41 Comments - Deadbeat Conservative - Tuesday, Jun 6, 17 @ 11:55 am: Well, at least the Governor and his ILGOP are happy with the path we’re on. - Thoughts Matter - Tuesday, Jun 6, 17 @ 12:00 pm: It’s got to be something like this or the K12 hostages that finally gets us a budget. - UIC Guy - Tuesday, Jun 6, 17 @ 12:00 pm: How about the judge orders that taxes be raised? Well probably not this judge in this court, but it could come—and for the politicians it might be the perfect solution: taxes would go up but it would not be their fault. (As in: the buck stops elsewhere.) - Chicago_Downstater - Tuesday, Jun 6, 17 @ 12:39 pm: @UIC Guy “How about the judge orders that taxes be raised?” I believe that’s the definition of legislating from the bench & I doubt the higher courts would up-hold it. If the court rules the Medicaid bills have to move up in the queue, then it’ll still be up to the legislature to figure out how to do it & the executive branch to not veto the solution. All in all I’m very interested to see how this pans out. - titan - Tuesday, Jun 6, 17 @ 12:46 pm: We seem to be rapidly approaching the point where more money is being ordered out than is coming in (if we haven’t already passed that point) - PJ - Tuesday, Jun 6, 17 @ 12:52 pm: There’s no way a judge has the authority to mandate a revenue increase from the bench. It would a historic and unprecedented violation of separation of powers and I have to imagine it would be tossed with the quickness. All she can do is force the state to spend money it literally doesn’t have. - 51st ward - Tuesday, Jun 6, 17 @ 12:52 pm: This is like a backdoor bankruptcy, a judge deciding who gets paid and who doesnt. Cant believe a lawyer for the plaintiff suggested not paying the pensions, pay us first. - RNUG - Tuesday, Jun 6, 17 @ 12:55 pm: == How about the judge orders that taxes be raised? == Separation of powers issue. Only the Legislature has the power of the purse. A judge CAN’T order the GA to raise taxes … but they can STRONGLY suggest it. A judge CAN order the State’s bills be paid in a timely manner. And a judge CAN find State officials in contempt of a judical order … and CAN impose penalties. - Seats - Tuesday, Jun 6, 17 @ 12:57 pm: RNUG - Could you expand at all about “And a judge CAN find State officials in contempt of a judical order … and CAN impose penalties.” What kind of penalties? - Anotherretiree - Tuesday, Jun 6, 17 @ 1:00 pm: ==And a judge CAN find State officials in contempt of a judical order … and CAN impose penalties== I’ve thought/hoped that it would come to the day when a Judges order couldn’t be carried out due to failure to pass a budget. The Judge seeing it as a direct challenge to Judicial authority and the rule of law, starts jailing for contempt. - Deft Wing - Tuesday, Jun 6, 17 @ 1:08 pm: –”A judge CAN order the State’s bills be paid in a timely manner.” Huh? Can’t squeeze water from a stone. Ordering Mendoza to pay something she doesn’t have is NOT contempt. So I’d like a citation to legal authority for that proposition, please Ms./Mr. RNUG. - RNUG - Tuesday, Jun 6, 17 @ 1:10 pm: == What kind of penalties? == Typically, when a judge finds a lawyer in contempt, they order a fine or imprisonment, either overnight or until the order is complied with. Not sure how a fine would work when the state official is acting in their official duty; probably come out of the office budget or the campaign fund. You know, that does raise an interesting point. People have been calling for locking up the GA and/or the 4 tops and the Governor until a budget is reached, which would normally be illegal. But if a judge ordered it in response to violating a valid judicial order … ??? - PJ - Tuesday, Jun 6, 17 @ 1:17 pm: RNUG - A judge is not going to lock up the GA. They’ll get a different court order saying which court orders they can ignore, then it’ll be appealed, and keep on in legal limbo for quite a while. There’s not really much a judge can do if they order payment and the state has $0.00 in the bank. - Demoralized - Tuesday, Jun 6, 17 @ 1:20 pm: None of the judicial orders are against the General Assembly. The orders require payment of bills. The only one the judge could act against would be the Comptroller and unless she’s got a money tree somewhere she can’t pay all of the bills she’s being ordered to pay. So, I’m not sure how finding her in contempt fixes the situation. A contempt citation doesn’t all of a sudden make the money available. - RNUG - Tuesday, Jun 6, 17 @ 1:21 pm: == A judge is not going to lock up the GA. == Yeah, I know realistically a judge won’t do that. But that doesn’t mean a judge can’t keep ordering appearances in their courtroom of some of the principals involved … - PJ - Tuesday, Jun 6, 17 @ 1:23 pm: It would be pretty unprecedented for a judge to haul in legislators and make them explain their budgetary inaction. Judges tend to be wary of wading into lawmaking, as they should be. That would be pretty close to, if not over the line. - Rich Miller - Tuesday, Jun 6, 17 @ 1:25 pm: ===Judges tend to be wary of wading into lawmaking=== State judges, yes. Federal judges? Not so much. - RNUG - Tuesday, Jun 6, 17 @ 1:29 pm: == The only one the judge could act against would be the Comptroller and unless she’s got a money tree somewhere she can’t pay all of the bills she’s being ordered to