* Pension reform proponents are doing a great job of getting their singular message out to editorial boards. Here’s the Dispatch-Argus: “Why Illinois pension clause cannot be ruled absolute”…
Rep. Elaine Nekritz, one of the architects who built SB 1, is among those who believe that the authority exists in the right circumstances for the state to curtail those benefits and, if the case against SB 1 is judged on that basis, it would stand. […]
And the court’s ruling in this case could have impact well beyond our own state borders. SB 1 supporters we spoke with, including Rep. Nekritz, said that if the high court provides absolute protection for pensions it “will mark a sea change here and everywhere” because virtually every constitutional provision going back to the Civil War has been found to have limitations through reasonable police powers. For example, standards for search and seizures, the power of eminent domain, the right to bear arms and the free speech rights we already mentioned.
A number of friend-of-the-court briefs offered by constitutional scholars and others detailed the case law that supports upholding such powers regarding pensions. Because justices agreed to expedite the case, those briefs will not be part of the written record, but Ms. Madigan should have no trouble proving the state’s case regarding the need to exercise police powers in the current pension crisis, particularly given that the state’s pension clause makes clear that pension agreements are contractual and therefore subject to contractual law.
We believe that if they view all of the evidence, justices will see that doing nothing about pensions is the equivalent of shouting “fire” in that crowded theater and the fallout will be more than this financially troubled state can stand.
* The Southern Illinoisan: “Pensions and Absolutes”…
In reality, few absolutes are really that, and even our most well-known federal amendments to the constitution have restrictions. Our First Amendment right to free speech is not absolute – as evidenced in the oft-quoted “can’t yell ‘fire’ in a crowded movie theater” scenario. Our Second Amendment right to keep and bear arms is restricted each time we go through airport security. And the Eighth Amendment “absolute” prohibition of cruel and unusual punishment allows capital punishment to be decided on a state-by-state basis.
And yet, Judge Belz chooses the state pension funding provision of the Illinois State Constitution as an absolute. We don’t think so.
* Sun-Times…
Is the pension clause in the state Constitution, which protects benefits from being impaired or diminished, so absolute and so ironclad, that it trumps all else? In a world of severely restricted public resources and the state’s staggering $110 billion unfunded pension liability, should pension payments always be first in line, ahead of schools, prisons and social services?
A powerful constitutional argument says no. The argument, which we hope will prevail, says that the state’s pension clause is not absolute, that it doesn’t trump all else. In extreme circumstances such as those we find ourselves in today, benefits can — and should — be reduced. Public employees unfairly carry the burden on this, but the law leaves their benefits largely intact while scaling back annual cost of living increases. Most important, the law greatly reduces a very real risk of insolvency for the state’s pension funds, which would be far worse for a retiree. […]
The unions refuse to entertain this view, saying there can be no exceptions. That absolutist view leads to the second, equally convincing argument. In constitutional law, there is no such thing as an absolute right, a right that isn’t subject to exception or cannot be regulated, as a group of law professors wrote in a brief to the Supreme Court. Even the country’s most highly cherished rights – the First Amendment right of free speech and the Second Amendment right to bear arms — are subject to limits. The language is absolute, but the practice never is, with every right potentially subject to regulation for pressing reasons.
* Madeline Doubek…
“Constitutions are always subject to interpretation and I think, historically, have not been considered to be absolute,” [Rep. Elaine Nekritz] said, citing the U.S. Constitution’s right to bear arms as one of those examples that show a provision “replete with restrictions.”
* From the Illinois Times…
The state points out that prior to the 1970 Constitutional Convention that enacted the pension clause in question, pension benefits were considered “gratuities” that could be changed at any time. Madigan’s office says the convention delegates created a layer of protection around benefits by ensuring they would be considered a contractual relationship. The state claims all contracts are understood to be changeable.
“If the pension clause really bars the state’s exercises of its police powers under every possible circumstance, no matter how dire the consequences, then the ‘contractual relationship’ the clause creates is unlike any other contractual relationship ever recognized in American law,” lawyers for the state wrote.
Madigan’s office is careful to say that accepting the contract theory won’t lead to lawmakers using it to justify slipping out of other contracts at will. The state lawyers claim that police powers only apply in certain circumstances, although they don’t address the threshold for triggering those powers.
* But, unlike everybody else, the IT takes the counter-claims seriously…
“What we are trying to merely say,” convention delegate Henry Green said in 1970, “is that if you mandate the public employees in the state of Illinois to put in their five percent or eight percent or whatever it may be monthly, and you say when you employ these people, ‘Now, if you do this, when you reach sixty-five, you will receive $287 a month,’ that is, in fact, what you will get.”
The plaintiffs further bolster their argument by citing a letter from then state Sen. E.B. Groen to delegate Green. In the letter, Groen claims Green’s proposal for what would later become the constitution’s pension clause was “inflexible” and “would only serve to curtail the powers of the Legislature and limit its authority.” Groen urged Green to revise the clause by making the protection “subject to the authority of the General Assembly to enact reasonable modifications .…” Green rejected the idea, and Groen’s proposal was never presented to the rest of the delegates. […]
Illinois’ pension systems have been underfunded since at least 1917, the plaintiffs say, noting that the state commission tasked with overseeing the systems at the time said they were “moving toward crisis” due to insolvency caused by “financial provisions entirely inadequate for paying the stipulated pensions when due.” In 1969, the year prior to the Illinois Constitution and its pension clause being adopted, the state pension systems were only funded at about 41.8 percent, the plaintiffs say. By 2013, when the law in question was passed, the systems were funded at 41.1 percent.
The state’s pension systems have always had enough money available to pay their existing retirees. Instead, pension underfunding refers to the systems’ inability to pay now for all current and future benefits – a distinctly unlikely scenario that would only arise if all existing employees retired at once and began drawing a pension. Illinois’ underfunding is still considered a problem, however, because most other states can cover a significantly higher percentage of their current and future pension obligations, making Illinois look bad by comparison. […]
One of Rauner’s proposed changes hinges on defining benefits as only those already accrued, excluding future benefits yet to be earned. However, Rauner’s plan may be undercut by the plaintiffs’ arguments in the existing pension lawsuit. The plaintiffs cite Constitutional Convention delegate Helen Kinney, who said in 1970 at the convention: “All we are seeking to do is to guarantee that people will have the rights that were in force at the time they entered into the agreement to become an employee ….”
While I agree that this pension clause is unlike any other pension clause or contract, it was purposely drafted to be as rigid as possible. The whole intent behind the clause was to prevent the GA and the governor from doing exactly what they ended up doing with SB1. Delegates rejected a mandate on full government funding, but the clause they adopted was seen as a way of scaring the politicians into doing the right thing. Obviously, it didn’t work.
