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* The Illinois Supreme Court has posted its decision in Kanerva vs. Weems. Click here to read it.
The justices reversed the lower court’s decision to toss the case and remanded. Still reading.
* From the opinion…
it is clear that if something qualifies as a benefit of the enforceable contractual relationship resulting from membership in one of the State’s pension or retirement systems, it cannot be diminished or impaired. Thus, the question presented is whether a health insurance subsidy provided in retirement qualifies as a benefit of membership. […]
Giving the language of article XIII, section 5, its plain and ordinary meaning, all of these benefits, including subsidized health care, must be considered to be benefits of membership in a pension or retirement system of the State and, therefore, within that provision’s protections.
* Wow…
If they had intended to protect only core pension annuity benefits and to exclude the various other benefits state employees were and are entitled to receive as a result of membership in the State’s pensions systems, the drafters could have so specified. But they did not.
* More wow…
the drafters chose expansive language that goes beyond annuities and the terms of the Pension Code, defining the range of protected benefits broadly to encompass those attendant to membership in the State’s retirement systems. Then, as now, subsidized health care was one of those benefits. For us to hold that such benefits are not among the benefits of membership protected by the constitution would require us to construe article XIII, section 5, in a way that the plain language of the provision does not support. We may not rewrite the pension protection clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.
* Regarding the Con-Con debate…
Because we find that this issue can be decided based on the plain language of the provision, “the debates can have little or no bearing or effect” with respect to how we construe that language.
Even if reference to the convention debates were appropriate, it would not aid the State’s position. […]
In light of the constitutional debates, we have concluded that the provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them.
Emphasis added for obvious reasons. The new pension law sure appears dead to me.
* Conclusion…
For the foregoing reasons, we conclude that the State’s provision of health insurance premium subsidies for retirees is a benefit of membership in a pension or retirement system within the meaning of article XIII, section 5, of the Illinois Constitution, and the General Assembly was precluded from diminishing or impairing that benefit for those employees, annuitants, and survivors whose rights were governed by the version of section 10 of the Group Insurance Act that was in effect prior to the enactment of Public Act 97-695. Accordingly, the circuit court erred in dismissing plaintiffs’ claims that Public Act 97-695 is void and unenforceable under article XIII, section 5.
Our holding that plaintiffs are entitled to proceed on their pension protection clause claims obviates the need to address the sufficiency of their remaining claims. Because plaintiffs have obtained all the relief that they seek, any comment on their other claims would be advisory and in conflict with traditional principles of judicial restraint. See In re Alfred H.H., 233 Ill. 2d 345, 351 (2009) (recognizing that Illinois courts generally do not consider issues where the outcome will not be affected, regardless of how those issues are decided).
The judgment of the circuit court of Sangamon County is reversed, and the cause is remanded for further proceedings.
That sound you hear is the state’s bond rating collapsing.
* The final nail in pension reform’s coffin…
Finally, we point out again a fundamental principle noted at the outset of our discussion. Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner. This rule of construction applies with equal force to our interpretation of the pension protection provisions set forth in article XIII, section 5. Accordingly, to the extent that there may be any remaining doubt regarding the meaning or effect of those provisions, we are obliged to resolve that doubt in favor of the members of the State’s public retirement systems.
posted by Rich Miller
Thursday, Jul 3, 14 @ 9:01 am
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Health insurance is a pension benefit and can’t be reduced.
Comment by hold on Thursday, Jul 3, 14 @ 9:05 am
You were wondering how this decision might hint at how the court will rule on the pension lawsuit…
The “pension protection” clause 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.” In this decision, the Illinois Supreme Court held that the State’s provision of health insurance premium subsidies for its retirees is a benefit of membership in a pension or retirement system under this provision, which the General Assembly was precluded from diminishing or impairing.
And,
The Illinois Supreme Court said in this decision that it is a well settled principle that pension rights should be liberally construed in favor of the rights of the pensioner.
I’d say that settles it.
Comment by PublicServant Thursday, Jul 3, 14 @ 9:09 am
This opinion is a huge win for public labor in IL, and appears to make the decision on the upcoming pension cases a forgone conclusion.
There is little/no way to reconcile this opinion with one that would allow ANY of the pension laws to be upheld.
Comment by AlabamaShake Thursday, Jul 3, 14 @ 9:12 am
This seems to be terrific news for state workers. I especially love seeing the term “plain and ordinary meaning”. Take that, Quinn, Cullerton, Madigan (both of you) and all the rest who said that the plain language of the constitution meant something other than what it plainly says.
Comment by DuPage Dave Thursday, Jul 3, 14 @ 9:12 am
It will be interesting to see how the 2 gubernatorial candidates handle the issue of likely overturning of the pension reform law, and how they propose to pay for the increased costs. This decision seems to leave little wiggle room on how the larger issue is settled.
Comment by Six Degrees of Separation Thursday, Jul 3, 14 @ 9:14 am
So relieved. While the law and case precedence seemed clear, there is always a question when dealing with the political and personal leanings of people.
Comment by Norseman Thursday, Jul 3, 14 @ 9:15 am
Any discretionary spending that the state has made on anything other than an essential public safety and welfare function will be Exhibit A in refuting the “police power” argument. That is the only thin thread holding the pension reform from falling into the abyss.
Comment by Six Degrees of Separation Thursday, Jul 3, 14 @ 9:17 am
Constitutionality.
It was my biggest fear in any Bill that decides to take on Pensions and their protection under that document.
Quinn and Cullerton and Madigan should not be confused as to where this road map is leading.
Bruce Rauner very well may have to shut down the state government…but even locking the doors will not change what that pesky constitution…guarantees.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 9:17 am
What does this ruling do the budget that was just passed? Does Quinn have to call a special session now to redo the budget?
