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AG Madigan cites legal precedent in response to Rauner promise

Monday, Jun 29, 2015

* Press release…

ATTORNEY GENERAL MADIGAN PROVIDES CONSTITUTIONAL OFFICERS, LEGISLATIVE LEADERS INFORMATION TO PREPARE FOR BUDGET IMPASSE

Chicago – Attorney General Lisa Madigan today issued an overview of information her office has provided to Illinois’ constitutional officers and legislative leaders to help prepare for the possibility that a State budget will not be in place for the new fiscal year. Attorney General Madigan issued this guidance in an effort to make sure that all offices and agencies have a legally supported plan in place to ensure that the State provides services critical to the people of Illinois in spite of the budget impasse.

The State’s new fiscal year starts July 1, 2015. If a budget is not in place on July 1, the Illinois Constitution and State statutes severely constrain the State’s authority to make payments to fund operations and services. While there are limited payments that the Comptroller is authorized to make in the absence of a budget, Illinois law is clear that the State cannot continue to fund all government operations and services in the absence of a budget passed by the legislature and signed into law by the Governor.

As background on this issue, the Appropriations Clause of the Illinois Constitution provides that “The General Assembly by law shall make appropriations for all expenditures of public funds by the State.” Ill. Const. art. VIII, § 2(b). In keeping with that constitutional provision, the State Comptroller Act prohibits the Comptroller from paying vouchers that are not “pursuant to law and authorized.” 15 ILCS 405 /9(b) (2012). Additionally, the Finance Article of the Illinois Constitution provides the “The State . . . shall incur obligations for payment or make payments from public funds only as authorized by law or ordinance.” Ill. Const. art. VIII, § 1(b) (emphasis added).

The Illinois Appellate Court has specifically addressed the issue of whether the State can pay employees in the absence of a budget. During the budget impasse in 1991, a number of State employee unions sued the Comptroller and asked the court to issue an order compelling the Comptroller to issue paychecks due on July 15. In AFSCME v. Netsch, 216 III. App. 3d 566, 568 (4th Dist. 1991), the court held that the Comptroller could not pay State employees in the absence of an appropriation and “any attempt by the comptroller to issue the funds in the absence of an appropriation bill signed into law by the governor would create obvious problems under the separation-of-powers doctrine.” The Netsch court determined that an appropriation was necessary “to prevent government operations from being brought to a complete stop.” Id. at 568-69 (citing People ex rel. Kirk v. Lindberg, 59 III. 2d 38, 42-43 (1974)).

As the Netsch court clearly stated, the Illinois Constitution and statutes prevent the Comptroller from continuing to pay expenditures, including the State’s payroll, without a budget, and even a court cannot order all of these payments to be made. In requiring a budget before the State can expend money, with limited exceptions, Illinois law is similar to federal law and the law of other states. That is why the federal government and numerous states have faced shutdowns over the years when budgets have not been implemented.

The State has experienced budget impasses in two recent years – 2007 and 2009. In 2007, after the legislature and the Governor enacted a one-month budget, the State began August without a budget in place. In early August, while the legislature was meeting to consider a budget, AFSCME sued the State, asking a court to order the Comptroller to issue paychecks. The arguments in that case focused on whether the State was prepared to comply with the federal Fair Labor Standards Act (FLSA), which mandates that employees who are covered by that law must be paid the federal minimum wage on the date that their regular paychecks are due or the State will be liable for damages and interest. Because federal law takes precedence over the Illinois Constitution, the State is required to comply with the FLSA, even in the absence of a budget. At the time that AFSCME sued in 2007, State agencies and offices were not prepared to pay a FLSA-compliant payroll in time to meet with August payroll deadlines.

The court’s order thus allowed the State to pay the full payroll only to the extent it was not feasible to pay a payroll limited to FLSA compliance. In doing so, the court made clear that the order did not establish any precedent for such an order in the future. No Illinois court has ever entered an order authorizing full payment of the State’s payroll in a situation where compliance with the FLSA was feasible and no budget was in place.

The only other recent example occurred in 2009, when the State did not have a budget in place in mid-July. AFSCME sued on July 14, 2009, seeking a court order to compel the Comptroller to issue paychecks. The Attorney General’s Office opposed that suit based on the clear requirements of the Illinois Constitution. On July 15, 2009, prior to the resolution of that suit and another suit by the Fraternal Order of Police, the legislature passed a budget.

Based on the Illinois Constitution, and consistent with previous litigation, the Attorney General has provided the constitutional officers with an overview of the application of the FLSA, so that State offices and agencies can be prepared to comply with that law in time for the payroll deadlines in mid-July. A copy of that guidance is attached.