* And while you can accurately say that all other constitutional rights are limited, that’s because of the way they’re drafted. Here’s the First Amendment…
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
Let’s take the “freedom of speech” example since it’s cited so often by SB 1 proponents. The founders did not explicitly define what free speech actually is. That’s implicitly left up to Congress and the courts.
Now, the Illinois pension clause…
Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.
“Membership…” is what it is. And while “enforceable contractual relationship” may be left open to some interpretation, “the benefits of which shall not be diminished or impaired” is clearly not. It’s gonna be really tough to get around that crystal clear language and its obvious intent.
- Mouthy - Monday, Mar 9, 15 @ 9:47 am:
This is dumb. The state can raise revenue or cut spending in many areas. So there is no emergency let alone the prospect of inventing new meanings to absolute language..
- Steve - Monday, Mar 9, 15 @ 9:53 am:
Words have meaning. The Illinois Supreme Court is there to interpret the state constitution. It’s pretty clear. A contract is a contract. Yes, Illinois can’t afford those pensions. The Illinois constitution needs to be changed to remove that provision. Pensions, in the public or private sector , are Ponzi schemes. No one knows how many taxpayers Illinois will have 5 or 10 years from now. The solution is moving towards a total 401-A system, then we will not have these issues which are not solvable through higher taxes.
- anon. - Monday, Mar 9, 15 @ 9:54 am:
Kanerva
- Bob the Slob with a Cushy State Job - Monday, Mar 9, 15 @ 9:54 am:
I had someone try and tell me that the Constitutional language might be absolute but you can’t force a tax increase to pay for pensions. I say why not?
- jazzy - Monday, Mar 9, 15 @ 9:59 am:
If they want to create a tier 3 as a 401K that is I believe doable. Only problem again is who will match x numerous of dollars? The pension fund was not funded by legislative body so why would anyone think they would put into a 401K? Hmmm the decrease of pension who destroy some retirees. As for people saying that is ok for state employees to take this Hugh hit ….well it is not OK. Really it is just about demonize the state worker. State employees the one Rauner is about hating are not the big pension people.
- Very Fed Up - Monday, Mar 9, 15 @ 10:01 am:
Think most reasonable people would agree the idea of changing benefits for someone already retired or near retirement is wrong and immoral.
For those that are 20 years from retirement and certainly all new employees there is no reason why everyone cant be shifted towards a 401K system that the rest of us live with.
- Demoralized - Monday, Mar 9, 15 @ 10:01 am:
I’ve never understood the arguments of earned vs. not earned. There is no such distinction. Once you are part of the system all benefits have become earned all the way to retirement.
- howard - Monday, Mar 9, 15 @ 10:01 am:
From the Chicago Tribune:
Illinois Senate President John Cullerton said Sunday that the state’s massive public employee pension debt is not a “crisis,” but instead an issue being pushed by business-backed groups seeking lower income taxes at the expense of retiree benefits.
“People really misunderstand the nature of this whole problem. Quite frankly, I don’t think you can use the word ‘crisis’ to describe it at the state level,” Cullerton said in an interview on WGN-AM radio.
- Robert the 1st - Monday, Mar 9, 15 @ 10:02 am:
“The pension fund was not funded by legislative body so why would anyone think they would put into a 401K?” I take it you believe that the state pension funds are self funded by employee contributions? LOL… if that were the case why wouldn’t everyone set aside 4% and retire at 55 with 80%? Employee contributions are peanuts compared to what the state pays out.
- Dan Johnson - Monday, Mar 9, 15 @ 10:03 am:
Was these delegate discussion on requiring full funding by each GA for the pensions? That would be illuminating.
- Demoralized - Monday, Mar 9, 15 @ 10:04 am:
==the rest of us live with.==
If that’s the argument you are going with justifying a change in pensions its dumb.
Also, there is a very good reason not to change it. Those benefits were earned. I could care less what other people have or don’t have. Not my problem. If somebody wants to whine about it then maybe they should have gotten a different job with a different pension set up.
- Dan Johnson - Monday, Mar 9, 15 @ 10:05 am:
Typos aplenty:
Had there been any discussion by the delegates in 1969-1970 on whether the new constitution should include a requirement of full actuarial funding for each successive General Assembly for pension systems?
That would be an illuminating discussion.
- Reality Check - Monday, Mar 9, 15 @ 10:05 am:
Very Fed Up: there is no reason why everyone cant be shifted towards a 401K system
Actually there are three reasons:
1. 401(k)s cost more than pensions to deliver the same benefit (see e.g. http://www.nirsonline.org/index.php?option=content&task=view&id=871).
2. For the 80% of Illinois public employees who don’t have Social Security, going to a 401(k) would require adding that eligibility — making it more costly than the current system.
2. Freezing the pension plan for current employees and forcing them into a 401(k) is unconstitutional.
- ZC - Monday, Mar 9, 15 @ 10:07 am:
The Illinois Constitution ought not to be an economic suicide pact. But I do understand the arguments for why the courts have to read it as such. Fundamentally it’s not the courts’ fault if this is an increasingly dysfunctional governing document; it’s the legislature’s fault (and by extension the IL public - always remember, astute Cap Fax readers, the average Illinois STILL has no real clue, what a problem the pension obligations are for the state budget. The average Chicagoan I’d argue has no clue what a problem pension obligations will be for the next Mayor, and neither Rahm nor Chuy appear in a rush to educate them).
It’s doubly the legislators’ faults, especially the leadership and including Democrats, because after all the IL Constitution does provide for a remedy. The big missed opportunity here was 2008, where we could have held a constitutional convention to address some of these problems. But the IL powers that be feared what would happen (and I’d also put most of the labor unions in this category), and somebody worked to insert stilted and biased language into the voting instructions that about guaranteed the measure could not get to 60% approval. It would have been an uphill climb regardless, but once that language was in, it was for all effects dead.
To an extent they are now reaping the results. Madigan and co. wanted to keep and concentrate power and avoid any of the messiness that would go with a new convention that could have fixed this pension language. Now they are also keeping a fair share of the responsibility for the current mess.
- Robert the 1st - Monday, Mar 9, 15 @ 10:07 am:
“I could care less what other people have or don’t have. Not my problem.” Gee, I thought the same thing when your union chanted “raise the taxes.” Team Rauner should hire Demoralized as the new austerity spokesman. Anyone with sympathy for state employees would change course after reading your comments.
- Langhorne - Monday, Mar 9, 15 @ 10:10 am:
“if the case against SB 1 is judged on that basis, it would stand. […]”
If you buy the premise, you buy the joke, as they say.
