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Cullerton responds

Thursday, Jul 3, 2014

* From Senate President John Cullerton…

Today, the Illinois Supreme Court made it very clear that the Pension Clause means what it says.

The Court cannot rewrite the Pension Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.

The Clause was aimed at protecting the right of public employees and retirees to receive their promised benefits and insulate those benefits from diminishment or impairment by the General Assembly.

If the Court’s decision is predictive, the challenge of reforming our pension systems will remain.

As I have said from the beginning, I am committed to identifying solutions that adhere to the plain language of the constitution

- Posted by Rich Miller        


42 Comments
  1. - Chicago Cynic - Thursday, Jul 3, 14 @ 11:24 am:

    Translation: “Nah, Nah, I told you so, I told you so.”


  2. - Concerned - Thursday, Jul 3, 14 @ 11:26 am:

    And we have a winner already!


  3. - Makandadawg - Thursday, Jul 3, 14 @ 11:28 am:

    Here we go, lots of political posturing and rhetoric to come. Can we at least this time not blame the good people of Illinois who are members of the pension systems for the all the financial troubles of the state.


  4. - Mason born - Thursday, Jul 3, 14 @ 11:30 am:

    What Cullerton misses is that the ruling pretty much said his proposed bill was also off the table. If the consideration offered is also unconstitutuinal than you don’t have any consideration.


  5. - Chicago Cynic - Thursday, Jul 3, 14 @ 11:32 am:

    So pensioners have no responsibility for defending their overly generous out of whack with the private sector benefits with law suits? Sorry - lots of people have responsibility for this disaster including public pension recipients.


  6. - Oswego Willy - Thursday, Jul 3, 14 @ 11:35 am:

    Three tracks are now going to begin;

    Cullerton, Madigan, and the louder call for Rauner.

    Those three are going to be thrusted into the discussion of constitutionality of the plans first and the real solution second(?)

    Quinn? He was no help up to now, actually his absence was more helpful, so if Quinn “Political” Crew can get something out front to help the Governmental, that might be Quinn’s best shot, and do that without alienating Cullerton or Madigan. Tough ask. Big ask.


  7. - Six Degrees of Separation - Thursday, Jul 3, 14 @ 11:43 am:

    So pensioners have no responsibility for defending their overly generous out of whack with the private sector benefits with law suits?

    Sorry, but anytime someone’s constitutional rights are being challenged, the response is usually not passive. Otherwise, we’d probably still have “Jim Crow” laws in some states and prohibitions on all citizens who are not police officers from owning firearms in others. The pension clause is a contract with each individual employee, not a union, and the unions really have no right to bargain away any protections, especially for retirees and non union members.


  8. - Macbeth - Thursday, Jul 3, 14 @ 11:43 am:

    For the love of god, just give current employees a real choice. Current system with current benefits or a decrease in working hours/increase in base pay for a decrease in long-term pension benefits.

    Many would take the short-term benefits over the long-term pension benefits.

    Many employees would take a


  9. - Chicago Publius - Thursday, Jul 3, 14 @ 11:44 am:

    Well done, Mr. President.


  10. - Bill White - Thursday, Jul 3, 14 @ 11:52 am:

    The true back story has been the strip mining of private sector pensions to enrich the billionaire financial class.

    Now, after having swiped 11 of 12 cookies, those same billionaires are saying to taxpayers, “Watch out, that greedy, greedy teacher wants your cookie!”


  11. - Farker - Thursday, Jul 3, 14 @ 11:53 am:

    Yep thanks John for being one of the only adults in the room the past several years regarding these issues. Although I still disagree with your view of what’s consideration. I appreciate your honesty.


  12. - Tobor - Thursday, Jul 3, 14 @ 12:02 pm:

    Thank you Bill White.


  13. - Person 8 - Thursday, Jul 3, 14 @ 12:02 pm:

    ###mason born###

    While that is true, if his bill passed instead there was a slim chance that the unions don’t challenge the law and there is some change in the pension benefits.


  14. - Give Me A Break - Thursday, Jul 3, 14 @ 12:07 pm:

    At what point does AFSCME realize they could be facing the choice of keeping the current pension structure (which the courts will likely force) or, facing the layoffs of huge numbers of state workers because the budget is not going to support the current pension package and keeping the number of state workers level?


