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Another look ahead

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Illinois

* Yesterday, we took a look at an analysis by legal expert and Supreme Court watcher Kurt Jenkins. I followed up with Jenkins later in the day with this e-mail…

I’m curious how you think the Supreme Court roll call will break out on a pension bill. Doubt you can speculate much without an actual law, but wondered anyway.

Jenkins said I was right that he’d be hesitant to speculate, but he did offer this…

I think a few things are clear from the Court’s recent history. I don’t agree that the Kilbride Court is a political court; I think their opinions show it’s a pragmatic and fairly cautious one.

It’s deeply ingrained in appellate judges to be reluctant to step in and strike down what the political branches have done. They’ll only vote to overturn a statute if they feel they have no other choice, and that’s particularly true in a case like this that’s clearly important to the state.

So those attacking whatever bill the legislature passes will certainly have the burden of proof before the Court; this isn’t a race that starts out even.

That said, I think we’ll get a much clearer picture of the Court’s inclinations relatively soon. As you know, they’ve got the Kanerva v. Weems pension case in front of them now. It may well be heard on the September docket – if not, then certainly no later than the November docket. We’ll know far more about what the Justices’ concerns in this area of the law after seeing the Kanerva argument.

* Meanwhile, some of y’all have wildly overreacted to the news that Speaker Madigan predicted his pension plan would get a majority of at least four votes on the Illinois Supreme Court. But Madigan has insisted that he didn’t have any contact with any of the justices, he was just speculating. So, you can probably remove your tinfoil hats.

* Regardless, the questions continue. Tom Kacich…

Does Madigan really have that much clout, I asked [former state Rep. Bill Black], that he can practically tell the Supreme Court how to rule on a major constitutional issue?

That’s not it, said Black. It’s that Madigan knows the Supreme Court members’ backgrounds and how they interact.

“I don’t think Sherlock Holmes would ever be able to trace any indication, verbal, written in code or whatever, that Mike Madigan would ever suggest to a Supreme Court justice how they should find a certain case. And I don’t think he would do so,” said Black, who served for 14 years in the Illinois House with Madigan.

“But I do think he has a very keen knowledge how that court works. And he certainly has a keen knowledge of where those people came from. I think that gives him an advantage. If anybody could understand how they would react to anything, it’s probably Speaker Madigan.”

posted by Rich Miller
Wednesday, May 15, 13 @ 10:56 am

Comments

i think this is very accurate analysis, consistent with a new paradigm about how this state deals with its pensions, reflective of the current financial abyss.

It is obvious to any serious observer of the ongoing financial disaster that any approach to solve this issue must include significant pension reform, along with several other things which have been well discussed here (revenue, most importantly).

So if we don’t have significant pension reform, there is no getting out of this mess. If the judges strike down legislation which involves significant pension reform, there is no getting out of this mess. The judges will be aware of this when considering the legality of such legislation.

Comment by biased observer Wednesday, May 15, 13 @ 11:13 am
The whole idea is indeed IF there is another way of “getting out of this mess.” If Madigan’s plan passes, it might be difficult to argue that there is no other way out. One other way out would have been to pass the Cullerton plan, which had the agreement of many of the unions representing public employees. Another way out would be to raise taxes, as not wishing to raise taxes does not mean it is closed to the legislature. Another way out is to shift future costs to employers, saving money for the state in the long run. Another way out is to pay as scheduled at the expense of other services. Again, unpopular and undesirable do not make it a closed path. I find it difficult to embrace any logical conclusion that the drastic and unilateral cuts in Madigan’s plan that clearly diminish the pension benefit are the only way out. Maybe someone’s preferred way out, but not the only one.

Comment by Bobbysox Wednesday, May 15, 13 @ 11:39 am
I still think the constitutional language is awfully strong and specific, although I understand why public employee groups would prefer not to take the chance.