Good PR campaign, but be careful. If the SCt throws it out, but more folks accept this viewpoint, it creates even more resentment toward public employees, if that’s possible.
- VanillaMan - Monday, Mar 9, 15 @ 10:11 am:
The General Assembly’s approach to this issue reminds me of a kid that murders his parents and then upon sentencing keeps telling the judge to be lenient because he is an orphan.
There is no record of good conscience on the part of the General Assembly regarding fiduciary responsibility here. The GA has done to state workers what it does not allow local governments to do to their workers. Somehow it was wrong in the eyes of state legislators to see local governments fail to provide for their personnel’s pension. The mandated payments. So, the same people who mandated pension payments for local governments, saw no need to mandate pension payments for themselves?
Those arguing there is some kind of police emergency which can wreck this constitutional guarantee, seem to have had no problem enforcing the exact same mandate upon lesser governments. So, it isn’t out of ignorance that the GA screwed state worker’s pensions - it was under the full knowledge that they were doing something they believed was a bad thing to do.
Legislators are empowered to fix this problem constitutionally. Their political unwillingness to do so doesn’t constitute any kind of emergency in the real world.
- Demoralized - Monday, Mar 9, 15 @ 10:11 am:
@Robert:
I’m not in the union. You know what they say about people who assume.
And, no, I don’t care. People are free to take whatever jobs they want. If you’ve taken a job with a crappy pension that’s your choice. I’m not a member of the lowest common denominator club, whereby some seem to think the solution to the problem is to bring everyone down to their level. That’s not a solution.
Bite me
- Pelonski - Monday, Mar 9, 15 @ 10:13 am:
I think the police powers argument has merit, even when it comes to the strong wording of the pension clause. There is some point where a state can no longer reasonable be expected to pay a debt because the debt is so large that doing so would be impossible. The State’s case in this situation, however, has a fatal flaw in that it is attempting to segregate public pension financing from all other state financing. I can’t see a reasonable court accepting that argument. My guess is the court will establish that the police power argument exists, but to impose police powers, the State must show two things:
1)There is no ability to pay the debt through increases in taxes or cuts in other services.
2)The burden of the diminishment is fairly allocated amongst all debtors of the State.
- Sir Reel - Monday, Mar 9, 15 @ 10:13 am:
Under the 5% income tax, full pension payments were made and the State met its other obligations (for the most part).
As has been pointed out many times, a 5% rate is not out of line compared to other states.
So what’s the emergency? Why does police power need to be invoked?
As was mentioned, because the 1% doesn’t want to part with their wealth.
- SkeptiCal - Monday, Mar 9, 15 @ 10:13 am:
The State violates its own agreements frequently with little accountability. A recent example is Quinn approving AFSCME 3% pay raises and then refusing to fund it. Then he claims, “Oh, it is not in the budget.” It has taken years to get that funded.
That is the kind of problem that was addressed in 1970 at Con-Con. There was at least a 75 year history of underfunding that was debated and the convention proposed to resolve this with an absolute. It is an absolute and there is no police power nor emergency power that can overcome it.
The so-called, “emergency” is a self-created delusion in the first place. But there does not need to be a trial because sometimes an absolute does exist when it is intended as such. This is one example.
I predict that will be the ruling of the Supreme Court.
Now those responsible for creating this mess will have to deal with it. Unfortunately, the cost will end up on the backs of current and future State employees either by fewer raises, layoffs or other lost benefits.
Sad all around.
- northernwatersports - Monday, Mar 9, 15 @ 10:13 am:
=Steve @ 953am=
=Yes, Illinois can’t afford those pensions.= Actually you are absolutely WRONG! Pensions, both public and private are completely affordable, IF funding for them is deposited on time, managed properly.
=The Illinois constitution needs to be changed to remove that provision.=
Your opinion suggests that opening the GA and Governor and all other layers of government to the Wild West style of governing would be better than what we have today. Sheesh! Its bad enough we’re where we are now, even when the existing language of the Constitution didn’t scare the politicians into funding the pensions properly. Now you’d give them carte blance?
=Pensions, in the public or private sector , are Ponzi schemes=
Agreed! So is Social security and Medicare and Medicade. I guess those should be ELIMINATED too? You go tell that to the 68 year old grandmother in Southern Illinois, who also happens to be Constitutional zealot when it comes to guns….See how she reacts!
=…then we will not have these issues which are not solvable through higher taxes.=
Actually, the modest increase in the Income tax that just expired PROVED that the current cash flow problem the State has in meeting its Pension obligations AND maintaining the basic services we’ve come to expect is a reasonable way to solve the problem.
I’m not advocating that revenue is the ONLY means to solve the pension problem (not CRISIS), but it must be part of the overall solution.
- He Makes Ryan Look Like a Saint - Monday, Mar 9, 15 @ 10:14 am:
They should not have allowed the tax increase to sunset. That alone shows there is no Emergency. I believe the real issue is if you allow the General Assembly to declare an Emergency, they could Spend like drunken sailors for 4-10 years, put the state back in an “Emergency” situation and cut some more. I believe this was why the Constitution was written the way it was.
- Robert the 1st - Monday, Mar 9, 15 @ 10:14 am:
Such a class act you are Demoralized. I’m shocked you’re not a union man. With so many grammar and spelling errors in your comments there’s no chance you’re privately employed… so still some sort of state job I imagine?
- Demoralized - Monday, Mar 9, 15 @ 10:20 am:
Robert:
Really? Do you have anything of substance to add? If you do I’ll be glad to address your points. If not, have a nice day.
- Norseman - Monday, Mar 9, 15 @ 10:20 am:
=== because virtually every constitutional provision going back to the Civil War has been found to have limitations through reasonable police powers. ===
Really? Funny thing is that the briefs I’ve read from the plaintiffs cite numerous cases where that’s not true. This is a fast and loose sales job to an eager buyer. As mentioned, only one of the above publications bothered to address the plaintiffs’ position.
Regarding the Amicus briefs, they were not considered due to timing not out of fear that they contained unassailable arguments. In fact, most just repackaged the AG’s brief and put an organizational spin to it.
- Demoralized - Monday, Mar 9, 15 @ 10:20 am:
Oh, and bite me again.
- Anonymous - Monday, Mar 9, 15 @ 10:22 am:
“because the 1% doesn’t want to part with their wealth”
That 1% of income retained by the taxpayer is more important to the lower end of the income spectrum than the top 1%
- Demoralized - Monday, Mar 9, 15 @ 10:24 am:
Norseman:
They are trying to take lemons and make lemonade. We’ll find out if their lemonade is any good shortly.