Additionally, to ensure that all State offices and agencies are prepared, if necessary, to continue providing essential or core government services, the Attorney General also provided the constitutional officers with an overview of the process for identifying essential personnel and services. The Attorney General’s Office has indicated it will work with the respective constitutional offices to ensure that their essential government functions and personnel are appropriately identified and maintained in the interest of the health, safety and welfare of the people of Illinois. A copy of that overview is also attached.

Emphasis added.

* Additional materials provided by the AG…

* Guidance to Determine Essential Employees

* Determinations of Nonexempt and Exempt Employees in the Fair Labor Standards Act

- Posted by Rich Miller        

61 Comments
  1. - Abe the Babe - Monday, Jun 29, 15 @ 3:22 pm:

    Room, meet adult


  2. - How Ironic - Monday, Jun 29, 15 @ 3:26 pm:

    I thought Rauner never loses….


  3. - MrJM - Monday, Jun 29, 15 @ 3:26 pm:

    Well, that didn’t last long…

    – MrJM


  4. - Oswego Willy - Monday, Jun 29, 15 @ 3:28 pm:

    Kass and @TribTowerChick will say;

    “Those Madigans!”


  5. - How Ironic - Monday, Jun 29, 15 @ 3:28 pm:

    Maybe Rauners going to bankroll the payroll? /s


  6. - old-pol - Monday, Jun 29, 15 @ 3:28 pm:

    Your title should read: AG … cites “no” legal precedent “exists” in response to Rauner promise.


  7. - thunderspirit - Monday, Jun 29, 15 @ 3:30 pm:

    I have no idea who gave Governor Rauner the impression he could simply direct Comptroller Munger to issue paychecks in absence of a signed budget, but whomever suggested the Governor’s office had such an authority should, perhaps, have read the Illinois Constitution.


  8. - Anonymous - Monday, Jun 29, 15 @ 3:33 pm:

    When 2 or more giants fight, all of the little people get stepped on.
    Not sure how this would play out in the judicial courts, but in the court of public opinion, this situation stinks.


  9. - Mama - Monday, Jun 29, 15 @ 3:33 pm:

    What can the unions do to solve this issue?


  10. - West Side the Best Side - Monday, Jun 29, 15 @ 3:34 pm:

    No one read the Illinois Constitution and case law then the pension bill was passed, why should we think anyone would do that now.


  11. - Me too - Monday, Jun 29, 15 @ 3:35 pm:

    Great. Just what he always wanted… Everyone working for minimum wage.


  12. - Apocalypse Now - Monday, Jun 29, 15 @ 3:35 pm:

    =whomever suggested the Governor’s office had such an authority should, perhaps, have read the Illinois Constitution. =
    Would like a constitutional directive from Attorney General Madigan concerning passing budget that isn’t balanced to the Governor.


  13. - Huh? - Monday, Jun 29, 15 @ 3:35 pm:

    That left a mark.

    Mama - Cannons if you please.


  14. - Wensicia - Monday, Jun 29, 15 @ 3:36 pm:

    Check. Your move, Rauner.


  15. - Anonin' - Monday, Jun 29, 15 @ 3:36 pm:

    Oh oh…TeamBungle gets busted while THE comptroller is up snackin with the Trumpster…not a great start to this week and only 3:30….Oh yeah the Bobblehead has a big position on PR bonds …opps


  16. - Huh? - Monday, Jun 29, 15 @ 3:37 pm:

    That should be Honeybear - Cannons if you please.


  17. - Formerly Known As... - Monday, Jun 29, 15 @ 3:37 pm:

    ==Illinois law is clear==

    Illinois law was clear on the marriage laws she declined to enforce or defend.

    Illinois law was also clear on the pension theft law she declined to speak up against.


  18. - AC - Monday, Jun 29, 15 @ 3:37 pm:

    At least that Rauner tried to pay his folks, gotta give him credit for tryin’, unlike those no good Madigan people who don’t care about nothin’ or nobody! At least, that’s how Rauner hopes its percieved.


  19. - nobody - Monday, Jun 29, 15 @ 3:39 pm:

    ===I have no idea who gave Governor Rauner the impression he could simply direct Comptroller Munger to issue paychecks in absence of a signed budget, but whomever suggested the Governor’s office had such an authority should, perhaps, have read the Illinois Constitution. ===

    some of the gov’s attys brought this up in mtgs and the hired guns from out of state dismissed the concern


  20. - Anonymous - Monday, Jun 29, 15 @ 3:40 pm:

    it’s funny that L Madigan is johnny on the spot when it comes time to issue opinions on Rauner’s proposals but couldn’t be found to issue one on the pension law…

    that’s from someone who wants to see the Rauner agenda completely destroyed

    just saying


  21. - Wordslinger - Monday, Jun 29, 15 @ 3:40 pm:

    Not to worry, the governor will fight day and night to get the money to his BFFs, those overpaid featherbeddin’ state employees so they can keep on a-wastin, a-fraudin and a-busin’.


