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* As you already know, the Illinois Supreme Court will hear oral arguments today in the pension reform case. Mike Riopell has a pretty good piece about what could happen, so click here to read it.
Our friends at BlueRoomStream.com will have a live video stream. Click here for that. There’s plenty of background material at the Supreme Court’s website, including, apparently, high-rez video, so click here for that. Also, keep an eye on our live coverage post for updates on this topic.
posted by Rich Miller
Wednesday, Mar 11, 15 @ 1:21 pm
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Previous Post: Another bad day for Schock
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Get the popcorn ready, this will be very entertaining. My only concern is the pettiness that’s been going on among some of the plaintiffs attorneys due to legal egos. I have my own beliefs on whose the bad guy, but you can examine that yourself by reading the separate plaintiff filings on the ISC site Rich linked to.
Comment by Norseman Wednesday, Mar 11, 15 @ 1:31 pm
Best of luck to the Plantiffs! May this finally end with resounding win and smack down of SB1.
Comment by Pacman Wednesday, Mar 11, 15 @ 1:37 pm
The plaintiffs have been fighting over splitting the argument time and embarrassingly recently asked the Court to resolve the dispute (it declined). So it should be interesting to see if they tussle in court lol.
Comment by Anonymous Wednesday, Mar 11, 15 @ 1:39 pm
Agreed. Find SB1 Unconstitutional and let the legislature find some actual solutions - and fully fund the pensions as they should have been doing these past years.
Comment by Stones Wednesday, Mar 11, 15 @ 1:42 pm
Have the plaintiffs resolved their petty disagreement over dividing their argument time? They embarrassingly asked the court to do so last week and it predictably declined.
Comment by Anonymous Wednesday, Mar 11, 15 @ 1:42 pm
I hope someone explains to Bruce that once SB1 is found unconstitutional that that doesn’t mean that he can start moving folks into a 401K.
Bruce might have trouble understanding this. He seems a bit slow.
Comment by Frenchie Mendoza Wednesday, Mar 11, 15 @ 1:47 pm
Anonymous - Wednesday, Mar 11, 15 @ 1:42 pm:, last I heard is that DeVito (sp?) is getting 15 minutes and Maduff is getting 5 minutes. Sounds like our best are on the bench. We’ll see in a few minutes.
Comment by Norseman Wednesday, Mar 11, 15 @ 1:50 pm
Interested in the petty lawyer bickering, go to the latest submissions on the Kanerva fee issue. You can find them in the CMS Kanerva website listed in your notice. Getting really nasty.
Comment by Norseman Wednesday, Mar 11, 15 @ 1:53 pm
Not only do I hope that the plaintiffs win. I also hope that the ILSC is completely explicit that people once in the system have a right to the terms under which they joined. Otherwise we’re going to get Rauner coming back and saying that that issue is still not settled, and that billions can be saved by forcing everyone into Tier II, and it will just drag on for years more.
I realize that this point is not is not at issue in SB1, but it would be good if the court made it explicit. Any chance of it, d’you think?
Comment by UIC Guy Wednesday, Mar 11, 15 @ 1:56 pm
=let the legislature find some actual solutions=
Do you have any politically, economically, and constitutionally feasible options? It’s nice to wish we can just expect the Legislature to pull a rabbit out of its hat, but that is not reality. And the problem has been debated long enough that merely saying “Hey Legislature- find an actual solution” without offering any solutions yourself, is ducking the issue and is not going to result in any progress.
Comment by chi Wednesday, Mar 11, 15 @ 1:59 pm
UIC Guy, NO - I don’t see them addressing specifics of other suggestions. I was of the opinion that they would make it short and simple with an opinion simply upholding the Belz ruling. However, I now think they will come out with a more detailed brief explicitly putting a knife in the police powers argument.
Now take that and a dollar and get yourself a cup of coffee.
Comment by Norseman Wednesday, Mar 11, 15 @ 2:03 pm
Chi, alternative solutions have been offered but ignored.
Comment by Norseman Wednesday, Mar 11, 15 @ 2:06 pm
Rather than constantly smacking the legislature for passing SB1, maybe stop a minute and thank them for doing something that might, once and for all, bring some resolution to this issue. Because despite how you characterize it, the court has not unequivocally said what should be considered a benefit, what “diminishment” actually means, or put any real parameters on the Pension Clause. If they hadn’t passed a bill, the Supreme Court wouldn’t have an opportunity to opine. Maybe they knew what they were doing after all.
Comment by duh Wednesday, Mar 11, 15 @ 2:06 pm
@chi, Over the past year or so I have read on this site some pretty good ideas on how to deal with the pension funding problem. There are some very bright folks that post on here that understand both how state government functions as well as the math in all of this. I know members of the GA read this site on occasion and once SB1 is ruled unconstitutional I hope some of these ideas are more fully studied.
Comment by The Dude Abides Wednesday, Mar 11, 15 @ 2:08 pm
Thanks for the answer, Norseman, and for the dollar. If they rule they way you predict, though, I’ll be happy (and well able) to supply my own dollar….
Comment by UIC Guy Wednesday, Mar 11, 15 @ 2:10 pm
“Bruce might have trouble understanding this. He seems a bit slow.”
Frenchie, I just spit coffee all over my keyboard laughing!
Comment by Anonymous Wednesday, Mar 11, 15 @ 2:12 pm
- duh -
The court has already been pretty explicit about protecting anything that affects the calculation of the pension benefit.
Comment by RNUG Wednesday, Mar 11, 15 @ 2:12 pm
Sorry about the double post, the first one was delayed several minutes.
Comment by Anonymous Wednesday, Mar 11, 15 @ 2:13 pm
Norseman-
Like what? I’m not asking that sarcastically or rhetorically. What other solutions are there? From what I’ve seen, there’s basically the Ralph Martire plan and nothing else. And that’s not to denigrate the Martire plan. I like it. But is there really a menu of “alternative solutions” for legislators to choose from?
Comment by chi Wednesday, Mar 11, 15 @ 2:14 pm
- UIC Guy -
Don’t look for a lot of guidance. Like Norseman, I expect it to be either a straight the lower court got it right or back to the lower court to determine if an emergency exists (hint: it doesn’t).
Comment by RNUG Wednesday, Mar 11, 15 @ 2:14 pm
-Norseman-
I think you and I are on the same page when it comes to the attorneys.
Comment by RNUG Wednesday, Mar 11, 15 @ 2:15 pm
Live feed up now…
Comment by PublicServant Wednesday, Mar 11, 15 @ 2:16 pm
- chi -
It’s the same solution it has always been - pay what you owe while waiting for the eventual turnaround due to Tier 2. And if you want to find some money in the current budgets, shift the normal cost to the school districts.
Comment by RNUG Wednesday, Mar 11, 15 @ 2:17 pm
@RNUG - Wednesday, Mar 11, 15 @ 2:17 pm:
Good point on Tier 2. Tier 2 does not get near enough attention — it was a huge deal and is the long term answer along with changing the current pension ramp to a flat fixed payment.
Comment by facts are stubborn things Wednesday, Mar 11, 15 @ 2:20 pm
RNUG: Yes, I expect you (and Norseman) are right. But a guy can hope, right? I’d really like all this nonsense about pensions that Rauner is spewing to go away, and I think it will take complete explicitness by the ILSC to make that happen—or another lawsuit which will distract me for several more years.
Comment by UIC Guy Wednesday, Mar 11, 15 @ 2:20 pm
- Norseman -
Going to be interesting to see exactly what questions the Justices ask …
Comment by RNUG Wednesday, Mar 11, 15 @ 2:20 pm
Duh Duh - Apparently you figure that of the few people in Illinois that don’t know what the word “diminishment” means or what a benefit entails sit on the ISC. That’s like thanking someone for dropping a 50 pound weight on your big toe so you’ll know in the future how bad the pain is…
Comment by Mouthy Wednesday, Mar 11, 15 @ 2:23 pm
The solution to Illinois pension issue is simple, but a political solution is not. This is what all of this has been about — finding a political solution to a legal and moral issue. The road to a legal fix has to go through the ISC to give politicians cover to do what they know must be done.