- Gone, but not forgotten - Monday, Mar 9, 15 @ 10:25 am:
The State workers not only made their contributions, they also endured constant demoralization during their tenures. The demoralization I speak of is the threats of reducing benefits, the reality of raising insurance costs and reducing coverages, the mantra of late: “do more with less”, no raises and when there were, raise barely covered increases in taxes and fair share union, all the while watching unqualified political hacks coming on board and being paid more than themselves. Did the legislation do the same? Now Lisa says it’s a crisis because the legislation did not make their contributions — and the workers are still being demoralized. When does this end?
- D.P.Gumby - Monday, Mar 9, 15 @ 10:32 am:
In addition to the fiction that the pension is an “emergency” justifying use of police powers comparable to a plague or natural disaster, the notion of “underfunding” is an actuarial fiction. As the full IT article states, the underfunding is based upon everyone retiring at the same time tomorrow. It is the same actuarial myth that said the General Assembly to skip years of payments into the pension funds because the markets were doing so well and the lack of payments would never harm the pensions! They were wrong then and they are wrong now. The economy is improving, rate of return in the markets is improving. A large part of the doomsday predictions are to force everyone into 401(k) that are big money for the financial houses that do the doomsday predictions!
- Very Fed Up - Monday, Mar 9, 15 @ 10:37 am:
It’s statements like this from demoralized that caused so many democrats to vote for Rauner
“I could care less what other people have or don’t have. Not my problem.”
Cut off services for the poor? No problem. Raise taxes on someone making 35K a year buried in student loan debt? No problem.
Ask for even the slightest reasonable adjustment to the pension system and suddenly its an “assault”. It’s the long as we are taken care of screw everyone else attitude that is why the public is so angry.
- The Dude Abides - Monday, Mar 9, 15 @ 10:44 am:
Illinois isn’t near to having a situation in which invoking emergency police powers is warranted. An external catastrophe such as World War II or the Great Depression of 1929 might warrant invoking police powers but we have no such situation in Illinois. Our so called pension crisis was self created by our legislature and past Governors. Skipping pension payments and using the money to fund other programs so that they could keep taxes lower than all our bordering states was an intentional act by our political leaders.
Since SB1 was passed we have seen more than a few new proposals for new spending which would not be classified as mandatory or necessary. Just last week there was discussion of doubling the earned income tax credit in Illinois. Do you seriously propose this and other new and unnecessary spending when you have a crisis of such magnitude that you seek the right to not having to honor contracts to your creditors? Another problem is that the state doesn’t seek to short all of their creditors of what they are owed, only one. That won’t fly with the court either.
- Wordslinger - Monday, Mar 9, 15 @ 10:45 am:
Blah, blah, blah, we borrowed money we don’t want to pay back.
Blah, blah, blah, fiscal emergency, police powers, we just cut taxes.
This marketing campaign for an outright money grab is weak, dreary and soon to be over, thank goodness.
- Carl Nyberg - Monday, Mar 9, 15 @ 10:50 am:
Illinois is a rich state.
Pension obligations can be paid.
Taxes will need to be raised.
So what?
I hear radio commercials that the Illinois General Assembly gave a tax break to car dealers peddling lease deals on new cars.
If there’s money to subsidize car dealerships, we haven’t remotely reached an “emergency”.
- lake county democrat - Monday, Mar 9, 15 @ 10:52 am:
These editorials remind me of Derrick Bell’s legal science fiction story “The Space Merchants” where the Constitution is twisted and sliced and diced to support a horrific act against African Americans. Yes, there are few absolutes in life - and the pension clause isn’t an absolute either, but it has been left untouched for nearly half a century. The Illinois Supreme Court may indeed reverse course, but if they do it will be rank, regardless of these editorials.
- Anonymous - Monday, Mar 9, 15 @ 10:53 am:
So when has Illinois used this “police powers” provision before?
- One of the 35 - Monday, Mar 9, 15 @ 10:56 am:
I have a question I have not previously seen discussed. If the State wins the pension argument in front of the SC, and can reduce pensions, will a retired state worker already receiving his or her pension, be able to recover a portion of the payments he or she made into the system due to the reduction in benefits? (i.e. I paid for $x pension benefit but will only receive $y. We had a contract. If you can welch on the agreement, I should be able to also. Give me back part of my money to reflect the reduction in benefit.)
- Pelonski - Monday, Mar 9, 15 @ 10:59 am:
Anonymous,
Illinois has never used the “police powers” argument (at least under the current constitution). That is why Judge Belz ruled SB1 unconstitutional.
- Name Withheld - Monday, Mar 9, 15 @ 11:00 am:
Apparently “police powers” aren’t needed to fund the judges’s pensions, which were left out of SB1.
But really, if we can define this as a police-powers emergency, then we have a whole lot more latitude in defining situations as requiring police-powers. Need to change our flat-tax to a progressive tax? Done - police powers emergency. Done. Need to change that crime victims law? Done. Need to appoint a new constitutional officer? Done.
It really does simplify a lot of matters. Geez.
- Harry - Monday, Mar 9, 15 @ 11:01 am:
Rich,
If you read the ConCon transcripts on the pension clause you will find it was NOT presented nearly as clearly as you seem to think. The advocates were all over the place on what it meant. One said it only promised “dignified retirement,” another that it only guaranteed that municipalities could not use new home rule powers to leave their cops with nothing, another that if you promised 2/3 of salary after 20 yrs of service, you couldn’t change to 1/3 of salary after 30 years. The debate, such as it was, was a mess. Then, after debate was closed, in final statements with no opportunity for questions, it became an absolute.
This whole thing is a product of sloppiness and dissembling, and if you read the transcripts you will see what I mean.
- RNUG - Monday, Mar 9, 15 @ 11:01 am:
Several commenters have made most the points I would have made in detail so I’ll try to condense my comments.
As to what the 1970 Con-Con delegates discussed, the transcripts are all posted online. Go read them. They make it crystal clear they feared something like what is occurring today and it was their intention to prevent it. That’s about as close as you can come to saying it WAS their intention to prevent the use of police powers to avoid paying the pensions.
As I’ve speculated before, the IL SC might find that such police powers exist in theory but that the facts don’t support any emergency existing for multiple reasons:
1) Historically, the pension funds have been this low and survived
2) The crisis is self-created through the GA’s failure to properly fund
3) The pension funds were being paid as scheduled by the ramp before the income tax decreased
4) Only one specific type of (non-immediate) debt was addressed
5) Legal reforms have already been implemented via Tier 2 and we just need time for the situation to turn around
6) Historically, the police powers argument has only been successfully used ONCE to negate public debt. See Arkansas during the Great Depression.
