(A) spokeswoman for Attorney General Lisa Madigan said the decision “has no direct impact” on the pension litigation.
“While this decision is very clear on the fact that the pension clause covers health care benefits, the arguments in the pension reform litigation are different than the ones in this healthcare case,” attorney general spokeswoman Maura Possley said in an email. “We will continue to vigorously defend the pension reform law.”
Supporters of the pension reduction law say those legal issues revolve around the question of whether the legislature essentially has emergency powers to modify the benefits in order to deal with a funding crisis and ensure the stability of the pension funds.
“This landmark law was urgently needed to resolve the state’s $100 billion pension crisis,” Quinn spokesman Grant Klinzman said in an email. “It was also urgently needed to ensure that teachers, university employees and state workers who have faithfully contributed to the pension system have retirement security.
“We’re confident the courts will uphold this critical law that stabilizes the state’s pension funds while squarely addressing the most pressing fiscal crisis of our time by eliminating the state’s unfunded pension debt.”
John Myers, an attorney who represents plaintiffs in both cases, said the attorney general’s office was “whistling past the graveyard.”
“A strong signal has been sent by the Supreme Court that is going to affect the outcome of that other case,” Myers said.
* 3:27 p.m. - From Kwame Raoul…
State Senator Kwame Raoul (D-Chicago 13th) issued the following statement on the Illinois Supreme Court’s decision in Kanerva v. Weems that a 2012 law altering state retirees’ health insurance benefits violated the Pensions Clause of the Illinois Constitution. Raoul chaired the conference committee that produced last year’s compromise pension reform law, which is now the subject of pending litigation, and negotiated a reform plan for City of Chicago retirement systems.
During the years-long debate over various pension reform proposals, I have consistently cautioned that we must align our actions with the constitution’s protections of state workers and their benefits. However, while we could examine previous decisions and discuss the legal precedents, there was no sure way to obtain guidance from the courts on this matter aside from passing a law and waiting for them to react.
Today, we begin to glimpse the nature of this reaction.
The Illinois Supreme Court has handed down a forceful decision, backed by six of its seven justices. Its powerful affirmation of the constitution’s protection of contractual rights and promised benefits may serve as a predictor of how this court will handle challenges to Senate Bill 1 and similar reform measures.
Today’s ruling did not speak directly to the “police powers” argument that in times of fiscal emergency, the state may be justified in taking extraordinary steps to balance its responsibilities and carry out its duties to all residents. But the court did clarify that in addition to protecting contractual rights, the Pensions Clause insulates public employees from the diminishment of their benefits by the General Assembly.
We must wait for the specifics of future opinions to firmly establish the parameters of a constitutional approach to meeting our obligations and setting our state on a firm financial footing. No matter what those specifics are, I remain committed to a long-term solution that improves our state and protects the rights of our valued public employees.
After many years of hard work, the Illinois General Assembly crafted and Governor Quinn signed a significant piece of pension reform legislation last December which protected our state from financial implosion, while also protecting the pension benefits of Illinois’ state and municipal employees.
Today’s state retiree health care ruling considered a different set of facts than that important legislation, and it is a fundamental premise of our legal system that a court cannot preemptively rule on a matter that is not yet before them.
Our state’s ability to continue providing crucial services, while securing public employee pensions, requires that the pension reform legislation take effect.
Not to be confused with The Civic Federation, which is led by Lawrence Msall. This is Ty Fahner’s group. The two entities are not affiliated with one another.
The Illinois Supreme Court ruled today that health care benefits for retired state and university employees are protected by the pension clause of the state constitution and cannot be diminished or impaired.
The Supreme Court ruled that a lower court was wrong to dismiss the four consolidated lawsuits (one supported by AFSCME, IFT, INA and FOP) which argued that SB 1313 was unconstitutional. That legislation had effectively allowed the state to diminish health care benefits for retirees by imposing new and higher health insurance premiums.
The Supreme Court sent the case back to the circuit court for further proceedings.
AFSCME is very pleased that the Supreme Court has agreed with us that affordable health care in retirement, a promise made to tens of thousands of Illinois public servants in exchange for their service, is protected by the constitution.
“The Supreme Court ruled today that men and women who work to provide essential public services — protecting children from abuse, keeping criminals locked up, caring for the most vulnerable and more — can count on the Illinois Constitution to mean what it says,” AFSCME Council 31 executive director Henry Bayer said. “Retirement security, including affordable health care and a modest pension, cannot be revoked by politicians.