Comment by facts are stubborn things Wednesday, Mar 11, 15 @ 2:24 pm
Chi, Rep. Fortner was working on plans but kept getting ignored. The problem is that the legislators want to focus on taking it from employees rather than searching for alternatives.
RNUG may remember other alternatives. You also have to remember that Tier 2 - if it survives any future lawsuits - already addresses the problem on a longer term basis. The problem today is the debt, not the normal costs for supporting the retirees.
Comment by Norseman Wednesday, Mar 11, 15 @ 2:25 pm
Reminder to everyone … it can be days to months or longer after today before the court issues a decision.
Comment by RNUG Wednesday, Mar 11, 15 @ 2:26 pm
Yes RNUG. I’ve turned down all the misc. noise around the house to listen for the questions.
Comment by Norseman Wednesday, Mar 11, 15 @ 2:30 pm
I think the ISC will smack SB1 down hard. I believe the court does not see the need to settle a theoretically argument about what is an emergency and could there be one so horrific that changes to pensions (not to mention who knows what else) might need to be made. The ISC simple strikes it down reaffirming the plain and unambiguous meaning of the pension clause. If someday there is a “real emergency” I think we will all know it.
Comment by facts are stubborn things Wednesday, Mar 11, 15 @ 2:30 pm
Justices in the room. Court in session
Comment by PublicServant Wednesday, Mar 11, 15 @ 2:30 pm
Interesting to see the IFT President on one side of the frame and Sen. Raoul on the other.
Comment by Interesting Wednesday, Mar 11, 15 @ 2:31 pm
Shapiro is good… I’d like her argument (if I wanted her to win) that “the benefits of which” refers to the benefits of a contractual relationship, not the benefits of membership in a pension. It makes some sense from a grammatical perspective.
Comment by chi Wednesday, Mar 11, 15 @ 2:44 pm
summary of the State’s position - give us a chance to argue it’s an emergency in the lower court
Comment by RNUG Wednesday, Mar 11, 15 @ 2:44 pm
The justices clearly understand the holes in the State’s position.
Comment by RNUG Wednesday, Mar 11, 15 @ 2:48 pm
Interesting to hear Republican Bob Thomas ask how there can be a fiscal emergency warranting the exercise of police powers to impair pensions when the State allowed the income tax rate to decrease!
Comment by Concerned Wednesday, Mar 11, 15 @ 2:49 pm
RNUG’s summary nails it.
Comment by Concerned Wednesday, Mar 11, 15 @ 2:49 pm
Good point. If we *reduce* taxes — then how can one argue (with a straight face, at least) there’s an emergency?
It’s an emergency for the 1%er’s maybe. Maybe it’s an emergency for Rauner and his vaunted braintrust.
But it ain’t a state emergency.
Comment by Frenchie Mendoza Wednesday, Mar 11, 15 @ 2:55 pm
Court asked expressly, since you say there is an emergency, has the State impaired any other contracts — with bond holders or with vendors? State’s lawyer said that paying invoices “late” is a kind of impairment — but that’s not strictly true. It’s only true if the contract promises payment by a time certain — and even then, the State Prompt Payment Act requires that the State pay its vendors extra when it pays its invoices late. So, in reality, the State has not really “impaired” other contracts. I’m kind of surprised that the State’s lawyer would have misled the court like that.
Comment by ChiTownSeven Wednesday, Mar 11, 15 @ 3:01 pm
- ChiTownSeven -
good point
Comment by RNUG Wednesday, Mar 11, 15 @ 3:04 pm
Retirees position so far - the pension clause means what it means, and even if it doesn’t, no emergency exists
Comment by RNUG Wednesday, Mar 11, 15 @ 3:04 pm
Besides paying vendors late, the State has impaired other contracts, namely the master contract with AFSCME. Beyond that, nearly every contract the state enters in to has an out clause, so if the contract can not be re-negotiated it can simply be cancelled, without ever really impairing the contract.
Comment by Juice Wednesday, Mar 11, 15 @ 3:05 pm
Thought from day one that the key legal arguments would be more around the implications of the “enforceable contract” language, than about “diminished.”
Have become convinced by commenters here, that I am probably wrong.
We shall see.
Comment by walker Wednesday, Mar 11, 15 @ 3:07 pm
- Juice -
And in those state contracts you reference, the boilerplate explicitly says it can be cancelled due to non-funding or non-performance.
Comment by RNUG Wednesday, Mar 11, 15 @ 3:11 pm
Plaintiff’s Atty hits a home run by quoting from the 1884 Parker vs. People of Illinois case, where the justices ruled that “The state’s police power …can only be destroyed or withheld by the people when forming or adopting a constitution.”
Thus, the use of Police Power by the state is still available, but the people have stated that this contract, Pensions, is not subject to it.
Comment by PublicServant Wednesday, Mar 11, 15 @ 3:15 pm
Second time now “…an emergency that arguably the state created.” Going to be a sticking point.
Comment by Name Withheld Wednesday, Mar 11, 15 @ 3:18 pm
Argument that DeVito never presented in his brief (and should have) is that the SB 1 is also violates the “takings clause” of the federal and state constitutions — essentially, SB 1 purports to take away property without any compensation. This an an argument that DeVito should have raised, because the “takings clause” is indeed absolute. If someone has property that is taken by the State, then the State must compensate that person for taking the property. Had he raised that simple constitutional issue, he’d be in strong position to now argue that this “taking” principle (which is absolute) is a twin of (and analogous to) the pension-protection clause.
Comment by ChiTownSeven Wednesday, Mar 11, 15 @ 3:20 pm
- ChiTownSeven -
Given the way the taking clause has been stretched the last decade or so, that might have been a good approach.
Comment by RNUG Wednesday, Mar 11, 15 @ 3:25 pm
Loved the question by Davis, if you say you have no money to meet the pension obligation why did the state reduce taxes by 25%.
Comment by illinifan Wednesday, Mar 11, 15 @ 3:26 pm
RNUG - @2:44 pm
—summary of the State’s position - give us a chance to argue it’s an emergency in the lower court—
And that was pretty much the whole argument. Whole bunch of time asking for a remand.
Comment by Name Withheld Wednesday, Mar 11, 15 @ 3:27 pm
- ChiTownSeven - Wednesday, Mar 11, 15 @ 3:01 pm:
Court asked expressly, since you say there is an emergency, has the State impaired any other contracts — with bond holders or with vendors? State’s lawyer said that paying invoices “late” is a kind of impairment — but that’s not strictly true. It’s only true if the contract promises payment by a time certain — and even then, the State Prompt Payment Act requires that the State pay its vendors extra when it pays its invoices late. So, in reality, the State has not really “impaired” other contracts. I’m kind of surprised that the State’s lawyer would have misled the court like that.
That’s not a mislead. All State contracts include payment provisions, most within 60-120 days. But we never meet that requirement. That is technically an impairment. Also, the Prompt Payment Act does not apply to all vendors. Only some.
Comment by anon Wednesday, Mar 11, 15 @ 3:27 pm
Summary - the State spent a lot of time playing defense. It’s clear the court understands both the issue at question and the cause of the problem. What we’ll have to wait to see is how the court decides to deal with it.
Still feel the retirees get a win, whether it be at this hearing or on return to Judge Belz’s court.
Comment by RNUG Wednesday, Mar 11, 15 @ 3:28 pm
So the Supreme Court gets to decide whether the state loses immediately based on legal argument, or if they instead will lose later based on their lame claim that this situation is a crisis of external making in a degree that basically gives them no other choice. Lose now. Lose later.
Comment by Bobbysox Wednesday, Mar 11, 15 @ 3:29 pm
The “taking clause” argument would not be a slam dunk, which is what the plaintiffs are angling for. Nowhere near as strong as the pension language they are arguing, and might overcomplicate their position.