pay. == Maybe, maybe not. I’m not in favor of activist judges … but one could conduct an inquiry into WHY the Comptroller has no money to pay the bills. That would probably be enough grounds to drag in the 4 Tops and the Guv to answer questions. - Mental Floss - Tuesday, Jun 6, 17 @ 1:30 pm: FYI-only….the $2B in Medicaid bills is predominanty (80%) federal money (Medicaid matching funds or FMAP); that’s why not paying it out (in lieu of other bills) is not only illegal, but it also sets precedent for other states to do the same. Not sure everyone gets that…. - Crispycritter - Tuesday, Jun 6, 17 @ 1:31 pm: At home, just because i have no budget does not mean i have no money. Same with the State, they still have money coming in. - RNUG - Tuesday, Jun 6, 17 @ 1:31 pm: And yeah … what I’m describing is sounding like a bankruptcy hearing without declaring bankruptcy. - doggonit - Tuesday, Jun 6, 17 @ 1:32 pm: I think the courts or lack of k to 12 funding need to force a crisis that is widely felt. Perhaps a ruling to pay Medicaid will move the needle, at last? - RNUG - Tuesday, Jun 6, 17 @ 1:33 pm: == It would be pretty unprecedented for a judge to haul in legislators and make them explain their budgetary inaction. == Well, nothing else about this situation is normal. - Bondguy - Tuesday, Jun 6, 17 @ 1:34 pm: The “$800 million in the bank” comment is somewhat misleading. From State Treasurer Frerichs’ website: “State Investment Portfolio – As the state’s top banker, the Treasurer is charged with providing treasury, cash management, and investment support to Illinois government agencies, boards and commissions in a manner that provides the most advantageous solution to their individual needs. The Treasurer’s Office manages the State Investment Portfolio, with assets of approximately $12-$14 billion, providing the necessary liquidity to meet the state’s daily obligations while investing remaining funds in authorized short/long-term investment opportunities.” http://www.illinoistreasurer.gov/Office_of_the_Treasurer/State_Investments/State_Portfolio These high quality, short term investments can be quickly and easily turned into cash, if needed. - Deft Wing - Tuesday, Jun 6, 17 @ 1:55 pm: Yeah, that’s what I thought, RNUG. Federal Judges have been super helpful thus far, right? But the reality is, the money is running out now. So the activism is about to stop and become merely suggestive. Just watch. The State cannot pay bills without money. “Ordering” it to do so is the equivalent of ordering the State to print its own currency. - wordslinger - Tuesday, Jun 6, 17 @ 2:01 pm: DW, are you unaware that 90% of current state spending is court ordered? Do you thnk the state simply could blow off those orders without penalty? What would be different here, if the judge so orders? - Last Bull Moose - Tuesday, Jun 6, 17 @ 2:05 pm: RNUG-I like the way you think. We seem to be on the path to Sovereign Default. That is in effect bankruptcy without the protection of the Federal Courts. Nobody knows how that would play out as the precedents are old and it has not happened in modern times. If the Federal Government has to pass a law to solve an Illinois specific problem, we in this state are in deep trouble. Who thinks Ryan from Wisconsin and Pence from Indiana are going to deal with Illinois on favorable terms? - Deft Wing - Tuesday, Jun 6, 17 @ 2:05 pm: -”And yeah … what I’m describing is sounding like a bankruptcy hearing without declaring bankruptcy.”– Actually, you’re not. Bankruptcy is a proceeding with clear rules. Oh, and it so happens, a lot, that there are times when things don’t get paid for because there’s no money– no contempt orders follow typically. Just the reality of business/personal failures where creditors eat their losses and move on. The math is catching up with Illinois. - Original Rambler - Tuesday, Jun 6, 17 @ 2:48 pm: I’m no expert in this area but I think one option the judge can consider is appointing a receiver. Give the receiver broad powers including raising revenue. That way it’s not the court directly raising revenue, but it’s appointed receiver. I have to believe there are a number of interested parties who have already retained law firms to conduct the research on this issue. Would love to see or hear it. - Anonymous - Tuesday, Jun 6, 17 @ 3:22 pm: What would happen to Illinois retiree pensions in the case of a sovereign default? - Deft Wing - Tuesday, Jun 6, 17 @ 3:48 pm: The pensions payments come from TRS, GARS, SURS and SERS. Given that those funds are about 37% (give or take) funded, there will default on payments to retirees. It’s just a matter of time. What happens then? Well, checks bounce … that’s what happens then. - RNUG - Tuesday, Jun 6, 17 @ 3:50 pm: == What would happen to Illinois retiree pensions in the case of a sovereign default? == Anybody’s guess at this point. The only thing recent we can point to is Arkansas during the Great Depression. In that case, only the bondholders we’re stiffed in that their payments were delayed. Everybody else did OK. Yes, there was a bit of Federal help but it wasn’t much because there wasn’t much to go around. And even the bondholders were eventually made whole; they just had a wait a lot of years. Puerto Rico could be an example of sorts, but they are really in a much different situation. They realistically can’t