  22. - RNUG - Monday, Jun 29, 15 @ 3:43 pm:

    == why should we think anyone would do that now. ==

    Well … Rauner made his money in the gray areas and cracks of the bankruptcy laws, so he (or at least his legal team) must have read and understood them. They apparently didn’t do their due diligence / didn’t read the 1970 Illinois Constitution.


  23. - Anonymous - Monday, Jun 29, 15 @ 3:44 pm:

    “- West Side the Best Side - Monday, Jun 29, 15 @ 3:34 pm:

    No one read the Illinois Constitution and case law then the pension bill was passed, why should we think anyone would do that now.”

    I agree with you. They go against the constitution all the time and then use it only when they want.

    Personally, I think that the constitution should always be followed both Federally and by the States but that is not what we have anymore so we have lawlessness in this country.

    Lawlessness is not good. I do want my wife to get paid, she is a State Employee. We can only live on my paycheck for so long, I am in the private sector.

    However, if they lower her vacation, she will look for work in the private sector and this isn’t making her want to stay with the State any more.

    There is something wrong with our State when my wife calls me crying almost every day at her lunchtime.

    State employees deserve better.

    They should be treated fairly. Don’t tSke away their vacation time, with her job, she needs it.


  24. - AC - Monday, Jun 29, 15 @ 3:45 pm:

    “That is why the federal government and numerous states have faced shutdowns over the years when budgets have not been implemented.”

    The question becomes, is it even legal to keep the lights on? Without implementation of a shutdown, the state continues to consume services, that it owes money for, but cannot pay. I fail to see a significant legal difference between consuming services in a given fiscal year, and payment for those services.


  25. - KurtInSpringfield - Monday, Jun 29, 15 @ 3:45 pm:

    Paychecks for my agency are issued on the 13th and the 28th. The check issued on the 13th is for the pay period of the 16th day to the end of the previous month. Therefore, the July 13th paycheck I am supposed to receive is for the pay period ending June 30th. The pay period is still in the prior fiscal year. As I understand the money to issue paychecks for the last pay period of the fiscal year is in FY 2015 budget.


  26. - Centennial - Monday, Jun 29, 15 @ 3:48 pm:

    @Anonymous 3:44
    Sorry your wife is having such a tough time. Truly. No snark. State Employees deserve better than this.


  27. - Rich Miller - Monday, Jun 29, 15 @ 3:49 pm:

    ===the state continues to consume services, that it owes money for, but cannot pay===

    That’s not been an unusual event over the past several years, particularly pre tax hike and post tax cut.


  28. - walker - Monday, Jun 29, 15 @ 3:50 pm:

    Just doin’ her job.

    Likely scenario: tied up in court starting with AFSCME, AG jumps in against both Rauner and AFSCME, court order to pay the bulk of covered employees while case is pending, budget agreement makes it all moot.

    Cannot see this lifeboat floating for more than two or three weeks.


  29. - Austin Blvd - Monday, Jun 29, 15 @ 3:52 pm:

    Dear Gov. Rauner,
    When you see a fork in the road, you can’t take it.
    Very Truly Yours,
    The Illinois Constitution


  30. - Demoralized - Monday, Jun 29, 15 @ 3:53 pm:

    ==the state continues to consume services, that it owes money for, but cannot pay==

    Vendors provide services to the state at their own peril during these periods. They know they will likely be paid, albeit sometime later. That’s why a lot of vendors continue to provide services. The state isn’t obligated to stop accepting services.


  31. - Blah - Monday, Jun 29, 15 @ 4:01 pm:

    I think a very important point is being missed - the Attorney General gave this information to the Governor before he issued his statement. He knew in advance there was no legal authority to do this.


  32. - AC - Monday, Jun 29, 15 @ 4:02 pm:

    Point taken, in light of recent, and not so recent history, it’s difficult to differentiate between this situation, and others where the state received services but lacked the funds to pay for those services.


  33. - Just Saying .... - Monday, Jun 29, 15 @ 4:03 pm:

    I’m not seeing an opinion here, just stating the law and case law history. Rich, can you post the payroll dates from the Comptroller’s Office to see who it impacts first.