Comment by walker Wednesday, Mar 11, 15 @ 3:32 pm
I believe retirees win. The state was too two faced on the remand….they asked for the speedy hearing to get a decision by May but they know a remand will result in a decision after that date. If it is such an emergency then remand does not address the emergency issue. It appears the court saw through this argument and will be just done with the matter and affirm the retiree position.
Comment by illinifan Wednesday, Mar 11, 15 @ 3:32 pm
Oow. I have argued before Justice DiVito when he was on the Appellate Court. But when the shoe is on the other foot, he is NOT an impressive oral advocate. Lacking in focus, rambling and not responsive to the questions. Don’t think it will matter as the brief was good but the other 2 attorneys were far better.
Comment by anon Wednesday, Mar 11, 15 @ 3:33 pm
Mad off, SUAA’s attorney, has made the takings argument.
Comment by PublicServant Wednesday, Mar 11, 15 @ 3:34 pm
RNUG, Since it seems clear (at least to me) that SB1 is unconstitutional, what would be the reason(s) why the court would take months or longer to issue a decision? If they will rule that way, wouldn’t it be in the best interests of everyone for them to do that as soon as possible? Thank you.
Comment by Christopher Wednesday, Mar 11, 15 @ 3:34 pm
illinifan - Wednesday, Mar 11, 15 @ 3:26 pm:
Loved the question by Davis, if you say you have no money to meet the pension obligation why did the state reduce taxes by 25%?……
Great question. Underfund the pensions and then kill the revenue source to create the worst case to present to the court.
Let’s remember why the 1970 Constitutional Convention put that phrase in the state Constitution. Because the legislature already was playing games with meeting their obligations and could not be trusted to do so in the future.
Comment by ROLLO TOMASI Wednesday, Mar 11, 15 @ 3:37 pm
I think Bobbysox got it correct. The state may lose now, or they may lose later, but the outcome will ultimately be the same.
Comment by Pelonski Wednesday, Mar 11, 15 @ 3:37 pm
Interesting that the hard questions came from Bob Thomas and Lloyd Karmeier and both focused on limitation of the state’s power viz. the people’s power through the Constitution. A different spin than has usually been put on this case.
Comment by D.P.Gumby Wednesday, Mar 11, 15 @ 3:37 pm
anon - Devito was only asked one question (that I heard) involving whether could see a circumstance where the police powers could affect the pension (gross paraphrasing here). His response was “this wasn’t it.”
While perhaps not a direct yes/no answer, it seemed to this layman to be more persuasive than the state’s defensive and “a question for remand” responses.
To my mind, Devito was far more comfortable than the Solicitor General in presenting his arguments, stutters and gaps not withstanding.
Comment by Name Withheld Wednesday, Mar 11, 15 @ 3:39 pm
Shapiro did a great job spinning their fiction regarding the intent of the clause. She basically stuck to their brief made her points and then responded as best she could to really good questions by the justices.
As feared from what I was told, plaintiffs attorneys didn’t present the case as well as needed. Thank goodness our brief was excellent and effectively refuted the state’s arguments.
DeVito, sigh, was somewhat rambling and slow. I would have preferred he spend more time tearing apart Shapiro’s oral presentation. Needed to focus more on the fallacy that police power has been used to limit a constitutional protection and the argument that upholding the pension clause would somehow violate fed constitution. He briefly touched the reserve powers argument as his time was running out.
Maduff made a couple of good points, but not to the extent to justify his petty fight in the court for his 5 minutes of fame. I would have preferred reducing DeVito’s time and providing an opportunity for 10 minutes for one of the better attorneys.
The questions from the justices didn’t evoke any concern that they were buying the police powers argument.
I hope they put a quick nail in this thing and we can get on to the next battle.
Comment by Norseman Wednesday, Mar 11, 15 @ 3:40 pm
I would fire whomever hired DiVito…
Comment by Outsider Wednesday, Mar 11, 15 @ 3:41 pm
Twenty questions to the state, two to the retirees. In my knowledge of this Court, I think the retirees will win. 7-0 or 6-1 (Burke dissenting as she did in Kanerva). The fact that Thomas and Garman were aggressively questioning does not hide well for SB1. And the fact that the state wants remand after asking for the rocket docket did not sit well.
Comment by Archiesmom Wednesday, Mar 11, 15 @ 3:43 pm
One rule of constitutional construction is that all provisions in a constitution have to be construed harmoniously. The reason that DeVito should have raised arguments regarding “takings” and “equal protection” is that such arguments would buttress his argument regarding the pension-protection clause. In other words, he could have argued that the imperative of pension protection is not subject to exceptions because if it were, such exceptions would run counter to other constitutional principles, including those regarding “takings” and “equal protection” principles. He missed the boat on this one.
Comment by Anonymous Wednesday, Mar 11, 15 @ 3:43 pm
- Christopher -
The court can decide to take their time for lots of reasons. One of the issues may be do they want to shut the door more, or send it back and have to shut the door later?
Remember, if the court rules the retirees are protected, then the court will definitely get blamed for either even more drastic budget cuts to the social / welfare programs (I include education under social) and / or for a “massive” tax increase.
It may take them a while to nail down the exact language they want to use, especially if they decide to slam the door shut AND slap the hands of the General Assembly for creating the problem in the first place. The court may decide to let the GA and Gov twist in the wind and try to solve their current FY15 & FY16 budget problems, then drop the hammer on the GA, figuring if they are going to get the blame anyway, let’s make the GA sweat also. Or they could just decide to issue a quick ruling.
The court blew me away with their Kanaera language; going to be interesting to read this decision.
Comment by RNUG Wednesday, Mar 11, 15 @ 3:45 pm
I’m in general agreement with RNUG on timing. I just don’t believe remand is a possibility. If they want to do a simple - Belz got it right - decision, I believe we’ll see it fairly quickly. A longer decision release time would result if they want to address the fallacy of the state’s arguments.
Comment by Norseman Wednesday, Mar 11, 15 @ 3:50 pm
Here are a couple of thoughts on the hearing:
- The plantiffs’ attorneys came across as having better arguments and a better presentation, but the court will have to find some way to avoid including the “apocalypse scenario” in their determination to avoid sending this back to the circuit court.
- The state’s argument that the diminishment was necessary because of the Great Recession is laughable. You only need to look at the many examples of fully funded pension funds that were able to recover quickly from the losses to see that failing to fund the pension system was the problem.
Comment by Pelonski Wednesday, Mar 11, 15 @ 3:50 pm
=== RT @moniquegarcia : Sen. @KwameRaoul predicts lawmakers will be back at negotiating table on pensions. ===
I thought I saw Raoul in room. Evidently, he can read tea leaves like the rest of us.
Comment by Norseman Wednesday, Mar 11, 15 @ 3:52 pm
I think one key point made by plaintiffs attorney is that no emergency exists in front of this court to justify emergency authority and that this does not need to go to the lower court to sort that issue out. I think the ISC will rule on the meaning of the pension clause period and explain that funding is no excuse. The court may indicate that it is possible to imagine some situation whereby they would have to entertain the states request for police powers, however this is certainly not one of them.
Comment by facts are stubborn things Wednesday, Mar 11, 15 @ 3:54 pm
Re timing - Justice Thomas emphasized that the state asked for resolution by the end of May. That’s not inconsistent with the usual amount of time to reach a decision where there is not a lot of dissent among the justices. I bet they issue the opinion in that time frame.
Comment by Archiesmom Wednesday, Mar 11, 15 @ 3:55 pm
In the sparring between SUAA wanting time for their attorney instead of just using the designated attorney, DiVito, for the all other parties, SUAA wouldn’t identify what separate or unique issue they had that warranted split of attorney time. It is pretty obvious now that SUAA didn’t want an old, senile ex-judge stammering away and wasting the allotted 20 min of oral time. SUAA just wanted some coherency as provided by Maduff. The state will lose on SB1. Either no police power over pensions ruled by ISC now or remanded to Belz and appealed back to ISC again that emergency argument is BS as circumstances exist in 2015. State claims 2008-09 recession decimated pensions. BS stock market has tripled since then and pension assets are higher now than then. Shapiro did the best job in oral arguments but state dealt themselves a lousy hand and have no chance to welch on pensions. You aren’t legally forced to fund pensions upfront properly, but there is no way the state will be allowed to not pay all benefits in excess of pension fund assets period.