Comment by Angry Republican Thursday, Jul 3, 14 @ 9:18 am
I guess its time for tax increase. I also hope its time for a change in every state workers benefits package going forward. This is just unsustainable.
Comment by anon Thursday, Jul 3, 14 @ 9:18 am
Paragraphs 47/48 & 55 send a clear signal regarding SB1
Comment by Bill White Thursday, Jul 3, 14 @ 9:21 am
Did the State use any police power language in the language of the bill at issue here? Did it rely on police power arguments at oral argument? That may be a means the Court uses to decide the Pension Reform case differently.
Comment by Chi Thursday, Jul 3, 14 @ 9:21 am
@anon
No what’s not sustainable is not paying your bills the. Using my benefits as your credit card.
This is a great day for state employees. To all the haters deal with it. Keep your thieving hands off of my benefits.
Comment by Farker Thursday, Jul 3, 14 @ 9:21 am
Has anyone ever run the numbers on how large a tax increase would need to be to cover the costs that pension reform would have saved, on a similar time frame?
Comment by Anon Thursday, Jul 3, 14 @ 9:22 am
I guess that the Illinois Supreme Court isn’t such a “political body” afterall. Folks, we’re in deep trouble here.
Comment by Knome Sane Thursday, Jul 3, 14 @ 9:23 am
I have a feeling that John Cullerton is walking around saying “I told you so, I told you so” as well as he should be. He probably should have stuck to his guns earlier but maybe he knew this had to be said not just by him, Eric & Gio but by the Supremes. There is going to have to be some consideration offered to offset any reductions.
Comment by Been There Thursday, Jul 3, 14 @ 9:23 am
This means Illinois can not do ANYTHING to get its house in order… - Higher taxes are forced on everyone…
Comment by Rahm's Parking Meter Thursday, Jul 3, 14 @ 9:24 am
someone’s campaign for eliminating pensions and cutting taxes back to 3% is pretty hollow now.
Comment by PoolGuy Thursday, Jul 3, 14 @ 9:25 am
=Has anyone ever run the numbers on how large a tax increase would need to be to cover the costs that pension reform would have saved, on a similar time frame?=
It would be so large that the Tri-state heading north and south would be clogged with moving vans heading to Wisconsin and Indiana respectively.
Comment by Knome Sane Thursday, Jul 3, 14 @ 9:25 am
=== There is going to have to be some consideration offered to offset any reductions. ===
Perhaps, but Cullerton’s consideration approach was blown up today by the Supreme Court.
Comment by Norseman Thursday, Jul 3, 14 @ 9:27 am
Once again, it’s time to mention the “haircut tax” i.e., a sales tax on services. The GA’s COGFA estimates such a tax would bring in $4 to $8 billion a year depending on which services were taxed and the tax rate.
It also needs to be mentioned that the benefits are not “unsustainable”, it is the underfunding of the system over the years that put us in the spot we are in.
I agree with Farker- a great day for state employees.
Comment by DuPage Dave Thursday, Jul 3, 14 @ 9:27 am
This confirms my belief that we don’t have pension crisis. We have a State debt crisis. The state tried to concentrate all of the shortage in its “pension checking account”. There never was a difference between a bond debt and my pension. The rating agencies have known this all along. Yes, I will probably get a haircut someday…..but so will the bondholders. Please stop saying we have a pension crisis…its just propaganda.
Comment by anotherretiree Thursday, Jul 3, 14 @ 9:27 am
===There is going to have to be some consideration offered to offset any reductions. ===
I’m not sure even that’ll work.
Comment by Rich Miller Thursday, Jul 3, 14 @ 9:28 am
Sounds like the Supreme Court decision for SB1 is embedded within this ruling.
¶ 55 Finally, we point out again a fundamental principle noted at the outset of our discussion. Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner. This rule of construction applies with equal force to our interpretation of the pension protection provisions set forth in article XIII, section 5. Accordingly, to the extent that there may be any remaining doubt regarding the meaning or effect of those provisions, we are obliged to resolve that doubt in favor of the members of the State’s public retirement systems.
Comment by gunslinger Thursday, Jul 3, 14 @ 9:28 am
“This means Illinois can not do ANYTHING to get its house in order… - Higher taxes are forced on everyone…”
if they would have minimally raised taxes to 4-4.5% back in the 90’s, and actually made the pension payments, we would not be in the situation we are today.
Paul Simon in a 2003 editorial recommended raising income taxes to either 4 or 4.5% which still would have had us well below neighboring states.
Comment by PoolGuy Thursday, Jul 3, 14 @ 9:28 am
I’m happy in the short term for all my retired state-employee friends…but I don’t think this is over by a long shot. This could stir talk of bankruptcy (which renders the affirmed obligation moot) while it gives Mr. Rauner and legislative challengers a huge fan for the political flame.
Comment by Just Saying Thursday, Jul 3, 14 @ 9:30 am
Thank God the SC ruling upholds the IL Constitution! If I’m reading this correctly, the SC ruling applies to current employees as well as current retirees. Can Madigan appeal the SC decision in the federal court?
Comment by Mama Thursday, Jul 3, 14 @ 9:30 am
Let’s see Rauner force his dumb 401K on state employees now.
Comment by Macbeth Thursday, Jul 3, 14 @ 9:30 am
Cullerton was right… And another Madigan failure. Quinn chose the wrong side. That sound you hear are all the wheels coming off.