  34. - Norseman - Monday, Jun 29, 15 @ 4:03 pm:

    Well written and explains past precedents. So the take from this is that the folks can get paid at the rate of the Fed minimum wage, but full paycheck is a NO. Better than nothing. Off to the bank for a loan to cover the big bills.


  35. - IllinoisBoi - Monday, Jun 29, 15 @ 4:08 pm:

    Thus spake Anonymous - Monday, Jun 29, 15 @ 3:33 pm:

    ==When 2 or more giants fight, all of the little people get stepped on.==

    That’s for sure. Godzilla and Mothra are battling it out and the people of Illinois are like the citizens of Tokyo.


  36. - The Dude Abides - Monday, Jun 29, 15 @ 4:11 pm:

    Clever PR move by the Rauner people, they are trying to make the Governor look like the good guy here, fightin for the State workers and someone named Madigan preventing him from doing so. I think the Rauner people are aware that they can’t legally pay the workers without a budget. They just want the workers to get mad at someone not named Rauner for a change.


  37. - Mouthy - Monday, Jun 29, 15 @ 4:13 pm:

    - Austin Blvd - Monday, Jun 29, 15 @ 3:52 pm:

    You should have apologized to Yogi Berra for mangling his quote..


  38. - veritas - Monday, Jun 29, 15 @ 4:16 pm:

    Guessing Walker is spot on - just not sure who will issue that court order.


  39. - Wordslinger - Monday, Jun 29, 15 @ 4:17 pm:

    I don’t think any governor can sell “I’m helpless to do anything” or should want to.
    .
    Geez, that’s a heckuva message six months in.


  40. - Ferris Wheel - Monday, Jun 29, 15 @ 4:23 pm:

    It’s also important to note that regardless of whether a budget gets passed tomorrow, state employees will still be required to work on July 1. For most of us, the next payroll should come through as it will be a payment through the end of June. But in the doomsday scenario where a budget is still not in place come the 16th, we will essentially be working for free. Yes, of course, there will eventually be back pay. But in the short term that could cause an immediate crisis for those of us not milking the government for all it’s worth. For example, employees may have trouble paying for the CTA pass to get to work, child care, I don’t know, buying food…

    If we weren’t required to work, then we could stay at home with the children, or take short term cash paying jobs like babysitting or day laboring in order to cushion the funds crash.

    It’s not going to be pretty either way, and yes eventually it will more or less get worked out, but a lot more is at stake than the reputations of the respective players.


  41. - Anyone Remember - Monday, Jun 29, 15 @ 4:25 pm:

    Just Saying …. -
    This link from IOC sets forth the pay schedules.
    http://www.ioc.state.il.us/index.cfm/resources/general-resources/2015-pay-schedule/


  42. - Soccermom - Monday, Jun 29, 15 @ 4:26 pm:

    Gosh, I still remember that July 15 2009 thing so clearly. What a night.


  43. - Stones - Monday, Jun 29, 15 @ 4:28 pm:

    I love Rauner’s characterization that he will resist any attempts to not pay workers for their services when his own Comptroller clearly indicates that she cannot pay without a budget. He says he can take the heat but his actions don’t support that claim.


  44. - Wensicia - Monday, Jun 29, 15 @ 4:30 pm:

    ==Clever PR move by the Rauner people==

    Really?, That’s all Rauner has done so far, govern through PR. In the meantime, his every action, order, ultimatum has been shot down by the courts, AG, Comptroller, and GA, sometimes even his own people. He’s not the CEO of Illinois. Until he recognizes this fact, he will not be able to effectively govern.


  45. - Honeybear - Monday, Jun 29, 15 @ 4:31 pm:

    As requested by Huh

    MRS. MADIGAN! CHAIN SHOT IF YOU PLEASE!

    (chain shot is to disable sails and rigging thus to effect maneuvering of the ship)


  46. - Rod - Monday, Jun 29, 15 @ 4:33 pm:

    Everything the AG wrote would have been known by Governor Rauner’s lawyers. His memo to State employees was just absurd indicating “all” state employees could be paid during a shutdown. What is going on over in the Governor’s office meetings of the true believers or staff giving reasonable and rational advise to the Governor?


  47. - Anyone Remember - Monday, Jun 29, 15 @ 4:44 pm:

    Rod -
    Under the Federal Fair Labor Standards Act, employees DO get paid. The unresolved question is “How much - total or minimum wage?”


  48. - Sir Reel - Monday, Jun 29, 15 @ 4:48 pm:

    Rauner and his crew think the Illinois constitution is so 1970.