Comment by Mike Green Wednesday, Mar 11, 15 @ 3:55 pm
I felt like the plaintiffs attorney should have, it was in written arguments, nailed down the point that funding was the main issue. That fact is not in dispute however but felt that could have been addressed much more forcibly. Giving the plaintiffs attorney the benefit of the doubt, he may not have felt any more was needed and why go out of your way to combat all assertions and run the risk of opening some door.
Comment by facts are stubborn things Wednesday, Mar 11, 15 @ 3:57 pm
- RNUG -, - Norseman -, et al.,
Thanks for the insight you all bring, especially the two above.
To the Post-Game,
Sen. Raoul can indeed read the leaves too. You don’t say what he said with the court decision still in the wings without some sort of undertanding what may play out.
Comment by Oswego Willy Wednesday, Mar 11, 15 @ 3:57 pm
Thank you, RNUG, and to the other gentlemen, too, who have commented about the timing of the Court issuing its decision. I understand better, thanks to you.
Comment by Christopher Wednesday, Mar 11, 15 @ 4:09 pm
Rauner will do an all out blitz on passing a constitutional ammendment to eliminate the pension clause..That 20 million aint just to bribe the general Assembly.
Comment by foster brooks Wednesday, Mar 11, 15 @ 4:10 pm
===Sen. @KwameRaoul predicts lawmakers will be back at negotiating table on pensions. ===
What negotiating table is Sen. Raoul talking about and what’s there to negotiate?
Comment by forwhatitsworth Wednesday, Mar 11, 15 @ 4:11 pm
=== I think one key point made by plaintiffs attorney is that no emergency exists in front of this court to justify emergency authority and that this does not need to go to the lower court to sort that issue out. ===
With due respect Facts, I was concerned with DeVito’s rambling on the issue. He recovered at the end, but his response should have been a slam dunk. The focus today was and should have solely been on the matter of law as to whether police power can be used to override the pension clause. My legal friends advise me that the AG snuck the “background facts” in their briefs to garner some support to address the crisis. I’m told that the briefs are to be limited to legal issues involved in the decision made by the circuit court. That court didn’t address the financial emergency, thus it was not relevant to the ISC. Even so, the AG’s ploy didn’t seem to move the justices.
Comment by Norseman Wednesday, Mar 11, 15 @ 4:16 pm
forwhatitsworth: === What negotiating table is Sen. Raoul talking about and what’s there to negotiate? ====
Too true! I think the only possible thing the state will be able to negotiate is revisions to the Pension Code on a prospective basis only, possibly phased in over several years to give current workers time to make adjustments. If the Court spanks the General Assembly really hard, they won’t even be able to negotiate that.
Comment by ChiTownSeven Wednesday, Mar 11, 15 @ 4:20 pm
the unions went to the table and got burned. Why would they do that again?
Comment by Anonymous Wednesday, Mar 11, 15 @ 4:22 pm
Mike, I don’t disagree with you on DiVito (my apologies for spelling it wrong up to now), but I would have preferred John T. Shapiro having his 10 minutes. It was presented as if Maduff would discuss unique issues to SUAA. He didn’t. Because of Maduff’s ego, we ended up with a bad compromise where DiVito rambled for 15 minutes and Maduff didn’t even take his full 5 minutes to make the few points in his presentation.
Comment by Norseman Wednesday, Mar 11, 15 @ 4:25 pm
== What negotiating table is Sen. Raoul talking about and what’s there to negotiate? ==
House & Senate committees - figuring what can get passed
What is probably back on the table plus some previous ideas:
Normal cost shift for TRS
‘Tier 3′ aka 401K type plan for new hires
Voluntary / optional 401K type plan for the systems that don’t currently offer it. Devil will be in the details.
Voluntary higher contribution rate in exchange for an early retirement option (rule of 75 but at least 10 - 15 years of higher payments first?) for SERS
Voluntary trade of the 3% AAI for a straight CPI
A lot of other small items I can’t remember at the moment.
Not saying any of these are necessarily good ideas or would even save any money but they would probably be legal.
Comment by RNUG Wednesday, Mar 11, 15 @ 4:25 pm
Norseman - Wednesday, Mar 11, 15 @ 4:16 pm:
Good points. I agree he could have handled it better, but felt the argument was made if only at the end.
Comment by facts are stubborn things Wednesday, Mar 11, 15 @ 4:26 pm
I was wondering also when I read those motions to split time. Wish the split had been 50/50 given DiVito’s performance. Been on both sides of that. Had to file a similar motion in the Illinois Supreme Court once due to egotistical counsel who backed off on hogging the argument once I filed the motion. Another time I agreed to split time only to have the justices look bored and ask the other counsel questions about my case not hers. LOL
Comment by anon Wednesday, Mar 11, 15 @ 4:31 pm
RNUG, Norseman, etc. - thank you for your insight.
Comment by Mama Wednesday, Mar 11, 15 @ 4:36 pm
If we cut taxes further and add more tax breaks and credits for wealthy individuals and companies we can declare a super emergency and not pay back our bonds or other bills. Then we will be really really flush with cash!
Comment by Ghost Wednesday, Mar 11, 15 @ 4:37 pm
Thanks to RNUG, Norseman et al for the running commentary on the hearing. Very interesting thoughts all around, very enjoyable and informative read, seriously many kudos.
I do not believe the police powers/fiscal emergency argument was ever going to be effective. The pension, as it pertains to the percentage of obligations, is actually better funded today than it was in 1970. The ILSC knows this. The numbers, depending on your source, are 41% in 1970 and 46%-48% today.
Tier 2 may or may not serve our long term problems. Think 67 year old kindergarten teacher. I also continue to hear that the ILGA is going to make some changes in the future because Tier 2 members pay in more than they get out. I have not seen the math myself so I do not know if that is actually true.
Comment by JS Mill Wednesday, Mar 11, 15 @ 4:38 pm
anon - Wednesday, Mar 11, 15 @ 4:31 pm, sounds like your an expert on the matter. I based my personal opinion by reading the two different briefs (not the oral argument briefs) filed by the plaintiffs and with respect to DiVito the observation of an attorney I trust. I also hate having one’s dirty underwear brought out in public. Thanks for your observation.
Comment by Norseman Wednesday, Mar 11, 15 @ 4:42 pm
on a side note:
If we are in a fiscal emergency, how can Rauner hire new people for high salaries above current workers… or pay consultants 30k a month. That’s new expense the State didn’t have; and we are in a fiscal crisis?
also if State employees are overpaid…how come Rauner had to pay his new hires more then what the State employee’s make in order to get them to take the jobs? and if these new people can command hirer pay then doesn’t that mean the States pay is spot on or even low compared to the hirer paid private sector counterparts? keep in mind these new Rauner hires at hirer salaries, many do not have State experience so this is the entry level or starter salary…just imagine if they had experience here.
Comment by Ghost Wednesday, Mar 11, 15 @ 4:44 pm
@ RNUG- I am not sure the CPI swap is legal, still a diminishment and one of the hottest hot buttons among retirees. I would support the CPI cap, Compounding CPI is the single largest cost driver for the annual pension cost.
The cost shift is fine IF districts can have the option of a revenue stream just like SSI/IMRF. Then it is up to the local community if they want that or more staffing/activity reductions. The cost shift is also fine to me because it is the only way the payments get made.
May I suggest re-amortizing the debt over a longer period and seek a 70% or 80% funding level and not 100%.
401k actually costs more and funding for the pension is lost, you would eventually end up with a real emergency.
Those are the big ones.