  15. - steve schnorf - Thursday, Jul 3, 14 @ 12:10 pm:

    PB, the problem is that it doesn’t require a union to challenge the change or consideration, any individual can do it, and many would. You might be able to construct an argument that no current union member could challenge, them having relinquished their right to such grievances by way of membership in the union, but I don’t see how you could ever preclude retirees or non-union members from going to court.


  16. - Precinct Captain - Thursday, Jul 3, 14 @ 12:10 pm:

    ==- Chicago Cynic - Thursday, Jul 3, 14 @ 11:32 am:==

    People should not defend their constitutional claims in court? Are you kidding? What do you want, a Dred Scott for unions, that unions and union members have “no rights which the right wing is bound to respect”? Maybe gun owners and the those tortured by police too?


  17. - Bill White - Thursday, Jul 3, 14 @ 12:11 pm:

    AFSCME doesn’t have authority to negotiate a reduction in benefits owed to people who have already retired. It’s not their call to make.


  18. - Angry Chicagoan - Thursday, Jul 3, 14 @ 12:15 pm:

    I increasingly wonder at this point whether it matters who wins the election this fall or not. We’re stuck with this decision unless and until there’s a constitutional amendment — and as Give Me A Break above points out above, there’s the risk that even if AFSCME does sign off on a compromise, individual members will sue and win. But I’ll add another thing — huge layoffs of state workers mean vastly fewer people paying into the system, so the tax savings of such a plan would be minimal, especially in a state government that already has a relatively small workforce for the population it serves, and relatively heavy dependence on outsourcing.

    It would not surprise me in the least if, actuarially speaking, the only way out is shafting the independent social service providers and non-profits, and taking everything in house under Tier 2. That way, maybe you end up with a six percent state income tax instead of an eight percent one. But it still leaves open the question of just what on earth municipalities are going to do.


  19. - Mighty M. Mouse - Thursday, Jul 3, 14 @ 12:18 pm:

    The Supreme Court seems intent on locking in the generous benefits the drafters of the Illinois Constitution, their legislative allies and a succession of governors doled out for the next 35 years but put on the figurative credit card year after year and so basically left for their children and grandchildren to have to pay for.

    It looks like the only way out would be to amend the Illinois Constitution.


  20. - F.B. - Thursday, Jul 3, 14 @ 12:20 pm:

    No doubt, Cullerton and Eric Madair have been right from the start on this. But like - Mason Born - above, I gotta think Cullerton’s proposed reform is in doubt now, too. Wasn’t the free health care/3% COLA choice the key to SB 2404? And doesn’t today’s court action to protect health care benifits under the impairment clause suggest that approach is unconstitutional, too? Would love to hear Madair’s thoughts.


  21. - PublicServant - Thursday, Jul 3, 14 @ 12:24 pm:

    Methinks people who keep referring to a needed constitutional amendment need to understand what ex post facto laws are.


  22. - RNUG - Thursday, Jul 3, 14 @ 12:36 pm:

    As I commented in another thread, Cullerton’s choice was “do you want your leg cut off” or “do you want your arm cut off”? It did not have the option of “keep all your body parts” (what you currently have). Since “keep what you have” is a choice under normal contract law, it would have needed the third choice to be valid.


  23. - Roland the Headless Thompson Gunner - Thursday, Jul 3, 14 @ 12:40 pm:

    This is tremendous vindication for Cullerton.


  24. - RNUG - Thursday, Jul 3, 14 @ 12:42 pm:

    Let me say it in plain English, with maybe a bit of hyperbole and dollar rounding:

    Assuming this foretell’s the SB1 decision, the State remains on the hook to pay the full $100B (or whatever today’s number is) back into the pension funds. No way around it, period, end of discussion. The only question is how the State finds the money.

    Going forward, you can change the State Constitution to remove the Pension Clause and that will affect new hires. All it does is lower the cost of funding the new employees’ pensions a bit. So 30 years from now, AFTER you have repaid the $100B, when the newly hired people start to retire, it will cost less.