As to the notion that there is no getting out of this mess, I disagree. If the pensions are upheld as is for retirees and current employees, there are numerous options, many of which have been enumerated here by various commenters. The issue is, who pays, not that Illinois, a wealthy state, can’t pay. Is a tax increase one of the ways to pay. Absolutely, although not the only one. Is a tax increase politically impossible. Of course not. It’s all in the presentation. However, it seems that until the court has ruled, we’ll have to wait.

Comment by cassandra Wednesday, May 15, 13 @ 11:39 am
I disagree with Mr. Jenkins. The opinion striking down medical mal caps on “separation of powers” was illogical and poorly written. No deference to the legislature was shown. And I’ve argued there many times.

Comment by Curmudgeon Wednesday, May 15, 13 @ 11:41 am
=== i think this is very accurate analysis, consistent with a new paradigm about how this state deals with its pensions, reflective of the current financial abyss. ===

Wow, paradigm really. Is that what you get out of Jenkins response. Try reading it again a few times and see what you get for your pair of dimes.

Jenkins provided beneficial analysis by noting that the Kilbride Court is not political. That’s all we ask. He also noted what most folks who are lawyers or who have followed legal actions already know, that is the courts try to support legislative enactments unless clearly in violation. This was the basis of Roberts decision upholding Obamacare.

What’s not said is that courts also operate under the doctrine of “stare decisis,” which is “Latin for ‘let the decision stand.’” This is “a doctrine requiring that judges apply the same reasoning to lawsuits as has been used in prior similar cases.”

There are a number of prior decisions that give us “hope” that they will guide the court in ruling against Madigan.

There are also considerations about the plain language of a contested law and the intent in approving that law. Again, we hope that the clarity of the consitutions diminishment clause and the intent expressed by convention delegates will help support a ruling finding Madigan unconstitutional.

I’m certainly not putting myself in the same class or even the same campus as Jenkins, but I don’t take his analysis as a “new paradigm.

Comment by Norseman Wednesday, May 15, 13 @ 11:43 am
Shouldn’t we also be considering how the federal courts will rule? Even if the IL Supremes rule it State constitutional, couldn’t the feds say it violates contract law? Or is that considered unlikely?

Comment by thechampaignlife Wednesday, May 15, 13 @ 11:48 am
===Shouldn’t we also be considering how the federal courts will rule?===

One at a time, man.

Comment by Rich Miller Wednesday, May 15, 13 @ 11:49 am
- biased observer (@ 11:13 am) - The state owes lots of folks:

Service providers/vendors (the 1%ers) get paid late, but in full with a good rate of interest.

Bond holders (also the 1%ers) get paid on time and in full.

Pensioners (full of women and minorities) get the shaft.

And that’s “constitutional”?

Comment by titan Wednesday, May 15, 13 @ 12:05 pm
titan,

schools are already getting shaft and the shaft is getting longer. they are projected to be funded at 82% of their “promised” state aid next year.

vendors (such as hospitals) are getting paid 18 months to 2 years late. further it is unpredictable. late payment is decreased payment . think about that. if you don’t understand I will try to explain it to you. most vendors are not 1%ers, hospitals for example. most hospitals run on such small margins that the will not be able to tolerate late payments. jobs are getting lost because of these delayed payments I can promise you. jobs are failing to be created because of these late payments I can promise you.

would it affect your household finances if your paycheck or pension check were delayed by 18 months?

Comment by biased observer Wednesday, May 15, 13 @ 12:12 pm
It would not be surprising to see the State courts want to have the initial ruling based upon contract issues. No one wants the blame for forcing an extension or expansion of the income tax increase.

The GA wants the blame to be on the courts if this happens. The State SC having to rule against the pension legislation is a very real possibility given that the legislation will be doing almost precisely what the State Constitution clause was designed to prevent. I bet the State SC would prefer the blame to reside on a contracts basis within the federal system.

To the extent that the Cullerton approach is “more constitutional” (both State and federal), it might be less of a hot potato for the courts.

Comment by east central Wednesday, May 15, 13 @ 12:20 pm
@ biased observer - the public schools are for “little people” so shafting them is OK.

Those paid late get what? 9%? 12% interest?