Bottom line: I expect the IL SC to either rule the Pension Clause is as close to absolute as possible or that while there may be an exception, it can’t be self-created
- RNUG - Monday, Mar 9, 15 @ 11:03 am:
== So when has Illinois used this “police powers” provision before? ==
That was the exact question Judge Belz asked of the State’s lawyers and the reply was silence …
- Chris - Monday, Mar 9, 15 @ 11:07 am:
Bob: “you can’t force a tax increase to pay for pensions. I say why not?”
Um, because Article IX, Section 1 of some thing called … what was it? oh, right … the Illinois Constitution sez:
“The General Assembly has the exclusive power to raise revenue by law except as limited or otherwise provided in this Constitution.”
and if the Supreme Court “ordered” the Legislature to raise taxes, that would violate the Constitution.
No one gets to pick and choose which parts of the Constitution they want to follow. It’s just like the calls for a graduated income tax to fund the pensions–the Constitution sez:
“A tax on or measured by income shall be at a non-graduated rate.”
Can’t be done, unless you amend the Constitution, and, well, if we’re amending the Constitution, there’s no reason to not modify the Pension Clause, too.
- jazzy - Monday, Mar 9, 15 @ 11:12 am:
@Robert the 1st….in order to speak to your comment regarding 4% retire at 55 you may want to visit www.srs.illinois.gov address and read tier 1. I believe this may help you better understand the criteria for retirement. Also, there are a number of books that discuss investing that may be beneficial. Pensions are different than a 401K. Investing of monies is the same….start early, make sound investments….kinda hard to do when the other half is not putting in their share.
- Former Merit Comp Slave - Monday, Mar 9, 15 @ 11:12 am:
Robert and others, Tune in 2:30 on Wednesday at the Illinois Supreme Court web site where they will be live streaming. Then come back here and let’s chat on Thursday.
- The Dude Abides - Monday, Mar 9, 15 @ 11:13 am:
Those hoping that SB1 will be upheld should be hoping that the Supreme Court lives in a vacuum and doesn’t really understand what this is all about.
Illinois just allowed its 5% income tax rate to lapse to 3.75% and the Governor wishes for it to later fall to 3%. In Iowa everyone to makes over $68,175 pays 8.98%, in Wisconsin everyone making over $21,820 pays 6.27% and those over $240,190 pay 7.65%. Missouri taxes are a bit lower than these two states but even they pay more than Illinois with everyone over $9000 paying 6%. Even in Kentucky everyone over $5000 is paying 5% and everyone over $75,000 is paying 6%.
The Governor and some business leaders are selling this nonsense that 5% in Illinois is a job killer. Cullerton is right, the powerful special interests want retirees to be cheated out of a lot of what they are owed so that they can continue to enjoy these very low income tax rates. When the income tax rate dropped to 3.75% at the start of the year 54% of that money went to 12% of the population. Under our current rates the wealthy are doing quite well. If those making $100k or more were paying 5.75% in Illinois they would still be paying less than they would in the neighboring states I mentioned previously.
- SAP - Monday, Mar 9, 15 @ 11:15 am:
Just because raiding pension funds was the method the GA used to pay for programs the state could not afford doesn’t mean that members of the pension funds should bear the full brunt of paying for all of those programs. As many have already commented, the GA found a way to balance the budget by passing the cost on to the entire state rather than the small minority who are members of state pension funds. Finally, if the GA can use the police powers argument to defeat the very strong language in the pension clause of the Constitution, the precedent would make it impossible for the state to issue any new debt in the future.
- Waldi - Monday, Mar 9, 15 @ 11:28 am:
Demoralized - You have perfectly articulated my sentiments. If I knew who you were I would gladly use part of my (meager) State pension to buy you a beer.
- Anonymous - Monday, Mar 9, 15 @ 11:34 am:
Can a state pass a law or have a constitutional provision that overrules its police powers?
Maybe the constitution pension protection clause is federally unconstitutional?
- kcjenkins - Monday, Mar 9, 15 @ 11:42 am:
The US Supreme Court has held that states lack the ability to permanently give away any part of their police power. The issue is whether entering into an unbreakable financial obligation violates that rule. The State is arguing that if the pension clause is absolute, it violates the federal Supremacy Clause.
- Norseman - Monday, Mar 9, 15 @ 11:45 am:
=== An external catastrophe such as World War II or the Great Depression of 1929 might warrant invoking police powers but we have no such situation in Illinois. ===
These two excerpts from one of the plaintiffs briefs to the Illinois Supreme Court address the subject.
“The delegates who supported the Clause recalled that ‘civil service employees who retired never had their pension altered or amended, even during those trying times during the days of the Depression,’ and explained that the Clause was intended to protect pensioners ‘irrespective of the financial condition of a municipality or even the state government.’ Record of Proceedings, Sixth Illinois Constitutional Convention, Verbatim “Transcripts (July 21, 1970) (’Record of Proceedings’), at 2926 (SA 7) (remarks of Delegate Kemp).” (BRIEF OF ISEA, RSEA, HEATON AND HARRISON PLAINTIFFS-APPELLEES, P. 3)
“People ex rel. Lyle v. City of Chicago, 360 Ill 25, 29( 1935)( ‘Neither the Legislature nor any executive or judicial officer may disregard the provisions of the Constitution even in case of a great emergency’). As the appellate court explained in People ex rel. Northrup v. City Council of City of Chicago, 308 Ill. App. 284, 289 (1941), ‘an emergency cannot be created by the facts and used as a means of construction of a constitutional provision which has made no reference to any emergency by its terms.’ As demonstrated by Lyle and Northrup, this principle was consistently applied by Illinois courts even during the Great Depression.” (BRIEF OF ISEA, RSEA, HEATON AND HARRISON PLAINTIFFS-APPELLEES, P. 35)
- john doe - Monday, Mar 9, 15 @ 11:47 am:
Since when are insults and profanity acceptable here(”bite me”)?
- Arthur Andersen - Monday, Mar 9, 15 @ 11:54 am:
My irony meter hits the peg when I hear Elaine Nekritz carrying water for Ty Fahner.
- Rusty618 - Monday, Mar 9, 15 @ 11:54 am:
@Robert =why wouldn’t everyone set aside 4% and retire at 55 with 80%? =
Those who put in 4% have to work 44.7 years to get 75%, the maximum. I doubt any of these folks starting working for the state at 10 years of age.
- Anonrnug - Monday, Mar 9, 15 @ 11:58 am:
R Nug at 11:03. Actually, the silence on any IL case won on police powers was from counsel for the AG. The courtroom visitors snickered and a few laughed out loud.
