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Will Madigan make it happen?

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Illinois

* Mark Brown thinks that Speaker Madigan will either get a pension bill done, or do whatever he can and let the blame fall elsewhere…

There were no smiles on the faces of anyone emerging from Saturday’s closed-door summit of Gov. Pat Quinn and legislative leaders on how to solve the state’s pension funding woes.

That was the bad news for those hoping for an agreement.

The good news was that House Speaker Michael Madigan told reporters afterward that he wants a pension bill passed by the time the Legislature finishes its lame-duck session Tuesday night.

Past performance tells us that when Madigan is of a mind to pass a piece of legislation, he will pass that piece of legislation. […]

When the speaker speaks, you can take him at his word. But you also have to look for the nuance.

My interpretation: He was a little frustrated by whatever transpired over the previous two hours but will apply himself to forging a deal. If things go south this time, we’ll have a hard time blaming him.

* Subscribers know a lot more about what happened behind closed doors yesterday. The media coverage mainly focused on what people said as they emerged from the leaders’ confab…

Gov. Pat Quinn and Illinois’ legislative leaders met Saturday but couldn’t reach a deal to resolve the state’s pension mess.

“Unfortunately, there are still differences among the participants, and my recommendation is we move beyond the differences and just find a bill that we can pass so there will be some action taken on the question of funding for these pension systems,” House Speaker Michael Madigan said.

He described the meeting among legislative leaders and the governor at the Thompson Center as “productive” and said he remains hopeful that a pension deal can be struck before the lame-duck legislative session’s scheduled conclusion Tuesday.

Asked what he meant by “productive,” Madigan (D-Chicago) joked, “Well, we weren’t throwing punches at each other.”

Senate Minority Leader Christine Radogno (R-Lemont) was less enthusiastic.

“It was a marginally productive meeting,” Radogno said. “We still obviously have a long ways to go.”

* Most every other pension story was covered yesterday, but the Trib’s piece had some important stuff again. For instance…

Cullerton’s position is that a change in public pensions must be accompanied by a choice for employees, such as opting between keeping the cost-of-living increase and giving up health care, or taking a smaller annual increase but keeping health benefits. Cullerton staunchly believes that his approach is the only way to work around the state Constitution’s guarantee that a person’s pension cannot be diminished once it is set. But not everyone agrees with his approach.

Following the meeting, Cullerton, in a statement from an aide, said he was “encouraged,” but still urged the House “to follow the Senate’s lead.” Radogno, however, called the meeting only “marginally productive” and noted Democratic leaders were at odds over whether any pension legislation should include changes being sought by Mayor Rahm Emanuel to deal with Chicago’s municipal pensions.

“We will vote on what Democrat leaders decide to put up on the board,” said Radogno, who did not take questions. “And some of the issues, they can’t even decide if Chicago is going to be in or out of this program. So they have thinking to do before we have an opportunity to vote.”

* The Tribune editorial board sounded almost reasonable on pensions, for a change, when it endorsed the new Nekritz/Cross reform proposal…

In sum, this plan provides a substantial and relatively swift restructuring of the pension systems. It is a strong proposal.

It will run into predictable resistance from organized labor. It might run into resistance from Sen. Cullerton, who has pressed the House to vote on a much more limited pension reform package approved last year by the Senate.

We respect that Senate effort, but we strongly encourage Cullerton to reach agreement with the other leaders and the governor on legislation along the lines of what has been negotiated by the House members.

One more encouraging sign: Republicans, who have been highly suspicious of Democratic efforts to shift future pension costs to local government, are warming to this compromise. They have helped to craft the product. It is likely that the shift of future pensions costs to local government will be separated and negotiated later, in the spring.

Will wonders never cease?

* Roundup…

* Pensions affect Illinois college scholarships: Augustana Vice President of Enrollment Kent Barnds said the uncertainty surrounding the MAP program had led the college to try and recruit more students from outside Illinois.

* Saturday meeting fails to produce pension plan

* Talks on Illinois pension crisis end without deal

* Illinois House returns for final pension deal push

* Illinois Pension Reform: Teacher Cost Shift Tabled, Governor Quinn Confident Of Passage

* Retired teachers balk at proposal to shift pension costs

* Teachers oppose pension plan

* Editorial: It’s time for new try, fresh approach

* Erickson: Clock ticking on pension deal

* Finke: They’ll take futility for $500, Alex

* VIDEO: NIJWJ Forum: Fred Klonsky, “The Politics of Pension Reform”

posted by Rich Miller
Sunday, Jan 6, 13 @ 12:02 pm

Comments

We’ll have to see what the final language is, but right now the COLA changes still sound unconstitutional.