Comment by JS Mill Wednesday, Mar 11, 15 @ 4:50 pm
- Ghost -
The whole “fiscal emergency” argument was a Hail Mary pass on the 99 yard line from day 1 … and everybody knew it.
As one of the other commenters said about the pensions a couple of years ago, a fiscal problem is being addressed with a political solution. Once that gets shot down, the math only allows for a few substansal solutions (more revenue, cost shift, revised ramp); everything else including a new ‘Tier 3′ will just be nibbling around the edges.
Comment by RNUG Wednesday, Mar 11, 15 @ 4:52 pm
- JS Mill -
Note I said ‘voluntary’ …
Comment by RNUG Wednesday, Mar 11, 15 @ 4:53 pm
foster brooks said: Rauner will do an all out blitz on passing a constitutional ammendment to eliminate the pension clause..That 20 million aint just to bribe the general Assembly.
Foster brooks, I wouldn’t be surprised to see a push made to get that on the ballot in 2016. Correct me if I’m wrong but I don’t see how that would help the state out, at least in the short term. I don’t think that removing the pension clause would have any impact on those already retired or probably those current workers under Tier 1.
The constitution forbids any law that would impair the obligation of contracts.
Comment by The Dude Abides Wednesday, Mar 11, 15 @ 5:13 pm
If bill is tossed and pension is upheld, what fool would negotiate any of it away?
Comment by AnonymousOne Wednesday, Mar 11, 15 @ 5:22 pm
Thanks to all for the reports and analysis. Just saw Rep. Nekritz on WCIA saying that she thought the State did “an excellent job” in court and that she “remains confident” that SB 1 is constitutional.
Comment by Arthur Andersen Wednesday, Mar 11, 15 @ 5:23 pm
Just saw Rep. Nekritz on WCIA saying that she thought the State did “an excellent job” in court and that she “remains confident” that SB 1 is constitutional.
Celebrating St. Patty’s Day a little too early?
Comment by Six Degrees of Separation Wednesday, Mar 11, 15 @ 5:26 pm
Her, not you, Arthur! LOL
Comment by Six Degrees of Separation Wednesday, Mar 11, 15 @ 5:29 pm
The Solicitor General did a good job arguing a dog of a case. May her skills be put to better use on other cases. With Rauner around, we might need her.
Comment by anon Wednesday, Mar 11, 15 @ 5:31 pm
Yeah, I wasn’t impressed with Divito’s dissembling, but he did make one good point, that being that the people may limit the police powers of the state, and that they specifically did so by creating the pension clause and its precise wording to do just that.
Comment by PublicServant Wednesday, Mar 11, 15 @ 5:37 pm
@Anonymous One, Agree. I remember when the Union reached a previous agreement with the Senate which Madigan refused to call for a vote in the House. The Union stated that the deal would not be on the table indefinitely. That said, the Union can’t negotiate anyone’s contractual protected benefits anyway. Possibly the Union could negotiate what the state could offer for consideration. Giving up the 3% AAI for CPI might give some pause for thought. This low inflation period we’re in could very well change and not in the too distant future. Remember the inflation of the late 1970’s?
Comment by The Dude Abides Wednesday, Mar 11, 15 @ 5:41 pm
Gino hit a home run today. Whoever said he rambled must not have been in the same courtroom I was in–or maybe has limited experience in courts of law. The Solicitor General was almost completely flummoxed by several questions asked by the Justices. It wasn’t her fault, however–she had no answer because she had the task of defending the indefensible.
Comment by Anon Wednesday, Mar 11, 15 @ 5:41 pm
Interesting argument - the State has never found a good answer to the problem that their construction of the pension reform clause renders 2/3 of the clause meaningless. If the clause was intended to do nothing more than make pension relationships contractual, then there’s no need to include the “diminish or impair” language. Plus, the State has no explanation of how “diminish” and “impair” have separate meanings. The plaintiffs made their points clearly and well - the clause means what it plainly says, and the history of the constitutional debates is clear - the convention wanted to protect benefits from cuts in trying times.
Comment by kirkcjenkins Wednesday, Mar 11, 15 @ 5:42 pm
I recall several people on this board suggesting the “fix was in” following Madigan’s comment that he believed the statute would be upheld. Obviously no decision has been rendered yet, but I hope they are eating crow with the knowledge the the ISC is indeed an independent branch of government.
Comment by The Dark Horse Wednesday, Mar 11, 15 @ 5:46 pm
School hoise rocks needs a constitution lesson
Comment by Ghost Wednesday, Mar 11, 15 @ 5:48 pm
The Dude Abides
even if the unions did agree to a new pension it would be moot in that they would only be agreeing for their memebers. there are many members who aren’t covered by a union, thus the unions cant impose anything on those workers, thus those non unions employees could sue on their own if anything was reduced..with or without an agreement by a union…theres no answer.
Comment by bobby brown Wednesday, Mar 11, 15 @ 5:50 pm
- The Dude Abides - Wednesday, Mar 11, 15 @ 5:13 pm:
I don’t think that removing the pension clause would have any impact on those already retired or probably those current workers under Tier 1.
The constitution forbids any law that would impair the obligation of contracts.
===
Is this out exempt from ‘police powers’? Are those contracts absolute or open to modification?
I was happy with what I heard today.
The plain and simple language argument is easy enough that even I can understand. I loved the point that when the pension clause was added, it was presented to the voters as ‘new language’ that was ’self explanatory’. For all the tap dancing these lawyers are doing, you just can’t get away from the fact that it (the language) was put there for a reason, and this is the reason.
Comment by anon Wednesday, Mar 11, 15 @ 5:53 pm
I’m with anon 5:41. Judge DiVito did a fine job - perhaps relaxed can be mistaken for rambling? Appellate arguments are much more a conversation with the panel than the oratory one tends to see in movies. He made his points. I felt he did a better job than the Solicitor General, who seemed nervous (rightfully so), and at times seemed to be reading her argument from notebooks. But as said, she has a dog of a case to work with.
Comment by Archiesmom Wednesday, Mar 11, 15 @ 5:55 pm
Anon - Wednesday, Mar 11, 15 @ 5:41 pm: I watched it all and couldn’t disagree more.
Gino couldn’t put a complete coherent sentence together. However, the oral statements by anybody other than the ISC don’t matter. The written briefs by both the ISEA and SUAA were both excellent. The written brief from the state is weak and I doubt if the AG actually believes in its statements or the merits of its case and arguments. The ISEA and SUAA written briefs and the ISC justices questions and statements are all you need to know to foresee the ultimate rejection of SB1 and all other pension reforms that attempt to diminish current public employees and current retiree’s benefits.
Comment by Mike Green Wednesday, Mar 11, 15 @ 5:59 pm
First — I want to thank RNUG, and Norseman, and so many others who provided insight on this issue — today, and so many times in the past. Now — a question for RNUG, Norseman, or anybody who thinks they might know the workings of this Supreme Court: (Apologies, in advance, for the length of this) - Countless times in the past year, I have listed to our current legislators claim that they thought this law was “Constitutional” (Cough! Cough! something they had to say, of course, and I understand that, and I understand why.) They would almost always add an additional statement such as this: “If the Court decides otherwise, of course, we believe we will find some guidance from the court in their decision to help us to know how we can resolve this.” My question — is this realistic? Do the members of the General Assembly believe the Supreme Court will feel any need to help guide them? Or, is this the Pollyana hope that the Supremes will give them some sort of hint, and render parts of the law a no-no, but give them some areas of wiggle room for future legislation? I do find it curious that so many of the members of the A.G. almost always would add that second part of the statement… (”We need guidance! We need guidance!”) In fact, I believe even Rauner made a statement to this effect recently. Any thoughts? What if the Supremes simply say “Nope. Next question.”
Comment by Justan Observer Wednesday, Mar 11, 15 @ 6:01 pm
Courts don’t typically give “guidance” or advisory opinions. I’d say the chance of meaningful guidance is very very low.
Comment by The Dark Horse Wednesday, Mar 11, 15 @ 6:04 pm
You think the Tribbies understand now that you can’t argue for both emergency power grab-backs and tax cuts at the same time? You’d think most adults could.