- LIberty - Monday, Mar 9, 15 @ 11:59 am:
Here is a link to a summary of the other plaintiff’s brief: http://www.appellatestrategist.com/wp-content/uploads/sites/498/2015/02/Brief-of-ISEA-RSEA-Heaton-and-Harrison-Plaintiffs.pdf
and a link to a summary which summarizes the argument well.
http://www.jdsupra.com/legalnews/the-illinois-pension-plaintiffs-brief-66292/
- anon - Monday, Mar 9, 15 @ 12:00 pm:
Since I highly doubt the justices on the Illinois Supreme Court consult the editorial boards of newspapers for statutory construction, this campaign serves only as another excuse to demonize and flog public employees.
- Carl Nyberg - Monday, Mar 9, 15 @ 12:04 pm:
By the way, are the laws against beheading bankers, hedge fund managers, 1%ers, politicians and their PR flacks in corporate media absolute?
Or do they become optional in an “emergency”?
- tominchicago - Monday, Mar 9, 15 @ 12:04 pm:
It’s cute that these local newspaper editors think that their interpretation of the Illinois Constitution somehow matters. In the end, it is the opinion of 4 members of the Illinois Supreme Court that matters. My guess is that they will interpret the protection granted as being absolute. It seems that their opinion in the healthcare case has already foretells the outcome of the pension case.
- Norseman - Monday, Mar 9, 15 @ 12:08 pm:
=== The US Supreme Court has held that states lack the ability to permanently give away any part of their police power. The issue is whether entering into an unbreakable financial obligation violates that rule. The State is arguing that if the pension clause is absolute, it violates the federal Supremacy Clause. ===
Yes, that is the State’s argument. Following is an excerpt from the plaintiffs brief that addresses that argument.
“The defendants’ reserved powers argument confuses contracts and statutes with constitutions. The reserved powers doctrine addresses the surrender of sovereign powers by contract or statute. See, e.g., U.S. Trust Co. of New York, 431 U.S. at 23-24. This Court, however, is being asked to interpret a constitutional provision. There is no reserved power exception to the specific limits which a state’s constitution places on that state’s legislature. See, e.g., O’Brien, 219 III. 2d at 100 (’the General Assembly cannot enact legislation that conflicts with specific provisions of the constitution’); Flushing Natl. Bank v. Municipal Assistance Corp. for City of N.Y., 40 N.Y.2d 731, 740 (N.Y. 1976) (’the police power which may override statutes is not a higher law which transcends Constitutions as well’).” (BRIEF OF ISEA, RSEA, HEATON AND HARRISON PLAINTIFFS-APPELLEES, Pages. 39 and 40)
Go read the whole brief by going to: http://www.state.il.us/court/SupremeCourt/SpecialMatters/2015/118585_AEB_021715.pdf
It’s excellent and completely blows the state’s argument out of the water.
- Anonymous - Monday, Mar 9, 15 @ 12:10 pm:
kcgenkins. This seems backwards. Shouldn’t the state be arguing the pension clause “is” absolute and above police powers that way they have a federal case to invalidate the whole pension clause?
- VanillaMan - Monday, Mar 9, 15 @ 12:16 pm:
The Illinois Constitution ought not to be an economic suicide pact.
Politics doesn’t trump constitutions. If it did, then every time we switch parties in power, we threw out contracts, obligations and rights. In the old days a president, governor or mayor threw everyone out of office and installed whoever they wanted. Since 1881, we’ve began ensuring that citizens can work for their governments.
Politics can’t claim an emergency when none exists. The State has to pay what it owes Illinoisans who performed work and have earned their pensions. Every month, the State took out money from thousands of paychecks and put it into funds. Every month, state workers paid into a contractually defined state system. The failure is with the State, not the citizens. The State manufactured this crisis for political reasons.
Allowing an administration to violate our constitution for political reasons because it claims it can’t meet its contractual obligations is ridiculous.
Rauner is sworn to follow our constitution as a governor. He can’t just suspend it when he wants. He can’t just balance his budget on its suspension. He is not allowed to profit from an unconstitutional move which denies citizens of their earned pensions.
- walker - Monday, Mar 9, 15 @ 12:17 pm:
We’ll know soon enough
- kcjenkins - Monday, Mar 9, 15 @ 12:18 pm:
Anonymous - They’re arguing (1) the pension clause was never intended to be absolute; and (2) if that IS what was intended, then the pension clause violates the Federal constitution.
- Secret Square - Monday, Mar 9, 15 @ 12:21 pm:
Unless Rauner and Co. have been living under rocks for the past several years, they HAVE to be aware that the Supreme Court is likely to uphold the pensions. Therefore, I believe that everything they are doing is, basically, just setting the stage for the moment when they are ready to say, “Well, folks, we tried everything we could to cut the budget and hold down costs, but now we really have no choice but to raise taxes.”
- Steve - Monday, Mar 9, 15 @ 12:22 pm:
Those who want the status quo on public pension do have a strong argument: why should the pension clause be the poor first cousin of other clauses in the Illinois state constitution? That’s why there’s nothing preventing Madigan and Cullerton from amending the constitution if they feel so strongly about the issue. No one said it was easy, constitutional changes aren’t supposed to be easy. But, certainly Madigan and Cullerton do have some sway with their caucus. Anyway, I wouldn’t be surprised if the Illinois Supreme Court puts the issue right back in Madigan and Cullerton’s court where it belongs.
- Anon - Monday, Mar 9, 15 @ 12:31 pm:
Put aside constitutional arguments and let’s talk hard dollars and real money solutions, shall we? . Ralph Martire at citizens for tax and budget accountability (Ctba) has provided a new 50 year flat funding plan for the $100 billion unfunded liability. Just like a fixed rate 30 year mortgage, the cost of the monthly payment (yearly pension contribution by the state) becomes a lower percentage of income as years go by as income rises while the payment is flat. The civic committee and Trib will argue the total cost but do you figure the total cost of your home loan? Heck no. You figure the loan and monthly payment and go live in your house. And solves the problem ofprotecting pensions. At 90%, which is ok, with no major disruptions in state finances. Will rauner and corporate CEOs accept this or are their real goal just to cut costs
- AnonymousOne - Monday, Mar 9, 15 @ 12:44 pm:
Police powers when we just rolled back the state income tax rate? Farce. If you cannot open up the absolute constitution to revise our flat tax to a progressive tax because THE CONSTITUTION SAYS!, then why does the Constitution not matter in the matter of state pensions? If the pension contract does not matter, then contracts with bondholders and everyone else don’t matter either. See? Open up one door and all kinds of stuff can fly right in afterwards.
