I told my newsletter subscribers several weeks ago that, without a doubt, if Senate President John Cullerton caved in to House Speaker Michael Madigan on pension reform, Cullerton’s legacy as Madigan’s junior partner would be forever sealed.
The two men have battled for months over the proper way to proceed. Cullerton has said that the state Constitution requires that public workers and retirees be given a set of options before their pension benefits can be reduced. Madigan has said that idea doesn’t save enough money and he has looked for the most cost savings possible. With the pension system at $100 billion in unfunded liability and taxpayer costs rising by about a billion dollars a year, this has become the most important state fiscal issue of our time. It has to be resolved.
I ran into Madigan not long after I wrote that stuff about Cullerton’s possible cave.
“Rich, you’re not helping,” he said to me.
I told him that I wasn’t here to help. It’s not that I’m here to screw things up, either, I explained, but I just felt I had to call things as I saw them. Besides, I said, it was true. Cullerton has so forcefully argued in favor of his own, more likely constitutional pension reform plan that I didn’t see how he could walk himself back and still save face. And neither did anyone else I knew.
Several days later, after Madigan killed Cullerton’s concealed carry bill by plucking off two Senate votes, I ran into Madigan at a Springfield restaurant. I told him that Cullerton was in the building with some of his members. Maybe, I teased Madigan, he could go tell the Senate President how he was gonna kill another one of Cullerton’s bills.
“Rich, you’re not helping,” was Madigan’s reply.
Last week, a higher up in the governor’s office reached out to me and asked me if I would please, pretty please with sugar on top not rile up Cullerton on pension reform again before the spring session’s final adjournment. They wanted cooler heads to prevail. They needed Cullerton to calm down and find a way out of this impasse.
But, then after the Senate killed Madigan’s pension reform bill on a vote of 16-42 (seven fewer “Yes” votes than a similar bill had received earlier in the month), Madigan told the Chicago Sun-Times that the roll call showed “a lack of leadership” in the Senate.
So, who’s “not helping” now? How the heck did an attack like that move the ball forward? How did that keep things calm?
Pressure built on Cullerton to just adjourn his chamber and announce that the Senate had completed its job by sending the House a union-backed pension reform bill. Madigan has played that game before with the budget, so some demanded that Cullerton give Madigan a taste of his own medicine on pension reform.
Nobody ever figured that Cullerton would actually do that, however. The Senate President has tried mightily to avoid the often disastrous House vs. Senate feuds that plagued his predecessor Emil Jones, and at times so undermined Jones that he couldn’t function.
Cullerton remained mostly on the high road, but nothing got done. He dismissed Madigan’s direct and seemingly personal attack, saying he just figured that Madigan was “disappointed” in the Senate’s roll call. He adjourned his chamber on the last night of session without demanding that Madigan pass the Senate’s pension reform bill.
Cullerton had been planning to pass at least one of three pension reform bills that the House sent the Senate back in March. Two, a cap on pensionable income at the Social Security cap and a House bill to cut annual pension cost of living increases, were both under consideration.
The idea, apparently, was to get something to the Illinois Supreme Court to see if any pension benefit changes could get final approval.
But Rep. Elaine Nekritz, Madigan’s point-person on pension reform and the sponsor of those two pension bills, told me that the bills on their own would be clearly unconstitutional and that she would urge the Illinois courts to reject them if either were signed into law. The individual pension reforms had to be included in a larger package, she said, to make the case that state “police powers” had to be used to solve the funding crisis.
Cullerton dropped the whole idea after I told my subscribers what Nekritz said.
I guess maybe I didn’t help. But that ain’t my job.
- Frenchie Mendoza - Tuesday, Jun 4, 13 @ 10:54 am:
The more interesting question — and it’s something we’ve heard here often so that it’s lost some of its impact — is why “police powers” are even being considered?
We didn’t elect these folks to implement “police powers” — on anything. That’s not (as far as I’m concerned) how demoncracy works. That “police powers” are even being contemplated is (to me, at least) astonishing.
Moreover, what court — state, federal — would even consider a “police powers” argument? A ruling for extraordinary powers like that would haunt Illinois for years, if not decades and decades.
This is the real argument — the utter lunacy of contemplating these powers and then seriously — without the slightest irony — building (to Madigan, I imagine) a cogent rationale for their implementation in order to traduce the constitution. That’s crazy. It’s so crazy that it’s only now beginning to sink in: that’s the thing this session. That’s what it came down to.