Comment by Lincoln (b)LOGger Thursday, Jul 3, 14 @ 9:31 am
I didn’t read the whole court ruling, but the problem I see with this is if you increase pension benefits (even if they are unsustainable), there is no way to revoke these benefits or take them back. The 3% COL’s increase is unsustainable and not even remotely close compared to the private sector.
Comment by Almost the Weekend Thursday, Jul 3, 14 @ 9:32 am
The court also weighed in on the changes made to health insurance after its initial inclusion as a benefit of membership in the state pension. It stated that those changes were allowed in that they were prospective only excluding current annuitants from their modifications. I see that as clearly indicating that if you are a current annuitant, SB1 will not apply to you. In addition, the ISC is clearly indicating the likelyhood of its ruling against the state regarding all aspects of SB1. Lastly, if I were a current state employee with over 20 years of experience, I’d be filing my retirement papers post haste. The good news is that there’s going to be a lot of state positions opening up soon. The bad news is that there won’t be anyone left to train up the noobs. Oops!
Comment by PublicServant Thursday, Jul 3, 14 @ 9:32 am
Keep in mind the Pension system does not need to be funded 90% like the legislature and Quinn has pushed for. In fact most Pension Systems are not even close to that number. Keep in mind that the Pension system has not caused the problem, but the constant additions of programs has caused it. Now it is time to go back and take a look at all the programs and cut them back
Comment by He Makes Ryan Look Like a Saint Thursday, Jul 3, 14 @ 9:32 am
The ruling today and the expected pension ruling should in my opinion get us to start listening to solutions presented by public unions and the likes of the CTBA. We can consider increasing revenue, new revenue streams and debt restructuring.
The unions did get an ear with SB 2404 and a stab at the legislative process, but perhaps even that even that reform would be found unconstitutional.
Comment by Grandson of Man Thursday, Jul 3, 14 @ 9:32 am
======There is going to have to be some consideration offered to offset any reductions. ===
I’m not sure even that’ll work.=====
But I thought Cullertons deal had the unions, or least most of them, on board? I would think that would at least cut down on the level of legal talent being paid to fight any challenge.
Comment by Been There Thursday, Jul 3, 14 @ 9:34 am
“if they would have minimally raised taxes to 4-4.5% back in the 90’s, and actually made the pension payments, we would not be in the situation we are today. ”
The first part of this statement is not true. the second is very true.
Just raising taxes and giving the spenders in the ILGA more money int he 90’s doesnt meant they wouldn’t have spent that also and STILL borrowed by not paying.
They have not payed for a long time. We have no time machine to jump back to the 90’s. Today we have what we have and its time to pay the piper.
Comment by RonOglesby - Now in TX Thursday, Jul 3, 14 @ 9:34 am
Not sure that the bond rating will drop. My guess is, the rating agencies have already taken this into account. It is easy in hindsight to say I-told-you-so, but the lower court’s ruling really didn’t pass the sniff test. Health care benefits are something of value and they were negotiated via collective bargaining. With that in mind, what part of the state constitution don’t you understand? Same thing is going to happen with the pension lawsuit.
If you don’t like what the constitution says, then change it. Until then, shut up about so-called pension reform via legislative fixes. That’s yesterday’s smoke and mirrors.
Comment by Anonymous Thursday, Jul 3, 14 @ 9:35 am
Was the decision unanimous? Where are Madigan’s 4 votes?
Comment by Casual observer Thursday, Jul 3, 14 @ 9:35 am
This really shouldn’t be a surprise to anyone. Don’t make promises you don’t intend on keeping.
Comment by Capo Thursday, Jul 3, 14 @ 9:38 am
=== But I thought Cullertons deal had the unions, or least most of them, on board? I would think that would at least cut down on the level of legal talent being paid to fight any challenge. ===
That was a desperate attempt by the unions to stave off worse reductions. With this ruling, any union official agreeing to a bill reducing benefits would be thrown out by their membership.
Comment by Norseman Thursday, Jul 3, 14 @ 9:38 am
This decision may ultimately be “too wow”.
“the debates can have little or no bearing or effect” with respect to how we construe that language.
It still may be otherwise construed. I’d hold off on that balloon drop. I’m not a lawyer, but this one might not be as tight on basis as one would hope.
It’s a math problem. If this empowers people to come to the table and really work out an economically sustainable solution, it will have served a great purpose. If it empowers beyond that, there are very troubled seas ahead of us.
Comment by A guy... Thursday, Jul 3, 14 @ 9:39 am
No - I was wrong.
It will not be either/or.
It has to be both tax increases along with cuts.
Comment by VanillaMan Thursday, Jul 3, 14 @ 9:40 am
So, a six or seven percent income tax then? (Cue massive backlash from the private sector) Ending Illinois’ practice of outsourcing state functions and hiring more workers so that you have more people paying into the system? (Cue massive backlash from the nonprofit social service sector) etc. etc.
Comment by Angry Chicagoan Thursday, Jul 3, 14 @ 9:40 am
The decision was decided 6 - 1
Comment by Bill White Thursday, Jul 3, 14 @ 9:41 am
===Was the decision unanimous? Where are Madigan’s 4 votes? ===
Only Ann Burke in dissent
Comment by Been There Thursday, Jul 3, 14 @ 9:41 am
been there ==But I thought Cullertons deal had the unions, or least most of them, on board?==
The unions don’t have standing. Its not a union benefit. Its a contract between the state and I( * 50,000). They have to get a concession from each of us. Its no different than if I owned a bond. The other posting about changing the constitution also misses the fact that the federal constitution prevents altering contracts.
Comment by anotherretiree Thursday, Jul 3, 14 @ 9:42 am
===With this ruling, any union official agreeing to a bill reducing benefits would be thrown out by their membership.===
Spot-On.