Comment by Wordslinger Wednesday, Mar 11, 15 @ 6:06 pm
Observer - The Supreme Court does not give advisory opinions. They will say what is fatally flawed in SB1, but will not offer suggestions as to what would work.
Comment by Archiesmom Wednesday, Mar 11, 15 @ 6:16 pm
Good god. Someone please — please — yank DiVito from any future arguments like this. Obviously, he’s a smart guy — but his presentation today was awful. Truly awful.
Comment by Macbeth Wednesday, Mar 11, 15 @ 6:19 pm
Gov. 1% and the rest of the oligarchs better call their brokers and start moving their fortunes off shore, if they haven’t already.
Comment by King Wednesday, Mar 11, 15 @ 6:33 pm
And folks wonder why those of us who can elect to relocate to states that don’t have these issues. What illinois will face is growing expenses financed with a shrinking tax base. Good luck and good night.
Comment by Sue Wednesday, Mar 11, 15 @ 6:35 pm
The state has been bluffing its way through this course. Today was the final exam and it failed miserably. It has no constitutional leg to stand on, only an artificial construct which the Court signaled it’s not buying.
Those shameless, cowardly legislators who refused to abide by their oath to uphold the constitution have brought us to this point, and now they will have to figure out a constitutional solution. Of course, they will have the cover of the Court decision on which to lay the blame
Unlike the legislature, it appears the Court will do its job an uphold the constitution.
Three jeers for the Court!
Comment by Anonymous Wednesday, Mar 11, 15 @ 6:36 pm
Macbeth: RE: “Good god. Someone please — please — yank DiVito from any future arguments like this. Obviously, he’s a smart guy..”
I agree. I pride myself in always being able to recognize the importance of good content as opposed to good presentation skills. However, I also know that most others will miss the good content if the presentation skills are so awful as to be distracting, or — (dare I say it) annoying… Thank goodness for the written presentations! I was actually surprised at the weak public speaking skills / persuasive skills I saw on display today — considering the level. Ironically — the only speaker who I thought did a “competent” job (in presentation) was the one who probably should not have even been speaking — since he did not have any “unique issues” to discuss at all… Near the very end.
Comment by Justan Observer Wednesday, Mar 11, 15 @ 6:41 pm
Sue, before you or others leave Illinois, you might want to thank all of its public employees for keeping taxes so low all these years as their promised pension payments were used to pay state bills.
Comment by Diogenes in DuPage Wednesday, Mar 11, 15 @ 6:42 pm
A little disappointed that Maduff did not bring up the fact that by drastically changing the money purchase interest rates in SURS, the bill in question did cut initial benefits for many SURS members retiring after July 1, 2014 - in some cases by 30% or more. This would have underscored that Shapiro flat-out lied when she said that this legislation does not cut anyone’s initial benefit, merely the rate of increase in benefits. I am not a lawyer, but isn’t it unethical (and grounds for disbarment) to make a statement before a court that is clearly and demonstrably false?
Comment by Andy S. Wednesday, Mar 11, 15 @ 6:45 pm
Anon - Wednesday, Mar 11, 15 @ 5:41 pm, I didn’t need to be in the courtroom since it was being streamed. Since you were, I take it you were either involved in selecting/paying DiVito or a colleague. I stand by my opinion as to his oral presentation. The saving grace is the excellent brief filed on behalf of RSEA, ISEAR, IRTA and the We Are One Coalition. I think that will suffice to carry the day.
Comment by Norseman Wednesday, Mar 11, 15 @ 6:45 pm
Sue, while I’m sure you believe, and more importantly, want others to believe that a mass exodus will occur unless the courts allow Illinois to unilaterally renege on it debt obligations for just a single class of debtor, California, for one, proves you wrong. Illinois income tax rate is ridiculously low, not to mention regressive compared to its surrounding states, and our economy is much more diversified and improving more and more daily. If you’d like to leave, you won’t be missed. Don’t let the door hit you on the way out.
Comment by PublicServant Wednesday, Mar 11, 15 @ 6:49 pm
Let’s hope the court rules in favor of the retires and employees. If a CEO didn’t put funds in a pension wouldn’t they be subjected to criminal action? The pension has been shortchanged for so many tears by the politicians. Why aren’t they being punished?
Comment by Anon Wednesday, Mar 11, 15 @ 6:50 pm
I just want to thank the ISC for allowing audio/video live streamed. I do wonder though if the cameras may have been a distraction for those arguing or even the justices themselves.
Comment by Casual Observer Wednesday, Mar 11, 15 @ 6:51 pm
I appreciated DiVito’s conversational approach today as well as what he had to say. He juxtaposed well with the others and there may just have been a method to his madness, wouldn’t you say MacBeth?
Comment by Sinequanon Wednesday, Mar 11, 15 @ 6:54 pm
With so much at stake, I am hopeful that a fair and reasonable judgment is rendered by the Illjnois Supreme Court, one which balances the State’s fiscal obligations to government employees against the exigenct need to shore up the State’s current fiscal crisis. We are talking about real people’s nest eggs, folks. Respect that.
Comment by Black Ivy Wednesday, Mar 11, 15 @ 6:57 pm
The state has already signaled its intent to appeal to the U.S. Supreme Court asserting that state sovereignty and its ability to invoke police powers is absolute and no contract is above it. I believe that if the Belz ruling on SB1 is allowed to stand, that the state will immediately appeal to the Roberts court.
Comment by PublicServant Wednesday, Mar 11, 15 @ 7:01 pm
The Illinois Supreme Court has been videotaping arguments for years and making them available on its website. Only difference today was that it was streamed live, and that the argument was held in the afternoon instead of the morning.
Comment by anon Wednesday, Mar 11, 15 @ 7:03 pm
Dark Horse: “I recall several people on this board suggesting the “fix was in” following Madigan’s comment that he believed the statute would be upheld. Obviously no decision has been rendered yet, but I hope they are eating crow with the knowledge the the ISC is indeed an independent branch of government.”
Actually, I thought a sort of a fix was in, even when the bill was passed, and Madigan made his comment. Just not the fix that some folks were focusing on.
I have personally always suspected that SB1 was a deliberate “straw man” bill, of sorts — constructed as an obviously Unconstitutional bill, knowing it would never pass muster. Pass the bill. We know the bill will be challenged. We even know it will fail, and the Supreme Court will forcibly swat it down.. Once it fails, then we can face our voters with drastic changes 1) Tax increases, without fear of the usual backlash, or voter outrage… 2) Maybe even the possibility of Constitutional reform, (Progressive Income Tax, anyone)? Of course, all of this also occurred before that guy who drops the “g”s started driving his prop van around the state… and now his presence is going to make this whole thing a more entertaining dumb-show, for sure… Just my own opinions, here. So, was the fix in? Madigan knew full well that the bill was doomed, even as he as he allowed it to be unleashed. Even as he publicly stated “I believe it will pass Constitutional muster.” But, it politically may be the only means of protecting all of those others hanging out in the Gen. Assembly — once it was shot down by the courts.
- Do not forget, We Are One was in long-time negotiations with top legislators which could have fixed this pension problem, and it included a greater contribution by pensioners combined with a much milder reduction to benefits of pensioners (diminishment / impairment, but much more voluntary… since it was negotiated by the unions themselves…) and then those negotiations suddenly stopped / halted… And SB1 appeared out of nowhere.
Comment by Justan Observer Wednesday, Mar 11, 15 @ 7:06 pm
Black Ivy, if the state’s fiscal condition is in crisis, why would it allow the income tax rate to decrease, and why would you think that the only alternative the state has would be to invoke police powers and unilaterally invalidate a contract, as it’s only option?
Comment by PublicServant Wednesday, Mar 11, 15 @ 7:07 pm
Sue, don’t let the border gate hit you on the head as you leave.