- PublicServant - Tuesday, Jun 4, 13 @ 11:07 am:
Even if it were a crisis (it isn’t), it’s manufactured. The elected representatives of this state chose for 6+ decades to short pensions in order to pay bills. The problem is a 60+ year structural deficit. Won’t we still have that problem if we attempt to reform pensions? I mean, where will they get the money from to continue to fund the structural deficit? Won’t they still need to either increase tax revenues and/or decrease spending?
- RNUG - Tuesday, Jun 4, 13 @ 11:10 am:
Statesmen can take criticism and either ignore it or work with the advice. Politicians can’t …
- Wensicia - Tuesday, Jun 4, 13 @ 11:10 am:
Tomorrow’s Tribune editorial headline:
“It’s Rich Miller’s fault we don’t have pension reform.”
- Middle ground - Tuesday, Jun 4, 13 @ 11:13 am:
How about this for a possible settlement to the impasse: Use SB 2404 as the platform — a big concession to Cullerton. Then, in a series of smaller concessions to Madigan add a few provisions from SB 1, like the graduated increase in retirement age and the Social Security cap. (But make both those elements severable in case they are deemed unconstitutional.) Then add a TRS and SURS cost shift, but only for new hires, which will make the shift so gradual no one will notice. Change the funding goal of SB 2404 from 90 percent in 30 years to 100 percent in 35 years. Finally, adopt Ralph Martire’s reamortization plan, which might make the unions happy.
See, wasn’t that easy?
- Out Here In The Middle - Tuesday, Jun 4, 13 @ 11:20 am:
I have no legal, judicial, or constitutional expertise to offer. Regardless, I offer my opinion that the State Constitution isn’t worth the ‘parchment’ it’s printed on if provisions of the constitution can be suspended solely to correct the repeated, deliberate decisions by elected officials to under-contribute to the pension funds.
- PublicServant - Tuesday, Jun 4, 13 @ 11:26 am:
@Out Here: Absolutely agree, but you really don’t need to be a legal expert to see whether a given bill, or bills complies with the Illinois Constitution where the plain, simple language of the pension clause is concerned.
- Fiercely Independent - Tuesday, Jun 4, 13 @ 11:26 am:
“Rich, you’re not helping,”
“Look, a kitty” is out. We now have a new tag line…
- Lil Squeezy - Tuesday, Jun 4, 13 @ 11:33 am:
Police powers should apply to pension reform in situations where legislators have already maximized other constitutional options available to them. If the State had maximized its constitutional authority to raise revenue or make cuts police powers should apply. However, police powers should not apply if legislators do not feel like doing their job.
- Really? - Tuesday, Jun 4, 13 @ 11:36 am:
So in other words, Nekritz is saying that HB1165 (cap on COLAs) is unconstitutional because it doesn’t reduce benefits enough…
- Police powers to avoid political choices - Tuesday, Jun 4, 13 @ 11:44 am:
Police power!!!?? Here is the problem… The politicians got us into this mess… now they need to make the tough governing decisions to correct what they did. Cut revenue…. Raise Tax’s, then they lose the next election. That’s how it’s suppose to work in a democracy. Police powers my A##!
- east central - Tuesday, Jun 4, 13 @ 11:48 am:
Great column and excellent work throughout the session, Rich.
The House Democratic leadership’s approach is mystifying. The delta between SB2404 and SB1 is insufficient to be a determining factor on whether the income tax increase needs to be extended, unless SB1 becomes a precedent for further unilateral pension reductions which seems a bit farfetched.
So why?
Is this personal between MJM and the unions in We Are One? Personal otherwise? Has the leadership decided that its future is enhanced by cozying up to Chicago corporations and distancing itself from unions?
It is hard to see why blocking SB2404 is in the best interest of the Democratic Party given the potential damage to its base, including the large number of pension system members and persons close to them who are likely to hold a permanent grudge as has been discussed in this blog over the past few days.
- biased observer - Tuesday, Jun 4, 13 @ 11:55 am:
I think MJM is blocking SB2404 because it isn’t a very good bill to solve the fiscal problem. Pretty simple.
- Robert the Bruce - Tuesday, Jun 4, 13 @ 11:59 am:
Love the column, especially the last line, Rich!