Comment by titan Wednesday, May 15, 13 @ 12:22 pm
One at a time but the legislators have to consider both when passing a law. If it gets struck down in either place, it’s back to the drawing board. Better to consider both courts now than make it through one, get shot down by the other, and be back at this 2-4 years from now. It may still happen anyway but we can at least try to mitigate it now.

Comment by thechampaignlife Wednesday, May 15, 13 @ 12:31 pm
the high court not political? Oh, come on. burke not political. freeman not political. they cut their teeth on legal politics. are a couple of them apolitical? sure, but this court is definitely political.

Comment by Jim Wednesday, May 15, 13 @ 12:59 pm
Agree totally with Jim.

That being said, the constitutional language and legislative history are so clear that a majority may well enforce the constitution and strike down either Madigan’s or Cullerton’s bill. And, as we’ve discussed before, Madigan may be counting on that, as a way of transferring the political heat for a necessary tax increase (and/or a constitutional amendment for a graduated tax), so that a permanent fix can be enacted.

Comment by Keyrock Wednesday, May 15, 13 @ 1:11 pm
Keyrock, honestly, that would fit the Madigan profile. He’s thinking 4 moves ahead in his Chess game when we all think it’s checkers that’s being played.

Comment by PublicServant Wednesday, May 15, 13 @ 1:13 pm
= the current financial abyss…ongoing financial disaster =

These are very pessimistic, gloom and doom words to use considering that the stock market has been hitting new highs each week which signals an improved economy. This alone will bring in new tax revenue and improve the performance of the pension funds.

Comment by Ruby Wednesday, May 15, 13 @ 1:16 pm
Our State seems to spend a good deal of time crafting policy, then more time looking for ways to invalidate the language that was adopted. Until recently, no one seemed that confused as to what health insurance for 20 years service meant. If the language that was in place was so uncertain, why in the world did we ever need Tier II?

Comment by sk hicks Wednesday, May 15, 13 @ 1:17 pm
Ruby,

I’m going to save Rich some time on this one…..you can’t possibly be serious with this comment. Are you in the “manufactured crisis” camp, too?

Comment by biased observer Wednesday, May 15, 13 @ 1:20 pm
==One at a time but the legislators have to consider both when passing a law. If it gets struck down in either place, it’s back to the drawing board.==

But how the federal courts might rule depends on how the Illinois courts do rule. For example, if the ILSC upholds Judge Narduli’s decision in Maag that health insurance is not covered by the pension clause and that the old statute did not itself create a contract, the USSC is supposed to respect the ILSC’s interpretation of the IL constitution and laws. On what basis would they overturn the decision? Of course, the USSC totally disrespected the Florida SC’s interpretation of Florida election laws in Bush v. Gore, so who can tell what they would do here?

If the Illinois courts hold that the Maag legislation or pension reform is an impairment, but justified under police powers, then there is a federal impairment clause issue for the USSC to decide.

Comment by Anon. Wednesday, May 15, 13 @ 1:23 pm
As I wrote yesterday, whether he can read the court or not, how else would the Speaker respond? Madigan is not going to say a key bill awaiting approval in the Senate won’t make it past the Supreme Court. Especially when he is the key proponent of that bill.

Comment by Pot calling kettle Wednesday, May 15, 13 @ 1:26 pm
Would the USSCT hear this case? It’s a state issue.

Comment by WilliamO Wednesday, May 15, 13 @ 1:32 pm
“couldn’t the feds say it violates contract law?”

What’s the hook for Federal Jurisdiction? Not a US Constitutional issue.

Comment by Chris Wednesday, May 15, 13 @ 1:43 pm
= Madigan is not going to say a key bill awaiting approval in the Senate won’t make it past the Supreme Court. Especially when he is the key proponent of that bill. =

I totally agree!

Comment by Ruby Wednesday, May 15, 13 @ 1:46 pm
Wait. I don’t think there will be an agreed bill. But in Conference Committee miracles sometimes happen.

Just go back to River Boat gambling with Senator Denny Jacobs.