The leverage granted by this ruling makes it quite clear; no retreat, no surrender.
The problems of the state fiscal are not the problems of the pensioners. Any “Union Boss” negotiating any retreat or surrender is clueless at this point moving forward.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 9:42 am
MJM had a deal starring him in the face that would have saved significant money in the short run and still provided health care savings, kept labor peace and oh btw would have got more votes than SB 1. The man is losing his touch. That sound you hear is the curtain falling in the land of Oz.
Comment by Obamas Puppy Thursday, Jul 3, 14 @ 9:42 am
I didn’t realizing that asking retirees to pay a whooping 2% of their annuity for healthcare was asking a tremendous amount. What angers me is that this decision sets a course that is tremendously unfair for the rest of the citizens in IL - now the retirees become the special 1%, and everyone else suffers. This just furthers the notion (true or not) that retirees are greedy and have no regard for the rest of the citizens.
This doesn’t just impact the state - Chicago and other government units are going to suffer. The politicians better get ready to take some really, really hard votes, and the taxpayers get get ready to pay 5-10% more across the board.
Comment by summertimeblues Thursday, Jul 3, 14 @ 9:42 am
=Was the decision unanimous? Where are Madigan’s 4 votes? =
I’m sorry, but this is flat-out offensive to me. Madigan owns no one on this court. Anyone who knows any of these justices or follows the Court is fully aware of that. As for the voting, read the opinion.
Comment by Archiesmom Thursday, Jul 3, 14 @ 9:43 am
Been There — exactly what I was going to say. Folks should be sending apology greeting cards to Cullerton. Obviously, there’s an upside of treating it like a math problem rather than a legal question, but let’s be real, the constitutionality was always the biggest factor.
Comment by Lurker Thursday, Jul 3, 14 @ 9:44 am
As a retiree, I am going to hold off celebrating….although I really am looking for any excuse to keep from climbing on the rider today. The ISC decision would be a good excuse to break out the bubbly, but another part of me is just as concerned about the fallout that is surely coming.
I’m not sure if state employees/retirees will ever be out of the spotlight that we never wanted to be in.
Comment by redleg Thursday, Jul 3, 14 @ 9:45 am
I don’t claim to know anything about pensions, but it seems to me that one logical thing to do following this decision is to take a second look at the Edgar pension ramp. Would it make sense to re-amortize this debt, stretch it out over a longer period of time, and try to make the payment plan more sustainable?
Comment by Old Shepherd Thursday, Jul 3, 14 @ 9:46 am
Maybe now people will listen to Ralph Martire?
Comment by Chi Thursday, Jul 3, 14 @ 9:50 am
Maybe someone will listen to Ralph now?
Comment by Former Merit Comp Slave Thursday, Jul 3, 14 @ 9:55 am
Time to tax sale of option contracts.
The CME got their big tax break.
Time to make their customers pay for it.
Comment by Carl Nyberg Thursday, Jul 3, 14 @ 9:55 am
All the justices except Burke voted for the opinion?
Pretty forceful statement.
Comment by Carl Nyberg Thursday, Jul 3, 14 @ 9:57 am
All the justices except Burke voted for the opinion?
Pretty forceful statement.
Comment by Carl Nyberg Thursday, Jul 3, 14 @ 9:57 am
Let’s just hope this serves as a wake up call for the GA, and the adults can come up with a plan to right this ship. I would think step 1 would be to put all new employees on a direct contribution plan for political reasons ( I know this would hurt the pension plan short term). Restructure the debt over a longer and now finite window with no new beneficiaries, and bring on board a revenue increase through a service tax or some other means.
Comment by iThink Thursday, Jul 3, 14 @ 9:57 am
===one logical thing to do following this decision is to take a second look at the Edgar pension ramp. Would it make sense to re-amortize this debt, stretch it out over a longer period of time, and try to make the payment plan more sustainable? ===
I agree. The math on this w,hole pension debate, especially by so called “experts” has been all over the board. And while I agree that pension benefits should not be diminished, there are different ways to calculate what is owed. The 3% COLA nor health care are not in the constitution and can be changed going forward. Doesn’t save as much but you can bet that will be on the table.
This appears a boon to existing retirees and existing employees with long tenure but new or short term employees are going to be asked to take less.
Comment by Been There Thursday, Jul 3, 14 @ 9:58 am
If the state has money to waste on Illiana and JJJ’s airport… it’s galling that pensions are expected to be cut so Illinois politicians can distribute money to the political class.
Comment by Carl Nyberg Thursday, Jul 3, 14 @ 9:59 am
Those stoking the “raise taxes” meme as the only way solution to the state’s revenue problems - how about we start talking about a graduated income tax like the majority of states have in place. This would raise revenue AND cut the tax rates of the majority of Illinois residents. It’s time we start focusing on a solution to the state’s revenue problem rather than blaming people for benefits their earned.
Comment by Adoks Thursday, Jul 3, 14 @ 9:59 am
==Now the reason Rauner scares everybody so much is that he knows the Constitution needs to be changed, and he is going to change it. The people will change it. And that is what is going to happen. Period.==
Even if they do, it wouldn’t effect the people currently in the system.
Comment by iThink Thursday, Jul 3, 14 @ 9:59 am
A short-term win for the public employee unions. A long-term loss for the voters and citizens of Illinois.
Comment by Apacolypse Now Thursday, Jul 3, 14 @ 9:59 am
Boom!
They have made a clear decision.
One quibble with the decision — it is NEVER irrelevant to review the debates on language in a law to confirm what the legislators intended to mean by the words they chose to use. Even when it appears obvious now.
They might be right that it wouldn’t have made a difference in this decision, but their statement that original debates and intentions are to be ignored, is plain stupid for a jurist.