  25. - louisGAtsaves - Thursday, Jul 3, 14 @ 12:55 pm:

    Just finished reading the decision. Need to go through it again. Burke’s dissent seemed to be reaching at times, but maybe a second reading of it all with help clarify things in my mind. How do you agree, either individually or through a union to sign off on a constitutional protection if you are an individual protected by this language?

    Would any of us sign off on our rights of free speech or right to practice our religion? Right to vote? Own property? Etc. Etc. Etc. And taking it out of the constitution doesn’t seem to solve the liability issue of those existing right holders from collecting what is due them. And it may create new class of aggrieved workers in the process.

    The irresponsibility of underfunding pensions all these years has come home to roost in this State. How that became a Police or Public Safety matter remains pretty much a mystery to me.


  26. - VanillaMan - Thursday, Jul 3, 14 @ 1:03 pm:

    We have constitutional rights as Illinoisans to work for a government and have those wages, pensions and benefits earned as Illinois citizens working for a government, untrammeled by political forces upon retirement from government.

    These constitutional rights were created due to our history of denying citizens their rights to work for their governments, be paid for that work, and to prevent political retaliation.


  27. - concern1 - Thursday, Jul 3, 14 @ 1:05 pm:

    To Chicago cynic….I’m so glad your in Chicago but do us all a favor and just stay there we don’t need you or your opinions south of I-80!


  28. - Apacolypse Now - Thursday, Jul 3, 14 @ 1:27 pm:

    More of the same out of whack benefits for a small group of Illinois retirees, while the vast majority of retirees get left holding the bag. Shame on Emil Jones and all those legislators who voted in those pension enhancements years ago.


  29. - SkeptiCal - Thursday, Jul 3, 14 @ 1:34 pm:

    Over the past 30 years, there were lawsuits that tried to force adequate funding for pensions. All of them were dismissed. If any of those had been allowed to proceed, the game of kick the can down the road would have ended perhaps 2 decades ago. Perhaps the pension systems would still be underfunded, but not to the extent that they are today. Now there is little hope for savings from the so-called “pension reform” bill.
    No matter who gets elected Governor, this will be a budget disaster. Rauner gets the upper hand on being uninvolved. Quinn and the entire G.A. have a lot of explaining to do. Blame may even be placed on several past Governors.
    The real question is, “Now what can we do?” There will be lots of finger-pointing and no answers prior to the election.


  30. - Chicago Cynic - Thursday, Jul 3, 14 @ 1:35 pm:

    Well I’m so glad you public pension folks are not prone to hyperbole given as how you responded to my “we all have responsibility for this mess including pensioners” by comparing my comment to a defense of slavery and Jim Crow laws.

    Give me a freaking break. You and your unions asked for richer and richer pension benefits and absurdly out of whack near zero costs for your health insurance and are now insulted that we point out that perhaps you asked for too much and now we can’t afford it. You may have won this legally, but we the citizens of the state are all going to be the poorer for it. Poorer in higher taxes. Poorer in worse school and social services. We just can’t tax enough and cut enough without an enormous amount of pain. So enjoy your benefits as the state crumbles around you. And lest you think that’s hyperbole, do the math.


  31. - Chicago Cynic - Thursday, Jul 3, 14 @ 1:36 pm:

    And Concern 1, I suggest you also do the math. Without Chicago’s revenue and economic engine, “south of I-80 would be on par with Arkansas from an economic perspective.


  32. - Chicago Cynic - Thursday, Jul 3, 14 @ 1:37 pm:

    http://www.lib.niu.edu/1993/im930215.html

    Dawn called it correctly 20 years ago.


  33. - funny guy - Thursday, Jul 3, 14 @ 1:43 pm:

    Hey Rahm—when do you put the for sale sign on O’Hare and Midway? Neither of these assets provide one cent to the city’s budget–per federal law. I think we can conservatively net about $10 BILLION–which would put a nice dent in the unfunded liability.


  34. - logic not emotion - Thursday, Jul 3, 14 @ 2:02 pm:

    Chicago Cynic: “So enjoy your benefits as the state crumbles around you.”