And let’s be honest here; if they can’t change the COLA, most the immediate “savings” goes up in smoke. Yes, the other changes will address the long term stability and eventually fix the problem, but it won’t be the “quick fix” everyone is looking for.

Comment by RNUG Sunday, Jan 6, 13 @ 12:14 pm
RNUG, do you know anything about the who, what, when and where of preparations for the lawsuits that will be filed, and whether they can call for a stay of implementation of the law’s provisions until they are resolved?

Comment by PublicServant Sunday, Jan 6, 13 @ 12:21 pm
No. I’m not part of any union or association or inner circle or anything like that. Just a concerned SERS retiree.

Because I know some of the same people, I might get asked to join a (non-union originated) suit by one of the groups that filed against the Health insurance … but even there I have heard nothing yet.

Comment by RNUG Sunday, Jan 6, 13 @ 12:31 pm
Unless I’ve missed something, Ty and his crew have been awfully quiet since things started bubbling on Friday.

Comment by wordslinger Sunday, Jan 6, 13 @ 12:35 pm
Inflation won’t stay this low forever, and it’s hard to believe those representing state employees would go along with these Cola changes, which could be devastating to retirees over the long run. And many retirements are long, these days.

But if the constitutional protections are as strong as many say, could the part about the cola be a wink wink proposal? We all know it’s unconstitutional, but the courts will take the heat not the politicians, who can claim pension reform efforts. Especially Quinn, running for re-election now, and no doubt desperate to get the pension debate off the hot issues list.

Comment by cassandra Sunday, Jan 6, 13 @ 12:42 pm
Should have added … if they use the dates in the bill as amended Friday / Saturday (losing track of the days), most of the effective dates are July 1, 2013, Novemebr 1, 2013(certain choices) and December 31, 2013. So there will be time to organize lawsuits and get the courts to weigh in.

Comment by RNUG Sunday, Jan 6, 13 @ 12:45 pm
cassandra,

Your thoughts are similar to mine. I’ve said here for a long time this is all about who gets the blame …

Comment by RNUG Sunday, Jan 6, 13 @ 12:49 pm
Any proposal that will diminish the COLA is unconstitutional and will cost the taxpayers more dollars in court. Why hasn’t any of the pols proposals included a reduction or elimination of corporate tax loopholes, like the AFSCME proposal? Could it be tied to campaign contributions? This could save millions or billions!!!

Comment by Rusty618 Sunday, Jan 6, 13 @ 12:53 pm
Oh I think the whole point of the exercise is “let’s throw everything at the wall and see what sticks”. But whoever votes for this theft, even if the courts ultimately decide, will not get my vote, nor the votes of any of my friends and family and I’ll actively work against them come election time to make sure how they voted on this theft stays at the fore in any bid for re-election.

Comment by PublicServant Sunday, Jan 6, 13 @ 1:00 pm
Rusty - There was no AFSCME proposal, just a few bullet points.

Maybe if they would have drafted a plan and then lobbied for support in the GA, they could have had something on the table.

Instead they decided to run around the state screaming at Pat Quinn. Great plan guys, even if Quinn isn’t re-elected, what was accomplished?

Comment by Small Town Liberal Sunday, Jan 6, 13 @ 1:03 pm
Bullet points or not STL, none are being included in this alleged “everyone has to have skin in the game” farce.

Comment by PublicServant Sunday, Jan 6, 13 @ 1:08 pm
Kudos to Mark Brown…finally someone in the Chicago media recognizes there are a bunch of downstate Repubs who are against pension reform. The Dems aren’t the only ones caving to the unions.

Comment by S.S. Sunday, Jan 6, 13 @ 1:10 pm
Public Servant,

I believe the proposed additional 1% SERS employee contribution starting July 1, 2013 and another 1% staring July 1, 2014 in the current bill was part of an AFSCME offer …

Comment by RNUG Sunday, Jan 6, 13 @ 1:11 pm
PublicServant - Maybe you should ask Henry Bayer why they’re not included. Perhaps the tactic to attack Quinn whenever possible without ginning up support in the legislature wasn’t such a great plan.

Comment by Small Town Liberal Sunday, Jan 6, 13 @ 1:13 pm
And to those who whine that the pension problem is really a “revenue problem” and that the crisis can’t be solved on the backs of state workers alone…I have news flash: the state is pumping about 3 billion more into the pensions than it was 5 years ago. That’s a lot of skin in the game, most of it courtesy of the 2011 tax increase.