- Smitty Irving - Monday, Mar 9, 15 @ 12:44 pm:
When reading Editorialists (particularly Tribbies, SJR, and ex-SJRers at Reboot Iliinois), you’re reading the writings of a group of people working for management that drove their companies off a cliff. Of particular note is Sam Zell bankrupting the Tribune … after making in a non-unionized employee retirement plan that was bankrupted. Zell’s remark about journalists thinking they “do God’s work” didn’t help. Keep that in mind when reading.
- Smitty Irving - Monday, Mar 9, 15 @ 12:48 pm:
Steve - IMRF proves you’re incorrect. And they fund law enforcement pensions.
- lakecounty - Monday, Mar 9, 15 @ 12:52 pm:
- ZC - Monday, Mar 9, 15 @ 10:07 am:
Note:
I’m not sure many want to reopen the Illinois constitution, as then there could be a very successful movement to have a graduated income tax in addition to other changes.
- ZC - Monday, Mar 9, 15 @ 12:54 pm:
VanillaMan,
I get your position but the question I always ask, as a follow-up: do you believe that the state of Illinois currently is in violation of the Constitution, in terms of the percentage of K-12 spending currently spent by Springfield?
Article X, Section I: “the State has the primary responsibility for financing the system of public education.”
Or in this case, is that just vague language you can in effect safely ignore - “primary” in effect means, “whatever the state of IL feels like spending” - ?
- Original Rambler - Monday, Mar 9, 15 @ 12:55 pm:
Pelonski @ 10:13 nails it. If the fiscal condition is so dire, fine cut the pensions. But then everybody gets a haircut.
- anon. - Monday, Mar 9, 15 @ 1:01 pm:
ZC - local schools just need to reduce their local spending so the State contribution is 50%.
- Joe Spivey - Monday, Mar 9, 15 @ 1:32 pm:
I will be happy to have my pension reduced, just as soon as you can convince my banker to accept reduced payments on my mortgage payment, just as soon as you can get the feds to agree to accept a reduction of the taxes i owe…..
- worn out - Monday, Mar 9, 15 @ 1:50 pm:
I am not adding to or detracting from my opinion on Rauner’s position with the pension just yet. He didn’t make his first billion by being stupid. Maybe he is as just as good a chess player with the legislators as Madigan is made out to be. The State Employees union contract is being negotiated, the budget is a mess and Rauner is riding the wave of public sentiment from the election. I think he knows he is going to lose the pension battle initially and planned on it, and is depending on the legislators to hammer it out while he positions himself for his next pawn move.
- facts are stubborn things - Monday, Mar 9, 15 @ 1:57 pm:
if the pension clause doesn’t stop SB1 then what the hell good is it?
- Norseman - Monday, Mar 9, 15 @ 1:57 pm:
For an amusing read, go to the following link regarding a late minute request to submit an Amicus brief:
http://www.state.il.us/court/SupremeCourt/SpecialMatters/2015/118585_MOT14.pdf
The requester claims to represent the people. The following quote gives you the tenor of the request.
“And the bankruptcy solution I propound offers a ‘third way’ between government’s temptation to hope that it can pick winners and losers and do practically anything it wants, and labor’s temptation to hope that pensions (with a Pensions Clause) are sacrosanct and can never be defeated nohow.”
- Careful what you wish for... - Monday, Mar 9, 15 @ 1:58 pm:
If the “absolute” stance against modifying these plans for benefits earned in the future is adopted by the courts, I personally believe this will lead to the re-amendment of the state constitution. It may be years away, but it’s the inevitable conclusion of that line of thinking. People are willing to honor the states obligations, right up to the point where they will have to open their own wallet to do so.
- facts are stubborn things - Monday, Mar 9, 15 @ 2:02 pm:
@ Norseman - Monday, Mar 9, 15 @ 1:57 pm:
“amusing”– that is kind of you.
- Matt Dietrich - Monday, Mar 9, 15 @ 2:04 pm:
@Smitty Irving: Please feel free to call me out by name in future posts. I must clarify two points, however: (1) I stopped working for SJ-R management when I left the SJ-R; (2) We prefer the conventional spelling of Illinois in my current workplace.
- Obamas Puppy - Monday, Mar 9, 15 @ 2:07 pm:
A shocking revelation that the newspapers have lined up in opposition to the lower courts opinion. Now that they have I think it has a better chance of prevailing given their dismal track record.
- Ghost - Monday, Mar 9, 15 @ 2:16 pm:
I am back on our constitution provides a vehicle for altering it or changing it. I agtrr its not absolute, since it can be changed. BUT this is not a constitutional change. They are ignoring the process for removing or changing the constitution by trying to donit with legislation. If the constitution can be changed legislatively, that renders the provisins for ammending or changeing the constitution moot.
On a side note, under this argument thebstate could just mot pay every one of its creditors. That would wipe out the unpaid bills overnight. Fiscal emgerency and all that.
But if the supremer court allows this theory, then the general assembly can use that court case to come afyer the judges pay and retirments next. There is mo legal distinction between the judicial pensions, salaries and protections and those they are trying to take away. Just the general assembly chosing, for now, not to include them.
First they came for the Union bosses, and I did not speak out—
Because I was not a “union boss”.
Then they came for the state worker pensions, and I did not speak out—
Because I was not a state worker.
Then they came for the Programs that benefit the poor, and I did not speak out—
Because I was not poor.
Then they came for the judicial pensions and there was no one nor precedence left to protect them.
- Joe M - Monday, Mar 9, 15 @ 2:43 pm:
The police powers emergency is that many Illinois taxpayers want to continue to have one of the lowest tax rates among the 41 states that have state income taxes.
When Illinois’ tax rate has been equal to either Iowa’s top rate of 8.98% - or Wisconsin’s of 7.75% - or Missouri and Kentucky’s 6% - or Minnesota’s 9.85% - or even Michigan’s 4.25% for a number of years and Illinois still can’t pay its bills, then I’d say we have a police state emergency. And at that point,the State should also be talking about also reneging on bond holders and vendors.
- Anonymous - Monday, Mar 9, 15 @ 2:44 pm:
Has anyone gone back to read the debate when they instituted the 3% AAI? Did the GA acknowledge there was a funding problem and proceeded anyway. If so, seems like a manufactured crisis.
- Anonymous - Monday, Mar 9, 15 @ 2:48 pm:
Several people have talked about contracts not being absolute. Could they give some examples. I thought cancelling a contract required negotiation, with the party that wishes to cancel the contract, offering considerations. Those are the only types of cancelled contracts I have heard of. Perhaps someone can point to other contract situations where contracts have been outright cancelled without considerations.