I picture Quinn, Madigan, and Cullerton, each standing at the top of their respective palaces, and nobody coming down to talk with each other to reach compromise. It is fine for Madigan and Cullerton to genuinely disagree on the right approach, but I’d love to hear more about how much time they spent together trying to reach a compromise that both could support.
- Police powers to avoid political choices - Tuesday, Jun 4, 13 @ 12:02 pm:
-b o -
Then let MJM raise taxes…. If he can’t do that, then cut spending.
- Old and In The Way - Tuesday, Jun 4, 13 @ 12:05 pm:
- biased observer - Tuesday, Jun 4, 13 @ 11:55 am:
I think MJM is blocking SB2404 because it isn’t a very good bill to solve the fiscal problem. Pretty simple.
And neither is SB 1.They merely cover the symptom. The cause is inefficient tax policy and insufficient revenue. How will they cover the structural deficit once they have gutted the pension funds?
- Anon. - Tuesday, Jun 4, 13 @ 12:11 pm:
==We didn’t elect these folks to implement “police powers” — on anything. That’s not (as far as I’m concerned) how demoncracy works. That “police powers” are even being contemplated is (to me, at least) astonishing.==
“Police powers” is just legalese for the authority of the state to pass laws to provide for the general welfare of its people. The term is used in federal contracts clause cases where the argument is that the contracts clause sometimes has to give way to the state’s authority to act for the general welfare, even when the state exercises that authority to deliberately interfere with contract rights. The classic example is Home Building & Loan Ass’n v. Blaisdell, where the Supreme Court upheld a state law declaring a moratorium on mortgage foreclosures during the depression.
- Formerly Known As... - Tuesday, Jun 4, 13 @ 12:13 pm:
=== How the heck did an attack like that move the ball forward? ===
It clearly did not, especially coming in the latter stages of session.
I am beginning to wonder about the legend of the Speaker’s calm, cool and calculated demeanor.
Perhaps it is not so calm, cool or calculated at all times.
People can get under his skin. He can lose control of his thoughts or emotions in front of the media. He can act selfishishly (not calling Cullerton’s bill) rather than doing what may well be best for the state.
The man really is human after all.
- hisgirlfriday - Tuesday, Jun 4, 13 @ 12:21 pm:
If the court finds these police powers to exist, how soon before we get an emergency manager law like michigans where poor communities get a governor appointed czar to rule over them and local govt. taken away?
- WhoKnew - Tuesday, Jun 4, 13 @ 12:21 pm:
So, which way are you leaning Rich?
The Fourth Branch or the Third Rail.
- Old and In The Way - Tuesday, Jun 4, 13 @ 12:30 pm:
Anon.
The classic example is Home Building & Loan Ass’n v. Blaisdell, where the Supreme Court upheld a state law declaring a moratorium on mortgage foreclosures during the depression.
The fact that it took a worldwide depression and national emergency to elicit a “moratorium” on foreclosures gives you some idea of the legal threshold they are trying to surmount with this lame argument. To top it off the GA increased expenditures by $2 billion over last year. Pretty weak argument by comparison. Just read the preamble to SB 1, it’s laughable it’s so weak.
- Police powers to avoid political choices - Tuesday, Jun 4, 13 @ 12:30 pm:
-Anon-
Very weak argument to compare revenue problems….spending problems … caused by poor decisions of the past. That could easily be corrected by the political decisions of the government by exercising their constitutional protected powers of budget and taxing. Your example is not even close.
- Old and In The Way - Tuesday, Jun 4, 13 @ 12:33 pm:
We have no problem voiding the state constitution when it comes to stealing the pension funds but has anyone suggested that we find a way to circumvent the constitution with regard to a graduated income tax? If they have I haven’t heard of it. Lets put Nekritz and Biss in charge of that one!
- PublicServant - Tuesday, Jun 4, 13 @ 12:44 pm:
Actually, Old and In the Way, it was suggested by commenter Michele Flaherty (hope I spelled that right) on Friday, but I’m glad you mentioned it again. It deserves repeating. Or, as RNUG suggested, raise the income tax rate to 15-25% and exempt the first $100,000. Tax cut for the vast majority of citizens of this state, but it would be a campaign finance killer…
- Union Man - Tuesday, Jun 4, 13 @ 12:46 pm:
The State of Illinois does not have a pension problem!! It has a revenue problem!! Do you think for one minute that even if SB1 passed and was found constitutional that the general assembly would reign in overspending? Really, everyone knew the “temporary” income tax hike was here to stay!! SB1 had no provision to guarantee the general assembly would make payments except to say if they didn’t comply, the could be taken to court. The states has been using the pension systems as an open bank account. And more casinos? They wanted to sell licenses for $100k each!! Michigan and Nevada charge hundred’s of millon dollars? Look at the revenue we would be giving away for political favors. We need a graduated tax!! We give tax breaks to corporations that don’t need them!! CME for one!
