* From the Tribune editorial board…

Emanuel raised, and Quinn discussed, the best idea of the night: that Illinois consider pension changes that the similarly Democratic state of Rhode Island adopted in November.

Briefly: Politicians in that state — like Illinois, its pension obligations are among the nation’s worst-funded — risked their political futures to stabilize a sinking system. They raised retirement ages to Social Security thresholds, tied cost-of-living adjustments to investment returns and the funding level of the pension system, and replaced some guaranteed pension benefits with a 401(k)-style plan. […]

To achieve anything, they will have to be crusaders as forthright and resolute as Rhode Island’s Democratic treasurer, Gina Raimondo. Sit down with her — we had the opportunity a few weeks back — and she’ll soon offer the no-blame, no-histrionics mantra she voiced in hundreds of often hostile public meetings across her state: “This is about math, not politics.” She based her campaign, “Engage Rhode Island,” on educating citizens, and only then negotiating a legislative fix. Her foundational document, “Truth in Numbers,” runs a mere 16 pages, unemotionally laying out the disaster facing retirees and taxpayers.

Raimondo’s success makes her a rock star in, of all things, public finance.

Treasurer Raimondo may be a rock star in the realm of public finance, but she’s a failure in the courts.

What the Tribune didn’t tell its readers is that a Rhode Island judge tossed out a motion by Raimondo and Gov. Lincoln Chafee for summary judgement against a lawsuit filed against the pension reforms. Basically, the judge ruled that the pension cuts violated the state’s constitutional mandates on contracts. Rhode Island doesn’t even have the strict language contained in Illinois’ Constitution about not diminishing pension benefits, but it does have standard contract language contained in most state constitutions.

Back in September, Rhode Island’s top dogs were confident that the state’s supreme court would overturn the decision…

“We’re going to go ask the Supreme Court to review the matter, and we’re going to ask the Supreme Court to do so expeditiously – as promptly as possible,” Tarantino told WPRI.com. Still, he said it’s “unlikely” the justices will rule before lawmakers meet to craft a pension overhaul next month.

The state will also ask both Taft-Carter and the Supreme Court to put the lower-court case on hold until it issues a judgment on today’s contract-rights ruling.

“I’m disappointed,” Tarantino said, but “I believe that the state’s legal position is the correct position, and ultimately I believe the state’s legal position will be affirmed by the [Supreme] Court.”

But that prediction turned out to be dead wrong…

Rhode Island’s Supreme Court is declining to hear an appeal from state officials who sought to reverse a lower-court ruling that public pensions amount to a contract and cannot be arbitrarily changed.

The court announced [November 21st] that it won’t intervene in the lawsuit filed by public-sector unions against the state. The lawsuit now returns to a lower court.

* And now the unions are calling for talks instead of confrontation…

From Smith Hill to Providence and Pawtucket, government lawyers have been batting zero in their efforts to convince Rhode Island judges to uphold changes to public-sector workers’ retirement benefits.

That’s why the four state leaders who pushed through the new pension law should start formal negotiations with union leaders on an alternative overhaul of the system before they lose in court, according to Bob Walsh of the National Education Association Rhode Island.

“The legislative victory that the folks who supported changes in the pension system achieved is going to be short-lived – because it was illegal,” Walsh told WPRI.com on Tuesday. He suggested state leaders should appoint a neutral mediator such as former R.I. Supreme Court Chief Justice Frank Williams to start talks between the two sides. […]

“The realists among labor leadership understand changes have to occur [in the pension system],” Walsh said. “I don’t necessarily believe that our successful efforts in court will lead to a judge saying, ‘Put everything back the way it was.’”

The lesson here is that you can pass all the bills you want and go on an international public relations jaunt touting your own brilliance, but it means absolutely nothing if the courts decide your achievements are unconstitutional. The Tribune ought to at least acknowledge that.

* Meanwhile, the governor’s pension working group is supposed to announce its recommendations by April 17th. The group has refused to invite labor union leaders to any of its meetings for about three weeks, but the unions were whistled in today. I’ll probably have more for subscribers tomorrow.

* In other news, the Tribune editorial board recently screamed about unfunded employee health insurance liabilities…

state government alone faces an unfunded liability of more than $54 billion in retiree health liabilities over the next 30 years.

Illinois lawmakers haven’t yet seen that startling number, but they do know they have to confront a retiree health debacle. Last year Illinois Senate legislation to begin addressing that debacle didn’t make it to a floor vote. Gov. Pat Quinn’s pointed words on the subject in his February budget address both encourage us and make us hope he sticks to his word that something has to happen.

Opinions differ on whether lawmakers can reduce current employees’ pension benefits going forward. (Our view is that lawmakers definitely can do that, and we hope Illinois courts agree if and when legislators pass pension reforms.) But there’s no dispute on this: While pensions have some state constitutional protection, retiree health benefits do not.

The IPI says that only 8 percent of private-sector retirees are offered health insurance benefits, and those retirees pay an average of 54 percent of the cost. Similarly requiring Illinois retirees to pay an average of 54 percent of insurance costs would save Illinois $500 million a year. Over the next 30 years, that change by itself would shrink the anticipated $54 billion shortfall by $21 billion. IPI suggests leaving benefits essentially intact for retired state and university employees with household incomes below $70,000 a year. Those with incomes between $70,000 and $200,000 a year would receive monthly subsidies of $302 and pay $369 themselves. And “retired union heads or university executives collecting pensions nearing $200,000 would be required to cover their own health insurance costs.”

The Illinois Policy Institute’s plan is similar to those proposed by top legislative Democrats, including state Sen. Jeff Schoenberg. There’s a very real possibility that something like this will pass. It would be helpful to see a bit of context here.