“Unions representing public employees and retirees have stood virtually alone against political and corporate-funded attacks on retirement security,” Bayer added. “Time and again we have urged legislators to respect the constitution they are sworn to uphold, and to work together with us to develop fair and constitutional solutions to the state’s very real fiscal challenges. We remain ready to work in good faith with anyone to do so.”
Today, the Illinois Supreme Court made it very clear that the Pension Clause means what it says.
The Court cannot rewrite the Pension Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.
The Clause was aimed at protecting the right of public employees and retirees to receive their promised benefits and insulate those benefits from diminishment or impairment by the General Assembly.
If the Court’s decision is predictive, the challenge of reforming our pension systems will remain.
As I have said from the beginning, I am committed to identifying solutions that adhere to the plain language of the constitution
* Take a moment and read between the lines of Illinois Supreme Court Justice Anne Burke’s dissent in the retiree health insurance case…
To reach its result, the majority must read into the pension protection clause language that is not there. Nowhere in the clause does it state that every benefit which “results from,” is “conditioned on,” “flows directly from” or “is attendant to” being a member of a pension system is provided constitutional protection. These phrases, which form the crux of the majority’s opinion, are simply crafted out of whole cloth. It is fundamental that the judiciary may not add language to a constitutional provision that was not approved by the voters of this state. To do so is to usurp the sovereign power of the people. The majority’s addition of language to the clause is error.
Moreover, by adding language to the pension protection clause, the majority fundamentally changes its meaning. The clause no longer protects the statutory benefits provided by a pension or retirement system. Instead, it provides constitutional protection to any statutory benefit—however unrelated to pensions—if the recipient of the benefit is a member of a pension system. And the majority provides no limit to this holding. Should the city of Springfield enact an ordinance which states that the members of the municipal pension system will receive an honorary plaque upon retirement, that benefit would “flow from” or be “conditioned on” membership in the system. The plaque, under the majority’s reasoning, would be a constitutionally protected contractual right that could not be diminished or impaired. I do not think this is what the drafters of the pension protection clause intended.
Unsurprisingly, nothing in the constitutional debate regarding the pension protection clause supports the majority’s reading of the provision. As the majority candidly acknowledges, the constitutional debate contains no references to health insurance premiums or other non-pension benefits for retirees. To the contrary, the unambiguous statements of the sponsoring delegates reflect that it was designed to protect a public retiree’s right to collect post retirement income in the form of an annuity and to ensure that the terms under which an employee acquired that right could not be altered to his or her detriment. […]
In sum, neither the plain language of the pension protection clause, the constitutional debate, our own case law, or case law from other jurisdictions supports the majority’s position. The pension protection clause protects pensions, not subsidized health care premiums.
Even though Justice Burke clearly disagrees with this particular ruling, it certainly appears that she agrees with the majority on the “clear” and “plain” language of the state Constitution’s pension protection clause.
The College of DuPage won’t receive a $20 million state construction grant now that Gov. Pat Quinn has seen an email detailing President Robert Breuder’s strategy to secure the long-promised funding for the Glen Ellyn school.
“The tactics used by the president in his email” convinced the governor not to release the $20 million the school hoped to use for a Teaching and Learning Center, a Quinn spokesman said Wednesday.
“We are suspending the possibility that they can submit a project for that funding,” David Blanchette said.
COD spokesman Joseph Moore said the school did not have a comment Wednesday evening but may have one Thursday.
In case you missed it the other day, the background on that notorious e-mail is here.
* Breuder told the Daily Herald his side of the story earlier this week…
Breuder said his May 9 email was part of an effort to get board members on the same page for the project.
Breuder said COD has known for at least a year it needs more classroom space. He said the school is operating at nearly 90 percent capacity during peak hours and needs to expand its facilities if enrollment continues to grow as projected.
“It’s an internal memorandum trying to work the politics inside my own board,” Breuder said of the email, which For the Good of Illinois obtained through a Freedom of Information Act request.
Breuder said the original pledge for the grant dates to 2002, when then-Gov. George Ryan announced community colleges would get money to replace temporary buildings with permanent ones. COD never got its share, even though the state budgeted it in both 2004 and 2009, Breuder said.
The hope is Quinn will act to change that.
“All I know is he’s willing to go ahead and release money that’s been earmarked for us for a long time,” Breuder said.
it is clear that if something qualifies as a benefit of the enforceable contractual relationship resulting from membership in one of the State’s pension or retirement systems, it cannot be diminished or impaired. Thus, the question presented is whether a health insurance subsidy provided in retirement qualifies as a benefit of membership. […]
Giving the language of article XIII, section 5, its plain and ordinary meaning, all of these benefits, including subsidized health care, must be considered to be benefits of membership in a pension or retirement system of the State and, therefore, within that provision’s protections.