Revenue problem not pension issue!!
- titan - Tuesday, Jun 4, 13 @ 12:50 pm:
=== - biased observer - Tuesday, Jun 4, 13 @ 11:55 am:
I think MJM is blocking SB2404 because it isn’t a very good bill to solve the fiscal problem. Pretty simple. ===
One massive flaw with you conjecture there. IF that were the case, there ought to have been an MJM sponsered bill that does address the “real problem”. Where is that?
- Old and In The Way - Tuesday, Jun 4, 13 @ 1:18 pm:
I suspect most readers and participants in this forum would agree but I think it needs to be said. Rich you are not part of the problem…..you and Capitol Fax, as well as those who participate are part of the solution. Perhaps not directly but certainly this forum contributes far more to the dialogue than a stack of Tribune editorials. As I travel across the country I usually cite this forum as one of the parts of the fourth estate that actually works! Than you, I wish I had more time to participate but we have many fine contributors. This includes Oscar!
- biased observer - Tuesday, Jun 4, 13 @ 1:28 pm:
friends,
as i have stated many times, it will take pension reform AND revenue increases to solve this problem.
- walkinfool - Tuesday, Jun 4, 13 @ 1:30 pm:
It’s not your job to be helpful. But you are a highly trusted source. Thank you.
- Anon. - Tuesday, Jun 4, 13 @ 1:31 pm:
Old and in the Way and Police Powers –
I was not trying to say the “police powers” argument would work for any of the pension reform bills. To the contrary, the Blaisdell court stated that, for the police powers argument to succeed, the act itself stated that its purpose was to meet emergency conditions; the act sought to protect a basic societal interest, not a favored group; relief was narrowly tailored to meet emergency needs; the imposed conditions were reasonable; and the legislation was limited to the duration of the emergency.
I don’t see how any bill introduced so far meets these criteria. Also, the courts are even more stringent when the state is trying to reneg on its own contract. As has been pointed out by others, the US Trust case said that “a State cannot refuse to meet its legitimate financial obligations simply because it would prefer to spend the money to promote the public good rather than the private welfare of its creditors.”
- Old and In The Way - Tuesday, Jun 4, 13 @ 1:44 pm:
Anon.
You get it, right down to the case law. How is it that most of our legislators, many of whom are lawyers, either don’t get it or choose to ignore the legal precedents? Not only do I think that SB1 would be ruled unconstitutional but probably SB 2404 as well since it offers no option to maintain the status quo. After reviewing the Maag case I think there is even some question as to the legality of charging retirees for health care premiums. (The Narduli ruling was a joke. And was predictable I might add.) It’s not that the Illinois constitution is that hard to read and it is pretty clear as to its intent. I can only surmise that our legislative brain trust has made the decision to ignore the reality of the situation in the hope that they can pull a fast one. Good luck with that one…….
I heard Paul Powell once say in response to a similar situation that there must be “…..,somethin’ cookin’ somewhere cuz we ain’t that smart and they ain’t that dumb.”
- Police powers to avoid political choices - Tuesday, Jun 4, 13 @ 1:52 pm:
-Anon-
Thanks for clarifying your point.
- PublicServant - Tuesday, Jun 4, 13 @ 2:02 pm:
But that’s what I worry about Old. The bills, both of them, were clearly unconstitutional, but Madigan was confident that he could get a majority of Justices to go along. The only way that could happen would be threats, bribes, or both. Why would they propose and back the bills otherwise? Do they live in that much of a bubble down there?
- biased observer - Tuesday, Jun 4, 13 @ 2:07 pm:
public,
you have officially entered the world of “crazy talk.”