Comment by walker Thursday, Jul 3, 14 @ 10:00 am
===So the answer is that there are going to be some changes to the Constitution. Period.===
Ok, with no convention in the short term, nothing on the ballot requesting that convention, where and when are these changes coming from Bruce Rauner…”soon”?
===Now the reason Rauner scares everybody so much is that he knows the Constitution needs to be changed, and he is going to change it. The people will change it. And that is what is going to happen. Period.===
It’s tough being ill-informed.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 10:00 am
I know this imight be loosely connected to the ruling, but does the ruling apply to $17.00+ per month I now have to pay for dental insurance? I was promised dental insurance when I retired.
I don’t mean to appear greedy, but I remember discussions about how making retirees pay for this insurance was “testing the waters” to see what the State would be allowed to get away with.
If they tried to make retirees start paying for this insurance after today’s ruling, I don’t think they would be successful.
Will they have to roll this back and refund our years worth of premiums like they are going to have to do with the 2%-4% health premiums they have been withholding?
Comment by Jechislo Thursday, Jul 3, 14 @ 10:00 am
I’ve said for some time now the easiest case in the state is to represent the unions against pension reform. The justices just said, “shall not be diminished” actually means “shall not be diminished.” Pension reform is dead. The budget hole just got even bigger.
In short, we’re all screwed!
Comment by Chicago Cynic Thursday, Jul 3, 14 @ 10:01 am
Mr. Big Shot Attorney, has Bruce Rauner said he will amend the Illinois Constitution so the state can cut pensions of public employees?
If Rauner has said that, I’m sure the Quinn campaign will be happy to play that video over-and-over again so the Illinois voters know what they are voting on.
Comment by Carl Nyberg Thursday, Jul 3, 14 @ 10:01 am
I’m not sure if state employees/retirees will ever be out of the spotlight that we never wanted to be in.
Completely agree with you, redleg. We as retirees or current state employees never asked for all of this negative attention or to be blamed for the state’s fiscal problems when we in fact have never been the cause of the problem. I have been a lifelong IL resident and also worry greatly about our state’s future, but please lay the blame for our current problems where it deserves to be and not on us retirees.
Comment by Larry Thursday, Jul 3, 14 @ 10:01 am
Archiesmom, the entire court should have been offended when Madigan brazingly claimed to have 4votes.
Comment by Casual observer Thursday, Jul 3, 14 @ 10:01 am
Not only a great day for state employees but a great day for all the citizens of Illinois. Our courts will uphold our constitutional rights.
Comment by Anonymous Thursday, Jul 3, 14 @ 10:02 am
===This decision just nailed the coffin shut on PQ and assured a win for Rauner in November. Change is in the wind. Guaranteed.===
All this decision did was put into clear focus that Quinn, Cullerton, Madigan, and even “no plan” Rauner, right now have no idea what might be the next step.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 10:04 am
===Time to tax sale of option contracts.===
You think Walgreens looking to move its headquarters to Europe is a big thing? The CME will be out of Illinois quicker than you can blink. They might be out of here either way someday.
Comment by Been There Thursday, Jul 3, 14 @ 10:04 am
This is a tremendous victory for the Rauner camp. I cannot think of any other single action that could have helped him any more than this decision. He will ride this horse across the finish line. Whooping and hollering all the way. You just watch. Watch and learn.
Comment by Mr. Big Shot Attorney Thursday, Jul 3, 14 @ 10:06 am
My tin foil hat is on.. Is Plan B always been to open up the constitution? Somebody tell me when and how that can be put on the ballot? In these times and the simple math problem. If you ask the voters to open the constitution to change these benefits… How difficult to get that done? Maybe I am naive, but if the average voter is on the hook. My money say’s they have a real shot. And please remember..I am in a system. I would rather know now that this promise will not be kept, while I can still earn. Don’t touch people retired, or within a few years..But change guys like me.. We can’t afford this..
Comment by Walter Mitty Thursday, Jul 3, 14 @ 10:07 am
My expectation is that next year CMS will be announcing major increases in copays & deductibles and maximum coverage limits.
On down the road — when the 5-year contracts with insurers are up for renewal — expect HMO choices to be further reduced or eliminated entirely, leaving retirees with only the misnamed “Quality Care.”
Comment by Curmudgeon Thursday, Jul 3, 14 @ 10:07 am
Perhaps some of the real lawyers and the fake lawyers out there can weigh in, but can’t the SB 1 case be remanded to federal court and put it on track to be heard by the US Supreme Court? Seems like that’s a far less labor-friendly venue.
Comment by The Elderly Man You Used to Love Thursday, Jul 3, 14 @ 10:07 am
Summertimeblues– There could be an argument that the taxpayers benefited from getting all the social programs etc. that was paid for by NOT funding the pensions. It is understandable that you would blame the State Employees, when in fact the people that should be blamed are the people YOU elected.
Comment by He Makes Ryan Look Like a Saint Thursday, Jul 3, 14 @ 10:07 am
=== Somebody tell me when and how that can be put on the ballot?===
A simple Google search would turn up an answer of two years from now. Try that first before asking questions here. Thanks.
Comment by Rich Miller Thursday, Jul 3, 14 @ 10:07 am
The Senate, working with the Union, crafted a bill that would have saved the state $40+ billion if I remember correctly, but Madigan refused to call the bill for a House vote.
I wonder of this was just a big miscalculation by Madigan, or if he figured all along that the court would make this ruling and it was just part of a larger political strategy.
I guess at some point the retirees that began paying 2% towards premiums a year ago are going to see a reimbursement. My understanding is that money was being held in escrow until a ruling was made so it won’t be coming out of the state Treasury.