President Cullerton is playing to the Unions and will probably gain 4-5 more seats in the Senate in the next election.

I believe that Leader Watson had at one point 28 seats in the GOP caucus. What has happened? And he is a Cardinal fan.

Comment by inker Wednesday, May 15, 13 @ 2:46 pm
@ Chris, Article One, Section 10 of the US Constitution says “No state shall…” and goes into several items including the impairment of contracts. Because the Constitution specifically mentions states in this way (one of the few places where it actually puts limitations on states) the impairment is a potential federal matter and can overrule a state SC if an impairment finding is made. That said, the USSC is usually deferential to state SC’s unless the breach is egregious.

Comment by Six Degrees of Separation Wednesday, May 15, 13 @ 2:49 pm
The latest SRS newsletter had an article about a State sponsored Medicare plan. According to this article, effective 1/1/2014, Medicare primary retirees and survivors will be required to enroll in this state sponsored plan. It didn’t give any additional information.

I think this state-sponsored plan is a Medicare Advantage plan. According to the Medicare website, an Advantage plan is insurance offered by private companies that are approved by Medicare, but its not the traditional Medicare. Also, if you opt to take an Advantage Plan in lieu of traditional Medicare, you cannot by law get gap insurance to cover any costs not included in the plan.

It sounds to me that starting in 2014 the State is going to force all retirees to drop traditional Medicare (part b, I assume) and take their plan instead - and who knows how good that will be or what it will cover. Does anyone have any additional info on this?

Comment by Waldi Wednesday, May 15, 13 @ 2:53 pm
==What’s the hook for Federal Jurisdiction? Not a US Constitutional issue.==

Article I, Section 10, of the US Constitution:

“No state shall . . . pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts.”

Comment by Anon. Wednesday, May 15, 13 @ 2:56 pm
===But in Conference Committee miracles sometimes happen.===

They don’t do those any more.

Comment by Rich Miller Wednesday, May 15, 13 @ 2:57 pm
Here is a link to a good read on how the Feds may look at the pension issue. It’s titled State and Local Pension Plans and Fiscal Distress: A Legal Overview. http://www.nasra.org/resources/CRS%20state%20and%20local%20legal%20framework%201104.pdf

Comment by Pacman Wednesday, May 15, 13 @ 3:42 pm
Thank you for the link Pacman. It was a very informative paper. It does hold out some hope that a federal cause of action can be found to challenge pension reduction bill under the federal contract impairment clause. It also details hurdles to the success of such a challenge, including a judicial test as to whether there is an important policy need on the part of the state to impair the pension contract.

Comment by Norseman Wednesday, May 15, 13 @ 4:43 pm
Waldi @ 2:53 pm:

That appears to be the plan, retirees 65 up are going to lose QC and all the other HMO plans. Either take the Medicare Advantage Plan at whatever cost it ends up or keep your Medicare, drop out of the State insurance, and buy your own Medigap policy. There are pending bills that have the langauge for the (unknown) Advantage programs and bills to do an emergency procurement process to get it up and running by Jan 1 … so you know the State is going to get taken advantage of (pun intended) by the insurance companies.

There’s a clear pattern here: the State is dumping any and all health insurance plans they think they can get away with … but the courts are going to have the final say before it is all over with.

Comment by RNUG Wednesday, May 15, 13 @ 4:57 pm
AFSSCME negotiated the Medicare Advantage plan for retirees. I live in Northwest Indiana to be closer to my 89 year of mother and may not have access to local care through that plan starting 1/1. Thanks again AFSCME.

Comment by retired and fed up Wednesday, May 15, 13 @ 6:43 pm
Just a head’s up to anyone interested in the pension topic … Ralph Martire will be speaking at the May 29th RSEA meeting in Springfield.

Comment by RNUG Wednesday, May 15, 13 @ 9:23 pm
Hey, Rich — one correction in your lead … the Illinois Supreme Court watcher’s name is Kirk Jenkins instead of Kurt Jenkins

Comment by Not a constitutional expert Wednesday, May 15, 13 @ 11:18 pm