    They’re operating in the 21st century for Pete’s sake.


  49. - Demoralized - Monday, Jun 29, 15 @ 4:58 pm:

    ==employees DO get paid==

    Not all. Many are exempt from the FLSA.


  50. - Arthur Andersen - Monday, Jun 29, 15 @ 4:58 pm:

    That “how to define an essential employee” is a nice piece of bureaucratic nonsense, too. AA has written some, so I’m in a good position to evaluate.

    To the Post, it’s nice the AG has started taking the Constitution seriously.


  51. - Rod - Monday, Jun 29, 15 @ 5:15 pm:

    Anyone Remember - yes but legally the governor can not order the checks to be issued for those employees who are determined to be exempt. The federal guidelines are cited by the AG and I linked the primary document on the other thread earlier.


  52. - Tucker - Monday, Jun 29, 15 @ 5:20 pm:

    The Godzilla and Mothra reference might be even be better than the original but here you go….
    “When elephants fight the grass gets hurt ” or Wapiganapo tembo nyasi huumia. (Swahili)


  53. - A Jack - Monday, Jun 29, 15 @ 5:46 pm:

    The question is do they want to pay us minimum wages plus interest on the back wages? Those interest charges could cost the state quite a bit.


  54. - anon - Monday, Jun 29, 15 @ 6:32 pm:

    I appreciate the document, trying to piece together all the history from earlier posts/comments was difficult.

    That whole essential/non-essential thing… What a mess! I have wondered if I am considered essential or not. It seems that sometimes we are, sometimes we aren’t - and you can never get a straight answer from management/personnel.


  55. - Mama - Monday, Jun 29, 15 @ 6:40 pm:

    ++”I think a very important point is being missed - the Attorney General gave this information to the Governor before he issued his statement. He knew in advance there was no legal authority to do this.”++
    Does Rauner think he is above the law?


  56. - Mama - Monday, Jun 29, 15 @ 7:00 pm:

    Can retirees get paid without an approved budget?


  57. - Clodhopper - Monday, Jun 29, 15 @ 7:37 pm:

    If paid minimum then the back pay later, if back pay is paid in lump sum, won’t that mean a greater chunk will be paid in taxes? Also going to cause some issue I would think with insurance premiums.


  58. - RNUG - Monday, Jun 29, 15 @ 8:15 pm:

    == Can retirees get paid without an approved budget? ==

    Yes. Retiree payments do not come out of the Fiscal Year budget; the pension checks come from the applicable pension fund.

    Interestingly enough, CMS apparently sped up the Kanerva refund checks going to deceased members / their estates. CMS had said by August 1; the checks are out now.


  59. - RNUG - Monday, Jun 29, 15 @ 8:17 pm:

    == If paid minimum then the back pay later, if back pay is paid in lump sum, won’t that mean a greater chunk will be paid in taxes? Also going to cause some issue I would think with insurance premiums. ==

    -clodhopper-, you just listed some of the reasons a court ordered the full payment in the past.


  60. - Just Sayin … - Monday, Jun 29, 15 @ 10:50 pm:

    Comptroller can only pay salaries under an enacted budget or by a court order. A suit can now go forward on July 15 as soon as a ISP officer misses a paycheck under FLSA and is given standing. Actual show of damages will be a new precedence for the court to consider than just a case of the state payrolls not being organized.


  61. - Chicago Sam - Tuesday, Jun 30, 15 @ 7:26 am:

    Rauner bought himself this election with his money, with the intent to run for president. He is proving himself to be operating over his ski’s.

    Now his pride won’t let him mediate thru his bravado.


Sorry, comments for this post are now closed.


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* First Lady Launches Illinois Family Connects
* Governor and Lt. Governor Unveil 2016 Journal of Local Government Shared Service Best Practices

  
* EE, Virgin Mobile take up modified iPhone 6
* Apple Releases New Firmware Update for AirPods
* Galaxy S9 development already on with codename “Star”
* Canada Android Pay availability reportedly begins from May 31
* Apple Shares First Trailer for 'Can't Stop Won't Stop' Sean Combs Documentary
* Chuwi SurBook, light on its feet, stomps all over Indiegogo goal
* Amazon adds shoppable stickers to its iOS app

* Shields pleased with arm after 'pen session
* Quintana looks to avoid another no-decision
* Renteria uses NL maneuvers to guide club
* Trio of HRs not enough as White Sox fall in desert
* Keeping it 100: Abreu hits milestone homer
* Covey exits start in 3rd with oblique soreness
* Trio of HRs not enough as White Sox fall in desert


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