Comment by S.S. Sunday, Jan 6, 13 @ 1:16 pm
We all know you’re a big Quinn guy STL. They were right to attack Quinn. He’s done. Maybe they should have kissed a few more pinky rings, but stating that they didn’t try to work with the legislature is just not true. They were never invited to fully participate.

RNUG, that the legislature cherry-picked the employee contribution increase that happened to be part of the current plan anyway doesn’t mean they were exactly tipping their hat to inclusivity.

Comment by PublicServant Sunday, Jan 6, 13 @ 1:22 pm
S.S,

While the additonal revenue is true, that’s all part of the increased contributions required by the 1995 “ramp” that is SQUEEZYING the rest of the State budget …

Comment by RNUG Sunday, Jan 6, 13 @ 1:23 pm
I find the most problematic changes to be those proposed for existing retirees. Their decision to retire was based on a specific set of benefits. To change those parameters is unethical as well as unconstitutional.

The best way to ensure the future health of the TRS and SURS systems is to shift the employer cost to the local districts along with the ability to levy in the uncapped pension funds. Not popular, but the only way I can see to get the necessary funds without further compromising education in districts already strained by dropping property values and reduced state aid.

Comment by Pot calling kettle Sunday, Jan 6, 13 @ 1:31 pm
PublicServant - Let’s say Quinn is done and AFSCME doesn’t get any of what they want in pension reform. You happy with that?

Comment by Small Town Liberal Sunday, Jan 6, 13 @ 1:43 pm
Also PS, what do you mean invited? It’s a legislature, you don’t get invited, you lobby.

Comment by Small Town Liberal Sunday, Jan 6, 13 @ 1:47 pm
On the consideration theory: If I walk through a dark alley in Oswego and get jumped by a mugger, can he defend his actions on the premise that “your money or your life” was actually a valid offer of consideration?

Comment by Themistocles Sunday, Jan 6, 13 @ 1:59 pm
Partially, yes. I’m not in a union, STL. But I’m not going to be divided and conquered either. By the way, it’s not pension reform. In addition, AFSCME and other state workers and retirees will get what they want in court. I’m one with WE ARE ONE. I also believe I’m one with ethics and morals. That being, if you incur a debt, you pay it. All of it. You don’t blame the bank that lent you the money especially when that bank had no choice in that lending. And you especially don’t hurt the most defenseless and blameless in this whole mess; the state retirees. First, fix the ramp. That’s what is unsustainable (of course that would rob IPI and the other plutocrats of one of their best obfuscation tactics), then we’ll talk.

You try to shove something down my throat, and I’m going to shove back. This isn’t some abstract debate for me pal. This is crushing to my family’s future. A future that I worked over 3 decades to obtain. ANYBODY who trys to steal from me and mine is going to have a fight on their hands.

Comment by PublicServant Sunday, Jan 6, 13 @ 2:04 pm
PS - It’s not an abstract debate for anybody. The AFSCME members in my immediate family are affected by it as well. That’s why you should be upset with leadership if their tactics ultimately prove ineffective.

Comment by Small Town Liberal Sunday, Jan 6, 13 @ 2:11 pm
Well said PublicServant.

Comment by Norseman Sunday, Jan 6, 13 @ 2:13 pm
I know who my enemies are STL, and AFSCME leadership isn’t one of them.

Comment by PublicServant Sunday, Jan 6, 13 @ 2:15 pm
STL, the AFSCME pension proposal is out there and has been carried by several media sources. Just because it doesn’t have a number, doesn’t mean it’s non-existent. AFSCME has publicly asked to be included in a negotiation with the pension. But just like the contract negotiations, the state wants it their way, or no way. This will end up in court.

Comment by Rusty618 Sunday, Jan 6, 13 @ 2:17 pm
STL
Maybe the AFSCME proposal has a shell bill# and the language won’t be inserted until moments before it is to be voted on. I seem to recall good governance like that being common in Springfield

Comment by Fed up Sunday, Jan 6, 13 @ 2:49 pm
RNUG I was on another list with DOT types and someone said West VA changed something for current employees and that was overturned by the courts in WV. WV does not have the strong language IL (or AZ have and we know AZ could not even get the Union Proposal of course the AZ GOP offered them nothing for the increase)

I wonder if there has been some sort of national intervention just wild speculation but someone on the news feed said they looked very nervous.

Comment by western illinois Sunday, Jan 6, 13 @ 3:26 pm
western illinois,

NY, IL and AZ has the strongest protection via their basically identical constitution pension clauses. Other states have somewhat weeaker protectons but there is always federal pension law (that only partially applies if the actual employer is the State) and straight contract law … and when it comes to already earned pension benefits, on one basis or the other, the retirees have almost always won when it got to court and a contract could be proven.

