undo those, then we’d have enough money for the rest of the pensions!

    Or something like that.


  19. - Soccertease - Monday, May 19, 14 @ 10:45 am:

    SECTION 5. PRIVILEGE FROM ARREST
    Except in cases of treason, felony or breach of peace,
    persons going to, returning from or on militia duty are
    privileged from arrest.
    (Source: Illinois Constitution.)

    Maybe Lisa and PQ have a militia plan.


  20. - Kerfuffle - Monday, May 19, 14 @ 10:47 am:

    OVERSIGHT —–AFSCME Brigade just took Camp Lincoln and SERS is flanking Camp Butler….OMG!—-

    They’ve begun firing their cannons at the state house. It looks as if they are using cow pies as ammunition. Oh the humanity of it all!


  21. - Secret Square - Monday, May 19, 14 @ 10:48 am:

    “AFSCME Brigade just took Camp Lincoln and SERS is flanking Camp Butler”

    Probably training maneuvers for the long anticipated Missouri invasion :-)


  22. - Archimedes - Monday, May 19, 14 @ 10:49 am:

    If we arm the prairie chickens we have a shot at Squeezy!
    No rules, no holds barred!


  23. - UIC Guy - Monday, May 19, 14 @ 11:03 am:

    At the moment the pension systems are supposed to be run on a pre-payment basis: the annuity I’ll receive when I retire comes out of the money paid by me and (supposedly) by the state while I am working, and invested by (in my case) SURS. It would be possible to switch to a pay-as-you-go system, where the annuities paid out in any given year come out of the money received from current workers and from the state in that year. Doesn’t that possibility further undermine the state’s claim that it cannot afford the promised annuities?


  24. - Secret Square - Monday, May 19, 14 @ 11:07 am:

    “As God is my witness, I thought prairie chickens could fly!”


  25. - Oswego Willy - Monday, May 19, 14 @ 11:21 am:

    ===Seems like a lot of room to have an unconstitutional ruling have legs.===

    This was snark.

    - Secret Square -, you are On It, as - Norseman - understands…


  26. - wordslinger - Monday, May 19, 14 @ 11:22 am:

    –“Our only possible solution to the disaster we have been personally creating over the past generation is to begin ignoring our state constitution, then maybe, perhaps, we can get a fresh start in crafting new solutions, that could, maybe, perhaps, possibly work.”–

    Who you quoting there, VMan, Mr. Strawman?

    You make up a quote, then respond to it, lol?


  27. - VanillaMan - Monday, May 19, 14 @ 11:27 am:

    Hey - it works for the President.


  28. - orzo - Monday, May 19, 14 @ 11:30 am:

    They better come up with a better defense than this. Does the GA have a Plan B?


  29. - olddog - Monday, May 19, 14 @ 11:38 am:

    @ OVERSIGHT 10:24 and 10:32 === … it all adds up at the end of the day! ===

    No it doesn’t.


  30. - Louis G. Atsaves - Monday, May 19, 14 @ 11:47 am:

    Had a chance to read the entire Madigan argument. The conclusion reached is the Constitution allows for exceptions to public employee protections in pensions, although the exceptions are inferred and not directly stated. That doesn’t seem to be a winning argument. She also argued to the substantial harm to the Illinois economy resulting from the current pension crisis, something I haven’t seen in any press reports to date. The Article XII typo is pretty funny.


  31. - Arizona Bob - Monday, May 19, 14 @ 11:54 am:

    The state’s case seems almost suicidily weak. The crisis developed not because of some unforceable event that prevented the GA from funding the pensions, but from the GA making unconscionable, unnecessary and unjustified pension giveaways to the detriment of the state and citizens, then failing in their obligation to fund their unfair largesse. How can they get around that? Did Madigan just pass this knowing it would be overturned?

    Eventually what will need to be done is shifting costs for pensions from the state to the originating authorities; universities, K-12 public schools, etc. This will need to be done in a phased approach, and of course teacher strikes will need to be prohibited, because the pension costs will need to be fairly shared between employees and employer by local contract. IMRF seems to work the best amongst the pension plans. We need to get as close as we can to that model.

    New staff will need to have a 401K plan, where matching funds from the employer will be established based upon available district funds.