Looking forward, it’s going to take a combination of budget cuts and increased taxes on everyone to balance the budget. Remember that the pension reform bill alone would not have fixed Illinois fiscal problems and now that’s gone. I am expecting the state to push to starting taxing retirees pension benefits down the road, but if you’re a retiree, that will do much less damage to their standard of living than what the pension reform bill would have done. I agree with others in that the pension reform bill is dead.
Comment by The Dude Abides Thursday, Jul 3, 14 @ 10:08 am
===Read again my credentials.===
Raunerbot? Yeah, I got that, thanks.
Your credentials mean little, it’s the argument you make that has the weight here. That’s how it works.
Rauner would rather lock out employees than understand the constitution. Learn. It ain’t hard.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 10:08 am
**Now the reason Rauner scares everybody so much is that he knows the Constitution needs to be changed, and he is going to change it. The people will change it. And that is what is going to happen. Period.**
How, exactly, is Rauner going to change the pension clause of the constitution? By executive order? By fiat?
**Read again my credentials.**
LOL
Comment by AlabamaShake Thursday, Jul 3, 14 @ 10:09 am
For those that are upset and make claims of unfairness to other citizens of the state, know that this a legal decision, and in my view the decision was proper. If the state makes commitments, it needs to keep them. If the constitution has plain-language protections, that’s how you read them. The pols have for too long pandered for votes and power with taxpayer money. Now, maybe some of the pandering will be stopped. Cut useless programs, restructure debt as best it can be done, and create a climate for an improved state economy and commit that improved revenue to righting the ship rather than returning to more useless programs. Too much to hope for?
Comment by Mister M Thursday, Jul 3, 14 @ 10:09 am
WOW! Much stronger than I had expected or even hoped. Need to go finish reading it …
Comment by RNUG Thursday, Jul 3, 14 @ 10:09 am
@mr big
Surely since your so smart you do realize that any change in the constitution would only affect new hires. Every person currently in the system wouldn’t be affected. So no savings. Please try again.
Comment by Farker Thursday, Jul 3, 14 @ 10:11 am
Sorry… I guess I meant more of that being the next logical step…
Comment by Walter Mitty Thursday, Jul 3, 14 @ 10:11 am
- Almost the Weekend - Thursday, Jul 3, 14 @ 9:32 am:
The 3% AAI is sustainable and has actually been paid for by the employees contributing either 0.5% or 1.0% (depending on the system) specifically earmarked for the AAI benefit. What is unsustainable is the State continuing to fail to pay their portion and to fail to repay the “skipped/shorted” payments.
Comment by RNUG Thursday, Jul 3, 14 @ 10:11 am
Thanks to AFSCME, IFT, and IEA for continuing to fight for public employees and retirees while other unions and many liberal Democratic legislators failed to do so.
Steelerfan
Comment by Steelerfan Thursday, Jul 3, 14 @ 10:12 am
Che Rauner! ¡Viva la Revolución!
Can I have the T-shirt concession? Please?
Comment by Bill White Thursday, Jul 3, 14 @ 10:12 am
It looks like Quinn is in the Cat Bird seat - the Unions will support him now that they know retirees wont be touched. Rauner is the looser in this since retirees know he is out to get them. They wont vote for him.
Comment by georgeatt Thursday, Jul 3, 14 @ 10:12 am
We have had two powerful trends killing us here. We have a retiring generation substantially larger than the subsequent generations and we have a shrinking government employee base, even in light of the escalating growth of state government.
My agency has a fraction of employees from just a decade ago. Yet the work load is actually increasing. Thanks to technologies, we’re surviving. But what it took a dozen employees shoving and faxing papers around two decades ago, is now done by one single employee and a mobile phone. So we have thousands fewer employees contributing into systems being swamped by retirees who used to shove and fax those papers.
When the Edgar pension ramps were set up, these obvious trends were a major reason they were set up. What we did not expect was two economic recessions, one in 2000 and the other in 2007. We did not expect Illinois to fail to recover economically after each of these recessions. Instead of historical Illinois economic growth, we see Illinois barely plateauing after each recession.
This means that the Edgar pension ramps couldn’t be funded. They couldn’t be funded due to the increased dire citizen needs during each recession, and we never got the recovery bounce to pay for the debt each recession created.
Imagine for a moment, our economic situation if there was no economic downturns between the Edgar Pension Ramps and today? We would not be in the fix we are in - at all. The Pension Ramps were needed to catch the largest generation in world history’s retirement and survive. Our economics didn’t allow it.
Blagojevich needed to have raised taxes, but he wanted to campaign as a non-tax-raising Democratic for president. When we needed the tax increase after the 2000 dot-com bust, we had a lazy, incompetent, corrupt, nationally ambitious governor preventing it from happening.
By the time we lose Blagojevich, we are so far behind in state debt and costs, it was obvious by 2005 that we couldn’t craft a budget seriously, yet had that jack-hole lounging in his jogging suit, diddling with SEIU for another two years.
The worse thing happened in 2007 when the Great Recession hit. We couldn’t have been less prepared. We had a string of unsustainable budgets, another governor heading for prison, and thousands of state employees retiring while the total number of state employees shrunk phenomenally.
In short - we got bad timing all around. We are trying to survive the perfect storm of governmental corruption, incompetence, economic stagnation and increasing citizen need. We got slammed folks!
Quinn, if reelected, will have his hands still tied by Mr. Speaker. Mr. Speaker is petrified of losing his political power and won’t make risks, especially by the bumbling Mr. Quinn. If Rauner is elected, Madigan might be able to convince a new governor to take a tax increase hit in his first year in order to make the state’s fiscal condition solid enough for a reelection in 2018.