- facts are stubborn things - Monday, Mar 9, 15 @ 2:57 pm:
I think the key question for the ISC is, “if the pension clause of the constitution does not protect pensions from SB 1, what is it for?” Is it to protect pensions from a bad mean government and not a good nice government that only wants to have more money for other programs. Is it to protect pensions only when times are good? Let’s see, the state has not funded the pensions (the court did not require them to fund it) and created a large debt. The bill is coming due and the state would like to not have to pay that debt back — seems reasonable to me. snark
- RNUG - Monday, Mar 9, 15 @ 3:16 pm:
== Has anyone gone back to read the debate when they instituted the 3% AAI? Did the GA acknowledge there was a funding problem and proceeded anyway. If so, seems like a manufactured crisis. ==
If my memory is working today, initially the 35 AAI was won in a SERS contract negotiation, then enacted by the General Assembly as part of the pension system.
The 3% AAI was later extended at different times to the other four systems by the General Assembly using the initial model but required a specific percentage contribution by the employee (0.5% for TRS / SURS members or 1.0% for JRS / GARS members). I don’t remember reading how those percentages were arrived at but I would assume the amounts were based on projections by various analysts. So for a lot of state retirees, the AAI is a purchased / funded benefit.
- I B Strapped - Monday, Mar 9, 15 @ 3:18 pm:
Of all the comments I’ve read facts are stubborn things just made the point I was thinking about.
I think it was in the 1970’s (RNUG probably has the date) the state was sued in an attempt to force it to fairly and properly fund the pension funds. The courts said in essence, ‘We won’t force the state to properly fund public pensions but the pensions MUST be paid when earned/due. So, if the state can’t be forced to properly fund public pensions and the ruling now is the state, under Emergency Police Powers standard can’t be forced to fully pay what has been earned, it appears to me a legalized theft will have been sanctioned.
- RNUG - Monday, Mar 9, 15 @ 3:23 pm:
== where contracts have been outright cancelled without considerations ==
As far as the State goes, in most of their contracts there used to be standard boilerplate fine print that said purchase / lease was subject to appropriation. I know you would find that in items that were big enough to have their own specific lines in the budget that the General Assembly could choose to zero out. In my small corner of the state in 30+ years, I only saw that “non-funding” clause invoked once.
- RNUG - Monday, Mar 9, 15 @ 3:29 pm:
- I B Strapped -
The first time after the 1970 Constitution was People Ex Rel. IFT v. Lindberg (1975). In other words, the teachers union suing the Comptroller to compel the pension fund payment after it was cut.
The concluding words of that decision:
“Plaintiffs have asserted that the respective pension systems are inadequately funded. The question of the specific fiscal appropriations necessary to meet these deficiencies is one which, at this time, should be directed to the legislature.”
- Mama - Monday, Mar 9, 15 @ 4:57 pm:
++Tune in 2:30 on Wednesday at the Illinois Supreme Court web site where they will be live streaming. ++
Hello… where can one ‘tune in’? Please share the “Illinois Supreme Court web site address. Thank you The Blue Room site does not work for me. I have tried it numerous times with no luck.
- I B Strapped - Monday, Mar 9, 15 @ 5:01 pm:
Thanks RNUG…
- Weltschmerz - Monday, Mar 9, 15 @ 6:09 pm:
Another thanks to RNUG. You save me reading through the morass of “What ifs and If theys”.
- RNUG - Monday, Mar 9, 15 @ 7:38 pm:
- Anonrnug -
Yes, your statement is a bit more accurate. The state was silent; everyone else was amused. It was a pretty telling moment in terms of trying to defend the use of police powers.
I’m pretty sure Judge Belz thoughts were something like:
“You’re asking me to create new law here with no precedent? Judge Nardulli got his hand slapped in Kanerva when he tried it … ain’t going to happen here! Try your luck with the IL SC.”
- IRT - Tuesday, Mar 10, 15 @ 12:56 am:
If the IL SC rules in favor of SB1 what good does it do to have a Constitution? The next generation won’t have anything to believe in and then we will have “trouble”.
- IRT - Tuesday, Mar 10, 15 @ 1:05 am:
How many times has the GA use the constitution to get what they wanted by claiming an action by the Governor or past Governor “unconstitutional”?
- Anonymous - Tuesday, Mar 10, 15 @ 6:21 am:
Simple test on if pensions have been diminished or impaired… Is the legislation projected to reduce the unfunded liability?
- Michael Spaargaren - Tuesday, Mar 10, 15 @ 6:27 am:
I guess the key word is “Enforceable”. That kind of says it all if you ask me.
- Petersod713 - Tuesday, Mar 10, 15 @ 6:43 am:
Trachers don’t pay into social security. This pension is our social security and we pay 10% of our paycheck into it every year. The pension problem is not caused by the dollar amount of payouts or that the state can’t fund it, it’s that the state politicians don’t WANT to fund it. They never have. They’re using the money for their own projects or any other way that makes them look good. Think about it. How magnificent is a $2B payment into a pension fund? Bo-ring. But using that money instead to pay for a new fancy overpass? Sure. Anything to make them look good.
How can other, much smaller states have a 100% funded pension system? It’s choices, people, plain and simple. The money is there. Stop buying the rhetoric.
D.C. from Chicago
20 year teacher in the northern burbs
- Blackacre - Tuesday, Mar 10, 15 @ 7:55 am:
Whether or not the clause is “absolute” misses the point — the clause only makes a pension a contract. Contracts are not absolute. Contracts can be, and do get, invalidated by courts. Some common reasons: the contract was based on a mutual mistake of fact; the contract was procured by fraud or duress; one or both parties lacked the capacity to understand what they were agreeing to; the contract is a product of undue influence, or grossly unequal bargaining power, or nondisclosed conflict of interest; the contract offends public policy, or poses a societal danger.
- facts are stubborn things - Tuesday, Mar 10, 15 @ 10:22 am:
@ Blackacre - Tuesday, Mar 10, 15 @ 7:55 am:
= Blackacre - Tuesday, Mar 10, 15 @ 7:55 am:
Whether or not the clause is “absolute” misses the point — the clause only makes a pension a contract.=
Pensions are a contract, but also a contract that can not be diminished or impaired. The continuation of the sentence to include the words “diminish and impair” is critical.
Please keep in mind the following —
While the State is not
held to a specific funding schedule, it is ultimately responsible for funding the State
pension systems so that pensioners’ benefits are not diminished or impaired. if the State were allowed to fund the pension systems at
almost any level of its choosing and enjoyed a power to diminish pension benefits—then
the Pension Protection Clause would be meaningless.
The above is from Plaintiffs ISC brief.
To accept the states argument is absurd. The state can underfund the pension system and then claim they must reduce benefits. If this is so then the pension clause has no meaning and would be worthless.