Comment by Norseman Wednesday, Mar 11, 15 @ 7:13 pm
Norseman–good guess. I am an attorney with many years of courtroom experience, and I guess you could call me colleague of Gino although I barely know the man. I was in the courtroom today to watch perhaps the most important Supreme Court case in a generation, although I was there as a matter of professional interest and am neither paying him nor being paid by him or anybody else to be there. During the argument, I saw Gino’s back and I heard his words. I didn’t see his face, as presumably you did if you were watching on TV. However, I saw the Justices’s body language and heard their verbal reactions to Gino and the Solicitor General, and my overall impression is that he hit a homer–not a grand slam, perhaps, but good for 2 or 3 runs. Gino’s arguments were perfectly honed, direct and pointed. If you thought him “rambling”, it’s just because he had a lot of ground to cover and a lot of BS on which to stomp. His presentation was totally appropriate for a former judge, with many years on both the trial court and appellate court benches. He’s not some young buck trying to make a name for himself with histrionics; he’s an old dog who has seen it all and heard it all, and had no need for that–”just the facts, ma’am!” Does what happened today at oral argument mean the plaintiffs win the case? Not all–these cases are won or lost mainly on the briefs; you can never tell from oral argument how the justices will rule. But what you saw today was a master of his craft in action–a performance for connoisseurs. I respectfully suggest you watch the video a second and even a third time, and you may begin to understand.
P.S. If you want to see a young buck who was trying to make a name for himself but only manage to appear ridiculous, watch Maduff’s pathetic performance a second time.
Comment by Anon Wednesday, Mar 11, 15 @ 7:20 pm
Sue,
if you’re thinking of moving to Kentucky, Indiana, Wisconsin, Missouri or Iowa, check out the list below. for Indiana add another 3% for county income taxes in the good places over there, you know the northwest counties near a certain down the toilet metro area that was ranked #1 metro just last week for corporate expansions.
Illinois is currently at 3.75%, the other states high ends vary from 6-9%. please think before you post next time. and please think even harder if you’re thinking of responding with Texas or Florida, or even Alaska.
even Mississippi, Alabama, Louisiana and Arkansas have 5-6.9% high end rates and they’re poor states by most rankings.
http://www.taxadmin.org/fta/rate/ind_inc.pdf
Comment by PoolGuy Wednesday, Mar 11, 15 @ 7:40 pm
PublicServant, have you seen something that hints at an appeal to the feds or are you just surmising due to their reserved powers argument?
If it’s the latter, I felt the State’s reserved powers argument was woefully inept and wouldn’t be cause for an appeal.
Comment by Norseman Wednesday, Mar 11, 15 @ 7:46 pm
I understand that this is a discussion about law and legal interpretations. My compliments to the many skilled legal experts commenting on this case. However, I see this whole issue as one of failed leadership on the part of elected politicians. Illinois deserves better.
Comment by drj Wednesday, Mar 11, 15 @ 7:46 pm
and i realize my previous post had nothing to do with pensions. but if we had a more progressive tax system, like so many other states, and if we had made our pension payments in the past as opposed to skipping them to artificially keep tax rates so low at 3% for the last 40+ years, we would probably not even be posting comments here in the first place.
Comment by PoolGuy Wednesday, Mar 11, 15 @ 7:46 pm
In layman terms:
Legislators and Gov 1% are like a a group of mechanics who take sledge hammers to the engine of your car and then later tells you that you are going to need a mechanic to fix your car. This “emergency” is manufactured by the greedy few who rose to the top pick pocketing the retirements of honest working families of Ilinois.
Comment by King Wednesday, Mar 11, 15 @ 7:49 pm
== I believe that if the Belz ruling on SB1 is allowed to stand, that the state will immediately appeal to the Roberts court. ==
You did see how fast the 7th kicked the Chicago pension case?
Comment by RNUG Wednesday, Mar 11, 15 @ 7:58 pm
== We Are One was in long-time negotiations with top legislators which could have fixed this pension problem ==
And it was just as unconstitutional because the unions had no power to negotiate for anyone, including their members, on the pensions
Comment by RNUG Wednesday, Mar 11, 15 @ 7:59 pm
People, PLEASE stop talking about a SCOTUS appeal. The ISC has the final say on a matter of state constitutional law. If SB1 goes down based on the pension clause, that is it. There can be no further appeal.
Comment by The Dark Horse Wednesday, Mar 11, 15 @ 8:11 pm
Having done several appellate arguments - including one before then Justice DiVito - arguing before an appellate/Supreme Court is not like arguing to a jury. The jurors are 12 citizens pulled in off the street who have no idea what the case is about until they hear the evidence, the arguments and get the jury instructions. A compelling argument can sway the jury. On the appellate level the justices already know what the case is about because they have read the briefs. Any appellate lawyer who plans on using all their time with their prepared argument and is not prepared to respond the questions from the justices is not doing their job right. The questions are sometimes used to clear up issues from the briefs or sometimes to telegraph their punches. Justice Thomas seemed to be in a telegraphing mood today.
Comment by West Side the Best Side Wednesday, Mar 11, 15 @ 8:19 pm
Assuming the IL SC rules the pension clause language is clear and unambiguous, for those wondering about any guidance, the most I expect we will see are words to the effect that the General Assembly has the tools and resources to solve this problem of their own making but must overcome their reluctance to do so … and maybe a rebuking to the General Assembly that they should have heeded the 1970 Con-Con delegates’ hopes and intentions of forcing proper funding by including the Pension Clause in the revised Constitution.
Comment by RNUG Wednesday, Mar 11, 15 @ 8:22 pm
RNUG - Thanks. I had forgotten this (all-important) detail. And, I do believe that fact was discussed here. So, essentially — “We Are One” and all of those months of negotiations and efforts to keep this from happening — had no genuine power, no possible chance of success - legally. If even one state worker (that prison barber down in Pontiac, IL - grin) decided he did not like the fact that his pension was lower than it could have been, he or she files suit, and the whole thing would have tumbled — just like this house of cards… - Thanks for helping me see this more clearly. My guess — that someone in the room (some attorney?) pointed this out, and that is when the negotiations finally ceased, and SB1 suddenly appeared… (You do not need to agree, I am only supposing, here.)
Comment by Justan Observer Wednesday, Mar 11, 15 @ 8:23 pm
===You did see how fast the 7th kicked the Chicago pension case?===
RNUG, again, I hope you’re right. I’m just saying that I believe the state was intimating/threatening in their orals that if the ISC found that a contract was found to be above the ability of the state to invoke its emergency powers, whether legitimate, or not, that there would be cause for a federal appeal. Whether that would get immediately tossed hopefully would occur, but I did get that impression. I’ll try to find Shapiro’s words in her oral.
Comment by PublicServant Wednesday, Mar 11, 15 @ 8:35 pm
I thought the question ratio was quite telling.
Comment by Anonymous Wednesday, Mar 11, 15 @ 8:36 pm
== SB1 suddenly appeared ==
Well, I wasn’t in the room(s), but we have to remember there were multiple versions of SB-1 that (from memory) started with Sen Cullerton’s version, was morphed to include Rep Madigan’s version as choice A with Cullerton’s as choice B, and finally ended up as Madigan’s draft that got enacted. It was probably as much about which version each leader thought they could line up the votes for as anything else.
Comment by RNUG Wednesday, Mar 11, 15 @ 8:37 pm
It’s about at 19:25 that Shapiro says that “plaintiff’s brief raises serious federal constitutional concerns” in the blueroomsteam video. That, anyway, is where I got the feeling that the state thought it had grounds for a federal appeal. I’m gratified that you guys think that she was just blowing smoke.
Comment by PublicServant Wednesday, Mar 11, 15 @ 8:50 pm
- PublicServant -
I got the impression that Shapiro was reaching to find anything, absolutely anything, that she could try to hang her hat on. As I commented (not here) to someone earlier, I almost felt sorry for her having to try to defend the State’s side. It’s hard to be your best when all you don’t have much to work with … and she made the most she could of what she had.