We also need to consider taxing the largest generation of retirees to help offset their escalating costs. Other states do this. It could be considered more fair to citizens than jacking up the taxes of working Illinoisans.
Comment by VanillaMan Thursday, Jul 3, 14 @ 10:14 am
===Now the reason Rauner scares everybody so much is that he knows the Constitution needs to be changed====
Unfortunately for Rauner the Constitution needs to be changed so we can have a graduated income tax.
Comment by Been There Thursday, Jul 3, 14 @ 10:14 am
- The Elderly Man You Used to Love - Thursday, Jul 3, 14 @ 10:07 am:
The U.S. Supreme Court has no authority to interpret provisions of the Illinois Constitution unless those provisions arguably violate provisions of the U.S. Constitution.
Comment by Bill White Thursday, Jul 3, 14 @ 10:15 am
As long as our elected officials can keep their generous pay and benefits, while ensuring that their friends, family, and supporters get THEIR piece of the taxpayer’s money, all is good. Why should they change anything?
Comment by status quo Thursday, Jul 3, 14 @ 10:16 am
Time for the Chicago Casino!
Carl, option contracts aren’t being taxed any time soon.
Comment by Jose Abreu's next homer Thursday, Jul 3, 14 @ 10:16 am
I am sorry… I do not think this is any cause for celebration. If everyone has to pay for the benefits for the teachers for instance. As I mentioned yesterday when IEA backed Quinn. They are better served staying quiet… When tax payers see the reality of what it will cost them… There will be more animosity toward these groups…
Comment by Walter Mitty Thursday, Jul 3, 14 @ 10:16 am
- Been There - Thursday, Jul 3, 14 @ 9:58 am:
The terms going forward were already changed in 2011 … it’s called “Tier 2″.
Comment by RNUG Thursday, Jul 3, 14 @ 10:17 am
I think this ruling actual helps PQ because it takes the whole pension/health care benefit issue off the table.
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 10:19 am
- Jechislo - Thursday, Jul 3, 14 @ 10:00 am:
No, dental insurance was never a “free” benefit; it was optional coverage you could decline. You always paid for it from day 1 as an employee or a retiree.
Comment by RNUG Thursday, Jul 3, 14 @ 10:19 am
=In light of the constitutional debates, we have concluded that the provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them.=
This seems to be the court making clear the pension issue is settled…no police powers argument please.
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 10:20 am
WE may still be a land of laws… a big win for every citizen of Illinois.
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 10:21 am
RNUG, what is your take on how this effects local govt. pension reform?
Comment by Raising Kane Thursday, Jul 3, 14 @ 10:21 am
I’m not making any plans for next June, July or Agust. . .
Comment by Todd Thursday, Jul 3, 14 @ 10:22 am
The Illinois Supreme Court is NOT a political body!!! Of course Anne “Ed” Burke is the exception!
Comment by thehofly Thursday, Jul 3, 14 @ 10:22 am
Where’s RNUG when we need him?
Mr. Big Shot Attorney, I hope you are right. I have no dog in the fight for governor, but watching Rauner deal w/ the union contracts, MJM, a hostile General Assembly, and the courts forcing him to adhere to the IL Constitution would be fun.
It doesn’t look so far on the map, but you’re MILES away from your heroes in Indiana and Wisconsin, Bruce.
Comment by LincolnLounger Thursday, Jul 3, 14 @ 10:22 am
===The 3% COLA nor health care are not in the constitution and can be changed going forward.===
(1) Not for current annuitants for sure.
(2) The court ruled that Healthcare is definitely a benefit of membership in the pension system. Certainly, current annuitants relied on that in making an irrevocable decision to retire. I see no reason to assume that the AAI, which is much more related to the pension itself than is healthcare premiums, will not be ruled a pension benefit too.
What isn’t clear, however, is why was it remanded if the Supremes already clearly spelled out things?
Also, not clear is whether changes to the AAI and healthcare premium for current employees who are not yet annuitants is ruled unconstitutional under the pension clause. I would think it likely would be, but the language used by the ISC in this case, while slamming the door on changes to current retirees, seems to use prospective changes to “new annuitants” as being possible.
Wait for RNUG to quit playing tour guide and weigh in here too…
Comment by PublicServant Thursday, Jul 3, 14 @ 10:23 am
“but can’t the SB 1 case be remanded to federal court and put it on track to be heard by the US Supreme Court?”
There has to be a federal issue in question for it to go to the federal courts, and I don’t see any federal issue that arrises out of this decision.
Comment by Pelon Thursday, Jul 3, 14 @ 10:24 am
- The Elderly Man You Used to Love - Thursday, Jul 3, 14 @ 10:07 am:
Probably not; this is a clear issue of a State as employer dealing with it’s employees. Federal law doesn’t begin to come into it UNLESS you are talking about violating contracts. When it is a State dealign with it’s own employees (as opposed to private sector citizens), the Feds will defer 99.999% of the time to the State court systems, usually under State’s Rights logic.
Comment by RNUG Thursday, Jul 3, 14 @ 10:24 am
=One quibble with the decision — it is NEVER irrelevant to review the debates on language in a law to confirm what the legislators intended to mean by the words they chose to use. Even when it appears obvious now.
They might be right that it wouldn’t have made a difference in this decision, but their statement that original debates and intentions are to be ignored, is plain stupid for a jurist.=
In most cases, if the plain language answers the question, you don’t need to go back to the debates to deal with the intent of the drafters. To them, it wasn’t necessary, therefore not relevant to their decision. It isn’t ignoring the debates, you just don’t need to go there. Nothing stupid about it - just the way that these cases are decided.