You can never say for sure about how a given lawsuit will go, but if I had to give odds, based on past precedent I would bet on the side of the retiree.

——

If we can joke about this, I have a “magic bullet” suggestion for Quinn. The other night on the network news I heard Feds were thinking about minting a single platinum US coin in $1T denomination to deposit with the Federal Reserve so Obama can bypass the Congressionally set debt ceiling and keep spending after about March. Maybe Quinn should ask Obama to mint a second coin in $100B denomination give it to IL so it can be deposited into the IL pension funds.

Comment by RNUG Sunday, Jan 6, 13 @ 3:43 pm
As I commented in an earlier post the best summary of the situation is from Eric Madiar, parliamentarian for Il Senate and advisor to Senator Cullerton’s. Here’s the link http://www.senatedem.ilga.gov/phocadownload/PDF/PensionDocs/madiarrevisedpensionclausearticle.pdf

I think the situation is pretty clear. Any unilateral action by the legislature to “diminish” pensions will be found unconstitutional. Further, coercive “choices” disguised as a voluntary consideration or trade will also be found wanting. Folks this isn’t even a close call, its basic contract law with lots of case law and precedent.

Comment by Old and In The Way Sunday, Jan 6, 13 @ 4:05 pm
[even if Quinn isn’t re-elected, what was accomplished?]

Do you have something against progress?

Comment by Quinn T. Sential Sunday, Jan 6, 13 @ 5:36 pm
{Steve Brown is spokesman for House Speaker Michael Madigan. He says the Chicago Democrat told Quinn that reform legislation is paramount and lawmakers can figure out the financing later.}

This is the kind of thing that should Mark Twain was referring to when he said “No man’s life, liberty, or property is safe while the legislature is in session”

We’re not going to tell you (the representative or the voter) what this is going to cost (individually or collectively) but lets just pass it and figure it out later.

Anybody who thinks that Madigan doesn’t know what the costs of any of the plans are (in real time; as they’re amended) is kidding themselves.
Not having to share that information in advance of a vote however is the easiest way to passage.

Comment by Quinn T. Sential Sunday, Jan 6, 13 @ 5:54 pm
Arizona and New Hampshire have similar public pension protection clauses to that of Illinois, in their state constitutions. Their courts rejected those states new laws to force state employees to pay more towards their pension.

Courts Block Efforts at Public Pension Change
http://www.governing.com/news/state/sl-courts-block-efforts-at-public-pension-change.html

Arizona courts also blocked the AZ legislator’s attempt to reduce COLAs.
http://www.azcentral.com/news/politics/articles/2012/05/29/20120529maricopa-judge-pension-raises.html#ixzz1wMtPh84v

Comment by Joe M Sunday, Jan 6, 13 @ 6:29 pm
SEIU has a call in campaign going now. Call your house member now because this it it. At least make’em sweat as they cast an immoral vote. Not because many of them would be bothered by an immoral vote, but because they might come to understand the gravity of the opposition they’ll face come re-election time.

You will not survive if you vote for this unconstitutional attempt at theft.

Comment by PublicServant Sunday, Jan 6, 13 @ 6:35 pm
Folks, you may want to check out the following article linked below to get a handle on how different states may or may not protect public pensions.

http://wikipension.com/images/1/1f/Madiar_ABA_Pension_Article.pdf

Comment by Titoman Sunday, Jan 6, 13 @ 7:23 pm
as i stated in a previous post

the GA can toot their horn on Pension reductions jan 9th but reality will kick in

To Whom It May Concern

April 13, 2010

The March 10, 2010 Tribune Op-Ed Don’t Call this Pension Reform by R. Eden Martin of the Civic Committee of the Commercial Club of Chicago and the March 27, 2010 Tribune Editorial, Yes You Can claim that Governor Quinn and the General Assembly should have gone further in bringing pension reform to Illinois by reducing the pensions not only of new employees, but of existing employees as well. My colleague, John Fitzgerald, and I have looked closely at this important State issue, and our conclusion is inescapable – as a matter of law, the pension rights of current employees simply cannot be diminished as Mr. Martin and the Tribune contend. (Our legal analysis is below)

The plain language of the Illinois Constitution’s Pension Protection Clause (Article XIII, Section 5) states that, “Membership in any pension or retirement system of the State . . shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

As courts in this State have confirmed, this language is crystal clear. Public employees become members of a pension system at the time of hire or shortly thereafter and once they become members, their pension rights are set and cannot be “diminished or impaired.”