Comment by RNUG Wednesday, Mar 11, 15 @ 8:58 pm
“Gino hit a home run today”. That is good. Just don’t say “scored a touchdown” or “kicked a field goal”, if you get my drift…
Comment by Mike Ferrous Wednesday, Mar 11, 15 @ 9:07 pm
If SB1 goes down based on the pension clause, that is it. There can be no further appeal.
Oh, they could file it, all right. I was involved in an IL constitutional law case where the ISC justices skunked the plaintiffs 7-0, and they appealed anyway to the SCOTUS. The SCOTUS declined to hear the case without comment.
Comment by Six Degrees of Separation Wednesday, Mar 11, 15 @ 9:56 pm
Following is a link to an excellent review of today’s arguments by Kirk Jenkins:
http://www.appellatestrategist.com/2015/03/articles/jurisdictions/illinois/illinois-supreme-court-likely-poised-to-strike-down-pension-reform-act/
P.S. My apologies to him for my misconstruing his comment in this post. From his review he clearly understands the State’s faulty assertion.
Comment by Norseman Wednesday, Mar 11, 15 @ 10:37 pm
31:30 into the video, Shapiro says: nobody’s pensions are going to be cut in absolute dollars, it only reduces the rate of increases. As I pointed out earlier, this statement is unequivocally false with regard to SURS. Anyone in SURS retiring under the money purchase formula, who was not eligible to retire on June 30, 2014, would receive 20%, 30% or even more less in initial pension due to an increase in the money purchase divisor factors that is mandated by SB1. But don’t take my word for it. Ask SURS and they will confirm this.
I understand that there are differences of opinion on how to interpret the contracts clause, how to interpret the pension protection clause in the context of the Constitution, etc. Fine. But making a statement before the ISC that is factually wrong is not OK. And for Maduff, the attorney for the State Universities Annuitants Association, to not point this out to the Justices is also not OK.
Comment by Andy S. Wednesday, Mar 11, 15 @ 11:43 pm
By the way, Shapiro’s argument that the recession of 2008-9 caused the underfunding crisis is also laughable. The markets have recovered quite nicely since then. Anyway, according to the investments section of its latest annual report, over the ten year period spannng June 2004 - June 2014 (which includes the latest recession) SURS earned a compound annual return of 7.8% per year, which exceeds its assumed (until recently) 7.75% annual return. The assumed return going forward was reduced to 7.25% annually last summer. If the system’s annual returns historically have exceeded assumed returns, how can low returns/losses be the cause of a fiscal emergency? As a financial guy I may not be an expert on contract law, but I’ll say one thing for me: I appear to know the law better than the lawyers know finance!
Comment by Andy S. Thursday, Mar 12, 15 @ 12:12 am
@Andy S, 12:12: It bothered me that neither of the Plaintiff’s lawyers pointed out this fact, which, as you say, directly contradicts a repeated assertion that the State’s lawyer made. Why not?
Comment by UIC Guy Thursday, Mar 12, 15 @ 2:45 am
Leave it to the Tribune editorial board to focus on one of the two questions asked of the plaintiffs’ lawyers, and to conclude that the state “has the better argument.”
Comment by The Dark Horse Thursday, Mar 12, 15 @ 6:18 am
==Why aren’t legislators being punished as corporations would be legally responsible for shorting retirement contributions==
I say all of the money in the legislators’ pension fund be liquidated and distributed amongst the other funds. Then they can see how it feels.
Comment by AnonymousOne Thursday, Mar 12, 15 @ 7:27 am
The Tribbie edit is an embarrassment of hysterics and stupid.
Apparently, if the Supremes rule for the plaintiffs, we’ll all be like Okies loading up the truck and heading for Californy.
Because, as we all know, everyone who goes to work or operates a business every day worries and obsesses about state pensions. They’re the prime determinant in how you can make a buck.
Comment by Wordslinger Thursday, Mar 12, 15 @ 7:39 am
as someone who has sat on a judicial appellate panel, albeit at a lower level, I can tell you that my experience was that 99% of the decisions we made were based on the written briefs and review of the transcripts and decisions rendered by the lower judicial body that was being reviewed. Oral argument generally was reserved for asking questions of the attorneys about things that we either didn’t understand because they weren’t made clear in the briefs, questioning an attorney because his arguments were so out in left field that we wanted to make sure that we were correctly interpreting what he had put in his brief, and/or showing the public that someone had an ideological stance…Divito’s performance should have little impact on the outcome given the other material available to the justices
Comment by erik Thursday, Mar 12, 15 @ 8:01 am
just a quick reminder … there is *nothing* inherent in a 401-k style retirement plan that requires employer matching dollars. Some employers match something and some match nothing.
The State of Illinois already offers a 457 deferred compensation retirement plan for employees to save for their own retirement. There is no match of any kind from the employer (State of IL).
Comment by Late to the Party Thursday, Mar 12, 15 @ 8:08 am
RNUG:
I think you left an ingredient out of your solution:
Change the funding target.
100% funding is a posture. Actuaries suggest 90% funding.
I think the rating agencies would be thrilled with a plan that gets us to 80%. It is certainly better than a 100% plan that is unconstitutional.
Comment by Yellow Dog Democrat Thursday, Mar 12, 15 @ 8:42 am
== Change the funding target. ==
I’d have to go back and check the 1995 ramp (which is the current law since SB-1 was stayed), but I think it specifies 90% as the funding target.
Comment by RNUG Thursday, Mar 12, 15 @ 8:44 am
Agreed the case will be (and probably was already) decided on the briefs. But when an attorney apparently insisted on the entire oral argument in a case with multiple parties and forced the filing of motions to split argument, that attorney had better bring his or her best game to the court. DiVito was at best underwhelming as an oral advocate.
Comment by Cold Thursday, Mar 12, 15 @ 8:54 am
“100% funding is a posture” As I understand, that’s a big ball and chain that the USPS has to fight with, their pension is mandated to be 100% funded.
Comment by Skeptic Thursday, Mar 12, 15 @ 9:07 am
Carrying an unfunded liability as a permanent target (say 90%) has a cost to the taxpayers. The annual interest on an unfunded liability has to be paid eventually. The latest CoGFA report projects the unfunded liability to be $35 billion in 2045 after reaching the 90% funded target. At an assumed rate of return of 7.25% for the pension systems that cost is $2.5 billion in 2045 or $1.1 billion in today’s dollars (assume 2.75% inflation) to put things in perspective. The pension systems make 4% - 5% above inflation on their investments and if they are underfunded the taxpayers have to make up the difference. Long term, anything short of 100% funding is a cost to the state.
Comment by Did the Math Thursday, Mar 12, 15 @ 9:22 am
The state made an interesting argument that the words diminish and impair did not speak to pensions but rather to the contractual relationship. Very problematic for the state and invites the ISC to really make it clear that diminish and impair speaks directly to the pensions and not to the general nature of the establishment of a contract. The state really had to do some gymnastics on that one. The court will have nothing to do with the states weak argument that police powers must be used because of the crisis the state is in. The state is trying to turn this into a case about whether there ever could be a reason EVER that would allow the state to reduce pensions. The court will have none of this and will deal with the case in front of them. Those apocalyptic hypothetical events will have to arrive and then the court will entertain an appropriate solution.
Comment by facts are stubborn things Thursday, Mar 12, 15 @ 9:43 am
RNUG
Yes, so correct. The state’s argument is such folly. They would have us believe that they should be given authority to override a constitutional provision before using all of the tools at their discretion. You and others have cataloged them well. A simple continuation of tier 2 along with a re-amortization of the debt with a 80% funding target along with moving the income tax back to 5% would do just fine. Does not sound like a world wide plague of locus or an attack from outer space to me. The only issue I am not sure of is whether the court will mention that the state has all the tools necessary and the court does not see an “end times” event or if they will ignore the whole issue and simply uphold the lower court ruling indicating that the pension clause means what it says. Not sure which is more powerful? I almost think the latter?
Comment by facts are stubborn things Thursday, Mar 12, 15 @ 10:07 am