If they had intended to protect only core pension annuity benefits and to exclude the various other benefits state employees were and are entitled to receive as a result of membership in the State’s pensions systems, the drafters could have so specified. But they did not.
the drafters chose expansive language that goes beyond annuities and the terms of the Pension Code, defining the range of protected benefits broadly to encompass those attendant to membership in the State’s retirement systems. Then, as now, subsidized health care was one of those benefits. For us to hold that such benefits are not among the benefits of membership protected by the constitution would require us to construe article XIII, section 5, in a way that the plain language of the provision does not support. We may not rewrite the pension protection clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.
Because we find that this issue can be decided based on the plain language of the provision, “the debates can have little or no bearing or effect” with respect to how we construe that language.
Even if reference to the convention debates were appropriate, it would not aid the State’s position. […]
In light of the constitutional debates, we have concluded that the provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them.
Emphasis added for obvious reasons. The new pension law sure appears dead to me.
For the foregoing reasons, we conclude that the State’s provision of health insurance premium subsidies for retirees is a benefit of membership in a pension or retirement system within the meaning of article XIII, section 5, of the Illinois Constitution, and the General Assembly was precluded from diminishing or impairing that benefit for those employees, annuitants, and survivors whose rights were governed by the version of section 10 of the Group Insurance Act that was in effect prior to the enactment of Public Act 97-695. Accordingly, the circuit court erred in dismissing plaintiffs’ claims that Public Act 97-695 is void and unenforceable under article XIII, section 5.
Our holding that plaintiffs are entitled to proceed on their pension protection clause claims obviates the need to address the sufficiency of their remaining claims. Because plaintiffs have obtained all the relief that they seek, any comment on their other claims would be advisory and in conflict with traditional principles of judicial restraint. See In re Alfred H.H., 233 Ill. 2d 345, 351 (2009) (recognizing that Illinois courts generally do not consider issues where the outcome will not be affected, regardless of how those issues are decided).
The judgment of the circuit court of Sangamon County is reversed, and the cause is remanded for further proceedings.
That sound you hear is the state’s bond rating collapsing.
* The final nail in pension reform’s coffin…
Finally, we point out again a fundamental principle noted at the outset of our discussion. Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner. This rule of construction applies with equal force to our interpretation of the pension protection provisions set forth in article XIII, section 5. Accordingly, to the extent that there may be any remaining doubt regarding the meaning or effect of those provisions, we are obliged to resolve that doubt in favor of the members of the State’s public retirement systems.
* This is going to be a very light day for me. I’m heading out of town soon, so we’ll have this post, the upcoming Illinois Supreme Court ruling shortly after 9, and then maybe one or two more.
This is from a very thoughtful Greg Hinz post that I think gets right to the heart of the real world problems with the Hobby Lobby case…
In his majority opinion, Justice Sam Alito argued that “closely held” private companies such as Hobby Lobby are close to a sole proprietorship in their mix of personal and business matters. “We do not hold, as the principal dissent alleges, that for-profit corporations and other commercial enterprises can opt out of any law,” he said. But Congress made it clear in a 1993 law that religious views of such a company will prevail when other means exist to protect those views — in this case, perhaps having the government or an insurance company pay for the contraceptives, rather than Hobby Lobby, Mr. Alito added. […]
In fact, [Justice Ruth Bader Ginsburg wrote in dissent], in what I found to be a truly insightful point, there is a huge difference between a sole proprietorship and an incorporated firm such as Hobby Lobby, which has 500 stores in 47 states.
“In a sole proprietorship, the business and its owner are one and the same,” she wrote. “But incorporating a business, however, an individual separates herself from the entity and escapes personal responsibility for the entity’s obligations. One might ask why the separation should hold only when it serves the interest of those who control the corporation.” […]
Hobby Lobby’s owners got something special from society when they incorporated: exemption from personal legal liability, preferred tax treatment, etc. But when it comes to paying the dues of setting up shop in the public square — following the public’s rules — they’re supposedly no longer a corporation?
Mr. Alito tacitly concedes the point. The Obama administration “would put these merchants to a difficult choice: either give up the right to seek judicial protection of their religious liberty or forgo the benefits, available to their competitors, of operating as corporations.”