- Old and In The Way - Tuesday, Jun 4, 13 @ 2:13 pm:
Public Servant
Maybe. Or maybe the ISC ruling might give them cover to raise revenue. They might even get lucky and the ISC rules in their favor, but I doubt it from my experience. Too much fallout both statewide and nationally. This is contract law my friend and if I were a creditor of the state I would not feel comfortable with the precedent. I can see the rating folks being a bit nervous about this as well. as an institutional investor would this make you comfortable with Illinois bonds? It could even end up at the SCOTUS. No, I have to think there is more going on here than is obvious.
- PublicServant - Tuesday, Jun 4, 13 @ 2:13 pm:
B.O. - I have no idea what you’re talking about, and that makes at least two of us.
- Algonquin J. Calhoun - Tuesday, Jun 4, 13 @ 2:18 pm:
PublicServant -
My take on B.O. - repeat the same mantra, no facts, confidence of knowing what “the people” want, no Constitutional way out of this so-called problem.
Remember Bo Jackson and the “Bo Knows” campaign? Here, its slightly different: “B.O. Knows What The People Want”, “B.O. Knows Who Is And Isn’t Crazy,” “B.O. Knows What’s Best For Illinois”, etc.
B.O. knows little . . .
- Quinn T. Sential - Tuesday, Jun 4, 13 @ 2:32 pm:
{Union Man - Tuesday, Jun 4, 13 @ 12:46 pm:
The State of Illinois does not have a pension problem!! It has a revenue problem!! Do you think for one minute that even if SB1 passed and was found constitutional that the general assembly would reign in overspending?}
Since you don’t seem to have one yet, let this be your first clue:
We don’t have a revenue problem; we have a SPENDING PROBLEM!!
- RNUG - Tuesday, Jun 4, 13 @ 2:45 pm:
Quinn T. Sential @ 2:32 pm:
Suggest you review what Martire has to say about the State budget. You don’t have to agree with his conclusions or with what he considers vital state spending, but it is clear from his analysis there IS a revenue problem.
- Old and In The Way - Tuesday, Jun 4, 13 @ 3:07 pm:
RNUG
Don’t confuse them with facts and reality! It’s the same mantra over and over again. Simple solutions for complex problems usually don’t work out well. Martire does a great job laying it all out if only people would take about 20 minutes to just cover the basics…..the problem is that it doesn’t fit their preconceived notions of reality!
- Calico Jim - Tuesday, Jun 4, 13 @ 3:16 pm:
“You’re not helping” is just Madigan’s view of transparency in government. He doesn’t like it. Transparency get in the way of his agenda.
- dupage dan - Tuesday, Jun 4, 13 @ 3:39 pm:
The state will not willingly give up the ability to siphon assets from the pensions and there seems little doubt that they would continue profligate spending no matter what (see new budget increased by $2bill). Cullerton’s bill may not be “more” constitutional than MJM’s but there was more consensus. Cullerton called MJM’s bill for a vote - MJM didn’t reciprocate. His plaintive “you’re not helping” whine followed up by a public rebuke of Cullerton can’t be described as helpful, either. Sounds more like sour grapes. A crack in the facade.
- RNUG - Tuesday, Jun 4, 13 @ 3:46 pm:
Old,
Glad to see you back. Always enjoy your comments.
- Old and In The Way - Tuesday, Jun 4, 13 @ 4:34 pm:
RNUG
Thanks! I had a day off and thought I’d check in. I was back in Illinois last week for a few days, graduation time you know. What a melt down!
I find it interesting that Illinoisians think they know what others think of them and what’s going on. Those in the know keep asking me why we are not pursuing the real problem, revenue, and why we don’t resent the bond rating people more! Most don’t really have an opinion now that Blago’s is out of the media. I’m in New Jersey next week and well see what they think I suppose!
- wordslinger - Tuesday, Jun 4, 13 @ 5:15 pm:
–The state will not willingly give up the ability to siphon assets from the pensions and there seems little doubt that they would continue profligate spending no matter what (see new budget increased by $2bill).–
How does the state “siphon assets from pensions?”
Either they make the full annual payment or they don’t. Right now, they are.
- Amalia - Tuesday, Jun 4, 13 @ 5:53 pm:
somewhere, some staffer is screaming and crying, “Leave Mike Madigan alone!”
- RNUG - Wednesday, Jun 5, 13 @ 8:43 am:
wordslinger @ 5:15 pm:
Actually, not all of the the full payment is making it into the pension funds right now. In the past, when they floated pension bonds, those payments were separate. The last series, the payments come out of the “full” payment before it goes into the pension funds. Very few people realize that slight of hand occurred.