This is exactly what the framers of the State’s 1970 Constitution intended. At the Constitutional Convention, one of the co-sponsors of the Pension Protection Clause succinctly illustrated the point: “Benefits not being diminished really refers to this situation: If a police officer accepted employment under a provision where he was entitled to retire at two-thirds of his salary after twenty years of service, that could not subsequently be changed to say he was entitled to only one-third of his salary after thirty years of service, or perhaps entitled to nothing.” Not surprisingly, as it noted in a 1996 decision McNamee v. State of Illinois , the Illinois Supreme Court has “consistently invalidated amendments to the Pension Code where the result is to diminish benefits” to which State employees acquired a vested right when they entered the pension system. Legal analysis that Sidley Austin LLP performed for the Civic Committee glosses over this controlling authority, misconstrues a comment that the Illinois Supreme Court made in a 1974 decision (which has been distinguished in subsequent cases), and incorrectly relies on a 1979 Illinois Attorney General opinion that has been trumped by subsequent Illinois Supreme Court decisions.

Any pension reform effort will depend on the strength of its legal foundation. The Governor and the General Assembly have been careful to comply with the Illinois Constitution’s Pension Protection Clause, as well they should. The alternative would be a short-lived pension reform that is invalidated by court order after protracted litigation, which would be a disservice to the taxpayers.

Comment by foster brooks Sunday, Jan 6, 13 @ 7:27 pm
==Cullerton’s position is that a change in public pensions must be accompanied by a choice for employees, such as opting between keeping the cost-of-living increase and giving up health care, or taking a smaller annual increase but keeping health benefits. ==

The trouble with this approach is that the constitution protects all “retirement benefits,” which sure seems to include the health insurance benefits that employees earned for each year of service. There is no consideration in forcing retirees to choose which of two contractual rights they will forfeit. You have to offer them something they don’t already have a right to receive.

Comment by Anonymice Sunday, Jan 6, 13 @ 7:47 pm
One thing I can’t understand is why the bills that are being proposed insist on punishing the employees and retirees. Current retirees are dying off daily as will current employees over time. If the state adequately ramps up its employer contribution, the funded ratio should be reasonable within a relatively short period of time. Why is the Madigan and the legislature so focused now on making the systems 100% funded after ignoring the issue for 30-40 years? They couldn’t be vindictive, could they?

Comment by Soccertease Sunday, Jan 6, 13 @ 8:01 pm
Soccertease,

To somewhat oversimplify … Under the current assumptions and benefit rules, there is a $100B hole in the pension funds. The reason the bills focus on the employees and retirees, specifically the health insurance and the COLA, is because, other than the past underfunding, those are the two biggest driving forces to the so-called pension crisis or, in more accurate terms, total state spending crisis. And the health insurance doesn’t even come out of the pension funds but instead comes out of each year’s general spending. Just by changing the COLA downward, you can shrink the $100B pension hole to around $67B under one of the recent proposals. Add in the payment increases from the 1995 “ramp” (based, again, on the current benefit rules) and that’s where a lot of the money is going … so that’s what the GA is trying to attack, the biggest piles of money being spent.

Comment by RNUG Sunday, Jan 6, 13 @ 9:25 pm
Anonymice @ 7:47,

The GA and Quinn clearly don’t believe the health insurance is protected because the GA passed SB1313 last year and Quinn signed it. The retirees do believe it is protected several different ways. That’s why it is in court. Maybe we’ll find out a bit more on it Jan 14th.

If you’ve followed the different versions that have leaked out of the CMS proposed “retiree health insurance premium” rules to implement SB-1313, their backing off from the service time calculation and their change to relying more on revenue from the dependent fee rather than the retiree fee would suggest to me CMS expects to lose the battle to charge the “20 year” retiree for health insurance. But that’s just my reading tea leaves from the outside.

Until it’s ruled protected by the courts, the GA can try to force retirees to choose between health insurance and the COLA. And that point is why I believe any pension “reform” bill that includes such a “choice” should not be passed until the “Maag” court case is resolved.

Comment by RNUG Sunday, Jan 6, 13 @ 10:06 pm
RNUG

You are right on target. This is all based on forcing the employees/retirees into a decision that is coercive in nature. This is also illegal under contract law.

Surely these people are smart enough to know that ultimately this is not going to pass legal or constitutional muster. So what is the end game? Are they playing for time and the opportunity to blame the judiciary? Who knows, I may be wrong….they just may not be that smart after all!

Comment by Old and In The Way Sunday, Jan 6, 13 @ 10:50 pm
Old and In The Way @ 10:50 pm:

It’s all about who gets the blame …

Comment by RNUG Sunday, Jan 6, 13 @ 11:21 pm