    You make some good points; but you also make a huge assumption. Many of those pensioners now live in Florida and other places. Changes to the State of Illinois services, tax rates, etc. won’t affect them.


  35. - Chicago Cynic - Thursday, Jul 3, 14 @ 2:11 pm:

    Logic not emotion - great point…unfortunately.


  36. - Mason born - Thursday, Jul 3, 14 @ 2:13 pm:

    Cynic take a breath.

    –but we the citizens of the state are all going to be the poorer for it. Poorer in higher taxes. Poorer in worse school and social services. We just can’t tax enough and cut enough without an enormous amount of pain.–

    Remember the retirees who live in IL will be sending their grandkids to the same schools, paying the same property taxes, and dealing with the same services. The corollary of what you are saying is that instead of everyone feeling some pain we should have the minority feel more severe pain. Pain that BTW they cannot compensate for.

    I agree that P!ss poor leadership had got us into this mess. The ones responsible are we the Voters who decided we wanted low taxes and high spending. It’s kind of like deciding your going to work part time and use your credit cards to spend at full time levels sooner or later the bill comes due. Well it’s due and all of us are going to feel it.


  37. - aufjunk - Thursday, Jul 3, 14 @ 2:21 pm:

    I’ll give this one try.

    “You and your unions asked for richer and richer pension benefits and absurdly out of whack near zero costs for your health insurance and are now insulted that we point out that perhaps you asked for too much and now we can’t afford it.”

    For most of the 35 years that I worked for the state, its pension benefits were the worst in the nation. They are now in the middle range of state pension benefits - not at all “rich”. And the free health insurance was granted by the state in lieu of raises it claimed not to be able to afford - raises that would have kept me earning about 2/3 of what the consultants I worked with were earning. There is one reason, and only one reason, that the pensions and benefits appear to be unaffordable, and that reason is that the legislature was irresponsible in not doing what other states were doing, and what the IMRF has done over the years: funding their pensions. The only way our legislators have performed effectively is in assigning the blame for their poor performance on state employees and retirees. And everyone who overlooks the legislature’s obvious failures and continues to believe their lies is, to put it as charitably as possible, a dupe.


  38. - PRISONER OF COOK - Thursday, Jul 3, 14 @ 2:39 pm:

    I saw the news on the first post just after 9am, WOW indeed. Having now read the subsequent posts and comments even more WOW. It is absolutely clear sb1 is toast; how is the State going to address its fiscal problems now.


  39. - Chicago Cynic - Thursday, Jul 3, 14 @ 2:41 pm:

    Happy to take a breath, but I can do math. The failure of pension reform blows another 1-2 billion hole in a budget that is already billions out of balance. Given the legislature’s political inability to extend the tax increase, how do you think we’re going to fix this mess without the higher taxes and lower services I described.

    It’s not hyperbole. It’s just math.


  40. - Mason born - Thursday, Jul 3, 14 @ 2:55 pm:

    Cynic

    No one is arguing there isn’t going to have to be painful choices made. That being said just because i maxed out all my Credit Cards doesn’t mean i get to demand that Wells Fargo reduce what i owe. Yes this is going to hurt. It is going to hurt every resident of IL. However the sooner we accept that we cannot take back what we owe and treat the Pension system as a debt the same as a bond then the sooner we can act and minimize as much pain as possible.


  41. - Chicago Cynic - Thursday, Jul 3, 14 @ 3:05 pm:

    Mason, too late. Or as Dawn so clearly put it in 1993, “Eventually, the cost of rectifying the problem becomes too great.” Welcome to eventually.


  42. - Mason born - Thursday, Jul 3, 14 @ 3:43 pm:

    Cynic

    with all due respect what is too late? Too late for a painless solution? That sailed a decade ago. If SB1 is upheld that still isn’t a painless solution it just imposes the pain on a very few versus spreading the pain on all. Personally we all need to pay for our collective stupidity at the ballot box.

    Let me show you the optimistic side of this for ALL Citizens of IL. Now that (i am assuming SB1 toast) the pipe dream of pretending we don’t owe the money is off the table maybe we can sit down and deal with the issue like rational reasonable adults. It is past time to bring the spending level and taxing level of our state into balance.


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