* Metro News Service…
State officials are still trying to convince judges that the pension law doesn’t violate the Illinois constitution.
Attorney General Lisa Madigan filed an opening brief with the Illinois Supreme Court this week, arguing lawmakers can make changes to pension benefits in an emergency situation.
I(L)awyers for the state argued that the government’s so-called emergency police powers — the ability to take action to ensure the functions of government — trump the protections of the pension clause.
State lawyers said the ability to fund necessary government services, as well as to continue paying out pensions, has been severely hampered by paying an increasing amount of the state’s checking account to fund the pension systems.
“According to the circuit court’s holding, for example, faced with an epidemic requiring the state to purchase and distribute vaccines or other costly medication, the state could not even temporarily reduce pension benefits to cover those costs,” lawyers for the state argued.
“Nor, in a period of prolonged deflation … could the state reduce pension benefits even if the corresponding rise in benefits caused by 3 percent annually compounded COLAs caused every dollar of state revenue to be spent on pension benefits,” the state filing said.
* The full filing is here, so go have a look-see.
* The AG’s office also sent several amicus briefs which have not yet been filed…
(1) City of Chicago
In its brief, the City of Chicago discusses the massive pension crisis that it faces, with liabilities that are growing by millions of dollars a day and explains why it cannot solve the problem without reform that could be threatened if the circuit court’s absolute rule were upheld. The first part of the brief in particular includes specific information about the scope of the City’s pension crisis, including that the annual underfunding for just two of the City’s pension funds ($900 million) exceeds the total projected property tax receipts for 2015 ($830 million) and that the City has the lowest credit rating of any major city other than Detroit.
(2) Illinois Municipal League
The Illinois Municipal League is a not-for-profit association of 1,121 Illinois municipalities. Its brief explains that many municipalities in Illinois are in financial crisis and will face a choice between paying full pension benefits and maintaining public safety. Pages 8-16 of the brief provide examples, including examples of municipalities whose police and/or fire pension funds are less than 30% funded.
(3) The Civic Committee of the Commercial Club of Chicago
This brief focuses primarily on the importance of upholding the pension reform law for the economy of the State.
(4) Will-Grundy Center for Independent Living, Transitions Mental Health Services, Mental Health Centers of Illinois, Youth Network Council (D/B/A Illinois Collaboration on Youth), and Omni Youth Services
This brief addresses the consequences of the pension crisis for social services in the State. It points out that currently one out of every five budget dollars is spent on pension obligations and that since 2000, the State has cut spending on human services by $2 billion in real, inflation-adjusted dollars, and it talks about some of the specific consequences of these cuts. Page 9 of the brief shows pie charts of the portion of the State’s revenue that have been and will have to be spent on pensions.
(5) Chicago Public Schools, Chicago Park District, and Chicago Transit Authority
This brief describes the reforms that the CPD and the CTA have already undertaken, in cooperation with the unions that represent their employees, and it explains why a categorical rule that the police powers can never apply to pension contracts could threaten those otherwise successful reforms. Similarly, it explains why the CPS desperately needs to enact some form of pension reform.
There are four other amicus briefs that focus in different ways on the fact that the contractual rights in the Pension Clause are not intended to be absolute. They are:
(6) Contracts Professors Katharine Baker, Wendy Epstein, and Adrian Walters
These contracts professors explain that all contracts incorporate implied terms and that therefore no contract is absolute.
(7) Constitutional Law Professors Tom Ginsburg, Tonja Jacobi, Zoë Robinson, Mark D. Rosen and Christopher W. Schmidt
The constitutional law professors explain in this brief that constitutional rights are not absolute, even when they are couched in absolute language, as they often are.
(8) International Municipal Lawyers Association
This brief argues that the federal Constitution prohibits a state from surrendering its core police powers and the court should give deference to the General Assembly’s understanding of the Pension Clause.
(9) Illinois Policy Institute
This brief describes the purpose of the Pension Clause, which was to elevate public pensions to contractual rights from their previous status as gratuities that could be changed at any time by the legislature. It argues that such contractual rights are not absolute, and it discusses cases from other States interpreting similar constitutional provisions.