raise taxes. But, do far, it has been mostly the bondholders coming up short. If you just look at the numbers, Illinois can still raise taxes and, with a lot of painful belt tightening, dig out from this mess. But I’m not exactly sure when we will teach a tipping point; external ecomonic factors could drastically affect us. 2 years from now may be too late to fix it. - RNUG - Tuesday, Jun 6, 17 @ 3:56 pm: == What happens then? Well, checks bounce … that’s what happens then. == That will depend on what the courts say then. Right now all we know is what was said in IFT … which implies the State will have to pay the pension out of GRF. Will pensions have priority over bonds and health / welfare services? Don’t know. - Anonymous - Tuesday, Jun 6, 17 @ 4:03 pm: Thanks for your answers, RNUG. What is IFT? - siriusly - Tuesday, Jun 6, 17 @ 4:11 pm: Didn’t a Federal Judge tell the GA “pass a concealed carry law or we will write one for you? Can’t Lefkow just order a budget and payments ? She should order a balanced budget by July 1 or the courts will do it themselves - RNUG - Tuesday, Jun 6, 17 @ 4:36 pm: == Thanks for your answers, RNUG. What is IFT? == Shorthand reference to a 1975 Illinois Supreme Court Decision IFT v Lindberg. Background: the GA and Dan Walker decided to short the pension funding for FY75. A number of the unions, with the Illinois Federation of Teachers (IFT) as lead, sued the State claiming, among other things, the recently enacted Pension Clause of the new State Constitution required “full” pension funding. To paraphrase to the court’s decision, the State can pre-fund (or not) the 5 pension funds in any manner the Legislature deems appropriate, but whatever the State does, the actual pensions have to be paid when due. Most people take this to mean the pension receipiants have a rock solid claim to payment, at least equal to the claim of Illinois bond holders. In other words, about as ironclad a guarantee as you can get. Subsequent decisions about no diminishment and supporting the pension rules in place at time of hiring have mostly reinforced this viewpoint. Kanerva and SB-1 are the most recent examples. What is interesting in both of those decisions is, along with the pension clause, those decisions also cited previous (pre-1970) Illinois pension law in support. As long as the IL SC makeup remains the same 7 judges, and as long as the issue is in State courts, you can expect a similar decision. And even if it did get to Federal law, a history of Federal deference to the states in questions of dealing with actual State employees and strict contract law should give the same result. The only wild card would be if the Feds suddenly decided to allow States to take bankruptcy. If you want to do more reading on Illinois State pensions, you can start with the Eric Madiar “Welching” document. Getting a bit dated but still the most comprehensive analysis of the whole thing. And there are more recent summaries, including from the BGA, that cover portions of the issue. - RNUG - Tuesday, Jun 6, 17 @ 4:45 pm: == Didn’t a Federal Judge tell the GA “pass a concealed carry law or we will write one for you? == Yes, they did … and pretty much implied it would be permit-less if Illinois didn’t get it’s act together. There was one big difference; they were talking about forcing a Federal Constitutional Right on the State. A state not having a budget is not necessarily a violation of Federal law. But if not having a State budget is impacting state citizen’s federal rights, then the feds would have a wedge issue to open a door. - Seats - Tuesday, Jun 6, 17 @ 6:02 pm: Any chance at all it is being delayed so that whatever it is can be over Shadowed in the newspapers by Comey? Or do federal judges not operate that way? - Original Rambler - Tuesday, Jun 6, 17 @ 6:04 pm: Just spitballing here but maybe the deprivation of a property right without due process? - wordslinger - Tuesday, Jun 6, 17 @ 6:49 pm: –Didn’t a Federal Judge tell the GA “pass a concealed carry law or we will write one for you?– No. The Court of Appeals ruled that Illinois’ blanket ban on any form of carry in public by anyone, anywhere was unconstitutional based on the Supremes’ Heller and McDonald decisions. The court stayed the order, twice, to give the state the opportunity to pass a permit law allowing some form of carry by some people in some places, in light of those decisions. There was no mention of conceal-carry. No court in the United States has ever ruled that conceal-carry is a constitutional right under the 2nd Amendment. There was no requirement for a state law or threat to impose a law from the court. If Illinois had not passed a law, it’s likely home-rule communities would have instituted a wide variety of ordinances to comply with the Supremes’ decisions. As it played out, the state law specifically prohibits home rule ordinances on carry and goes further than the Supremes’ decisions required. At the time, I think it was called the Downstate Democrat Endangered Species Act. - Gary from Chicagoland - Tuesday, Jun 6, 17 @ 7:01 pm: Didn’t the Federal judges in both Rockford IL and Kansas City MO raise the property taxes to pay for better schools back in the 1980’s? Why can’t a Federal judge today mandate increased State taxes to pay the IL Medicare bills? Sorry, comments for this post are now closed.