    With local school employers and employees will be having to pay the full pension costs for staff, there will be a strong incentive to stop those “end of career spikes” that add as much as 16% to lifetime pension payouts without the employee properly funding the increase.

    The big legal question is can the 3% increases be changed to rate of inflation (or 0) either before or after retirement, and can employees who have not yet retired receive pensions under the current system for value earned, and then have the benefits modified for pension payments and benefits moving forward.

    I really hope the Supremes take this opportunity to clearly define what can and cannot be done constitutionally regarding modifying pensions.

    Considering the quality of that judiciary, however, I find that unlikely.


  32. - Makandadawg - Monday, May 19, 14 @ 12:19 pm:

    So they started this fight with a badly written law that still has a chance to go into effect and now back it up with a weakly drafted defense that no one is really buying. Can this be all the powerful legislature leaders are bringing to this battle? They must have more ammunition in hiding waiting for the final run up to the ISC. What are they holding back?


  33. - Jack Handy - Monday, May 19, 14 @ 12:26 pm:

    So what’s the odds the lower court rules the bill is unconstitutional and the supremes decides to not hear the case at all?


  34. - Sir Reel - Monday, May 19, 14 @ 12:56 pm:

    If the argument is the problem’s so big, the State’s so broke and the economy’s so weak that the constitutional language can be ignored, then can this happen again in 20 or 30 years? We know politicians will avoid future obligations and the economy’s cyclical, so there’s a good chance.


  35. - Ghost - Monday, May 19, 14 @ 1:16 pm:

    == If the argument is the problem’s so big, the State’s so broke and the economy’s so weak that the constitutional language can be ignored, then can this happen again in 20 or 30 years? ===

    Why wait 20-30 years? Lets just stop paying our debts and call everythign we have contracted for as seized under the States eminent domain using our police powers to set aside our contractual obligations to pay.

    After all, why pay the 7 billion in back logged bills if we can just say… police powers, we are not gonna pay….

    Also I would note the State can change the constitution to remove the pension protection. So it is not without a solution to the problem. The State is just trying to get around the system for changeing the constitution by using a police powers argument, which means we can change any provision we need, such as Judges salaries…. if we hadnt bribed the judges by leaving their overgenrous pensions alone.

    Judge retirment take home is 80% of a couple hundred thousand on average after only 20 years of work and almost no contribtuions, and they get 3% increases on top of that!


  36. - Federalist - Monday, May 19, 14 @ 2:05 pm:

    @Arizona Bob,

    Can you be specific as to why the IMRF model seems to be better than the other state pension systems?


  37. - Arthur Andersen - Monday, May 19, 14 @ 2:08 pm:

    Once TRS calls in the Carlyle folks and the black helicopters start swooping in, the battle is over.

    I have to agree with Louis and others about the odd and not very good argument put forth by the AG. To assert that pension underfunding caused Illinois’ economic troubles seems perfectly bass-ackwards from where I sit.


  38. - Federalist - Monday, May 19, 14 @ 2:10 pm:

    “So what’s the odds the lower court rules the bill is unconstitutional and the supremes decides to not hear the case at all?”

    In my opinion the odds of that situation occurring are miniscule. Even if the lower courts rule against the state in totality (I also believe unlikely)the ISC must take the case for political reasons. They can not appear to be ‘chicken’ on this issue.


  39. - Wallinger Dickus - Monday, May 19, 14 @ 2:11 pm:

    Federalist @ 2:05: Can you be specific as to why the IMRF model seems to be better than the other state pension systems?

    Easy. The statutes REQUIRE the munis to make employer specific pension contributions to the IMRF. No funding REQUIREMENTS exist elsewhere in the Illinois public worker pension universe.


  40. - facts are stubborn things - Monday, May 19, 14 @ 3:02 pm:

    I beleive it was a very important ruling by the ISC that the state did not have to make their pension payments. The court was giving difference to the other branch of government. This is powerful because the court ruled the state does not have to make it’s pension payment each year, but the state must pay pensions. This in effect leaves void the states argument that pension paymments have been skiped and the pension debt to great therefore the state must reduce pensions. The court in their ruling — that the state does not have to make pension payments — made clear that the state must pay pensions but the courts are not going to tell them how to do it. It makes not sense for the court to allow the state to skip pension payments and then accept an argument that too many payments have been skiped so the state can not afford the pension payouts. To me the court by allowing the state to skip payments was making it clear you do what you want, but when pensions come do you must pay. The IC is very clear and the courts have ruled that when a statute is clear then there is usually not much need to look much deeper into things.


  41. - facts are stubborn things - Monday, May 19, 14 @ 3:08 pm:

    Based on the states argument, all they have to do in the future is stop making pension payments again and then in 30 years claim a crisis and reduce pensions even further. I would ask the ISC justices this, “what was the perpous of the IL Constituion pension clause if not to protect pensions at a time like NOW. The pension clause was put in at a time and because the state was not making pension payments and the system was dramaticaly underfunded. The states own argument was that the state has underfunded the system so badly that it can not honor the contract. The state made the argument exactly for why we have a pension clause in the IL constiution.


  42. - Rusty618 - Monday, May 19, 14 @ 3:21 pm:

    =Also I would note the State can change the constitution to remove the pension protection=

    That would take a Constitutional Convention, which was last voted down in 2008 by a 2-1 margin. The next one is not scheduled until 2028.


  43. - Rich Miller - Monday, May 19, 14 @ 3:22 pm:

    ===The next one is not scheduled ===

    The GA can put the question on the ballot itself.

    C’mon, get in the game.


  44. - Anonymous - Monday, May 19, 14 @ 3:42 pm:

    They must hear an appeal when a statute is declared unconstitutional.


  45. - Kerfuffle - Monday, May 19, 14 @ 3:52 pm:

    Secret Square - —–“As God is my witness, I thought prairie chickens could fly!”—–

    Of course they can fly only its by plane at governmental expense. I’m not sure what their per diem was but you can be sure it wasn’t just chicken feed!


  46. - Kerfuffle - Monday, May 19, 14 @ 3:58 pm:

    If the GA puts the issue on the ballot and the electorate voted to change the language as it relates to pensions, the question would remain as to how it would impact benefits already earned. If you retired under the old constitution would it afford you protection against changes in benefits?


  47. - Diver down - Monday, May 19, 14 @ 4:04 pm:

    =Also I would note the State can change the constitution to remove the pension protection=
    =The GA can put the question on the ballot itself=

    If they put it on the ballot to remove the protections, would that only be for benefits going forward or does the contract at the time of hire stay in place?


  48. - Federalist - Monday, May 19, 14 @ 4:27 pm:

    @Wallinger Dickus - Monday, May 19, 14 @ 2:11 pm:

    Federalist @ 2:05: Can you be specific as to why the IMRF model seems to be better than the other state pension systems?

    Easy. The statutes REQUIRE the munis to make employer specific pension contributions to the IMRF. No funding REQUIREMENTS exist elsewhere in the Illinois public worker pension universe.

    Well, that’s my answer also, But I thought I would give ArizonaBob a chance to explain his statement. If he truly knows some other important reason and can back it up, I would be pleased to see it.


  49. - Archimedes - Monday, May 19, 14 @ 4:59 pm:

    I’m one that believes we have not seen the extent of the State’s arguments, yet. Much of the State’s response was to simply deny the claims of the plaintiff. Their affirmative response is a collection of other states defenses.

    For example, claiming that there have been multiple COLA increases (in reality, there have been three in the last 45 years) sets the stage to claim the COLA is Ad Hoc and not something that should have been relied upon without ever being changed. That was claimed in Arizona, Rhode Island, Minnesota, and Colorado. It worked in Minnesota and, to an extent, Rhode Island.

    I lean strongly to the State losing, but believe there is much more to come.


  50. - orzo - Monday, May 19, 14 @ 6:11 pm:

    Ghost’s description of judicial pension way off base. They pay in 11% of their salary, hardly “almost no contribution.” They do not average 200K; only the ISC make that much. And the formula has already been changed from the 80%/twenty year vesting Ghost describes.


  51. - Pacman - Monday, May 19, 14 @ 6:29 pm:

    The state can change the constitution but there is also a ex-post facto clause in the constitution, which means the law can’t be retroactive. In my non attorney opinion the ISC will uphold the law for new hires and possibly some current employees, but exclude retirees.


  52. - RNUG - Monday, May 19, 14 @ 9:11 pm:

    - facts are stubborn things - Monday, May 19, 14 @ 3:02 pm:

    You are on top of it!


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