Comment by Archiesmom Thursday, Jul 3, 14 @ 10:24 am
This is the correct decision. It is also the Supreme Court declining to give the General Assembly a pass for years of mismanagement and the lack of political will to raise taxes. The General Assembly has the tools — the taxing power chief among them — to fund these pensions fully. As long as it has that power, it is not going to be off the hook for being too timid to use it.
Comment by Levi Thursday, Jul 3, 14 @ 10:26 am
“Completely agree with you, redleg. We as retirees or current state employees never asked for all of this negative attention or to be blamed for the state’s fiscal problems when we in fact have never been the cause of the problem. I have been a lifelong IL resident and also worry greatly about our state’s future, but please lay the blame for our current problems where it deserves to be and not on us retirees.”
I don’t agree that the retirees and state employees don’t have any input to the problem, since benefits and pensions do cost money, and some may consider them too expensive for the state.
I have a problem with the disproportionate attack on retirees and public unions. They at best only have a share in causing the problem, but not the overblown share that their adversaries ascribe to them.
Public employees and their unions should not be one of the few major scapegoats for this problem, and when they are, I feel compelled to respond. Certain organizations and individuals make it their mission to attack public unions, and I’d wish they’d back off, but they won’t. They’ll keep screaming out the talking points about how people are leaving the state, and how the wealthy are being crucified by small income tax increase proposals and modest minimum wage increase plans.
This is a pretty good week for public unions, even with the SCOTUS decision. The right to collect dues for traditional employees still stands, and now we have today’s decision.
Comment by Grandson of Man Thursday, Jul 3, 14 @ 10:26 am
“- Mr. Big Shot Attorney - Thursday, Jul 3, 14 @ 10:06 am:
This is a tremendous victory for the Rauner camp. I cannot think of any other single action that could have helped him any more than this decision. He will ride this horse across the finish line. Whooping and hollering all the way. You just watch. Watch and learn.”
Dude, you’re on crack. This presents an even bigger problem for Rauner because more pressure will be put on him to put up or shut up on fiscal matters. His “budget blueprint” pamphlet just ain’t gonna cut it.
Comment by Chicago Cynic Thursday, Jul 3, 14 @ 10:27 am
=the entire court should have been offended when Madigan brazingly claimed to have 4votes. =
Brazenly (autocorrect hiccup?). And I’m sure they were.
Comment by Archiesmom Thursday, Jul 3, 14 @ 10:27 am
Rich under Culleton’s consideration proposal, the employees are voluntarily giving up the benefits in exchange for something else. So I disagree - I think his concept may pass the SC test.
Comment by siriusly Thursday, Jul 3, 14 @ 10:28 am
- Raising Kane - Thursday, Jul 3, 14 @ 10:21 am:
Pension reform by local governments for existing employees / retirees is dead in the water also.
Comment by RNUG Thursday, Jul 3, 14 @ 10:30 am
After reading Burke’s dissent, I think she would also vote against SB1, which would make a decision against it unanimous.
Comment by Archiesmom Thursday, Jul 3, 14 @ 10:30 am
The constitution can be changed, but the changes cannot be applied retroactively. The U.S. And IL constitution have ex post facto clauses.
Comment by Pacman Thursday, Jul 3, 14 @ 10:31 am
It was hard to get worked up about the issue when this was the obvious result. It’s not the fault of state workers–it’s the fault of the Lege not funding the funds correction. And no, the public aren’t getting rich in retirement. It’s entirely sustainable if you actually make the payments on the state side. Now the state will have to catch up even more meaning a tax increase and borrowing some sort of balloon payment that is paid back over time. Which is exactly what people have been saying for years.
Comment by ArchPundit Thursday, Jul 3, 14 @ 10:31 am
@chicago
It appears Mr Big is just a troll who claims to be an attorney yet doesn’t understand the constitution. Apparently his JD is from a Cracker Jack box.
Comment by Farker Thursday, Jul 3, 14 @ 10:32 am
@Elderly,
I think it is 90% likely the US Supremes would decline to even hear the case, based on the lopsided ISC opinion and the reticence of the US Supremes to interfere with public agency contract law decisions at the state level for the past 200 years or so.
Comment by Six Degrees of Separation Thursday, Jul 3, 14 @ 10:32 am
siriusly - Thursday, Jul 3, 14 @ 10:28 am:
“Rich under Culleton’s consideration proposal, the employees are voluntarily giving up the benefits in exchange for something else. So I disagree - I think his concept may pass the SC test.”
As long as “something else” includes a choice to keep my benefits exactly as they are now - and be able to reject anything offered by the State.
RNUG - Thanks for the clarification on my question.
Comment by Jechislo Thursday, Jul 3, 14 @ 10:33 am
@siruisly
Cullertons deal is off the table. The unions won’t budge after this ruling. Woulda shoulda coulda
Comment by Farker Thursday, Jul 3, 14 @ 10:34 am
===- Mr. Big Shot Attorney
Just a wild guess, but I think BSA might be satire.
Comment by ArchPundit Thursday, Jul 3, 14 @ 10:34 am
- siriusly - Thursday, Jul 3, 14 @ 10:28 am:
Nope, Cullerton’s proposal would not have passed muster for contractual alteration / consideration because it did not allow “keep what you have” as one of the choices; all it allowed was do you want your arm cut off or your leg cut off?
Comment by RNUG Thursday, Jul 3, 14 @ 10:35 am
I don’t think “consideration” is a consideration any longer. When it comes to contracts, what it was, what it is.
Comment by wordslinger Thursday, Jul 3, 14 @ 10:37 am
Raising Kaine, the pension protection clause includes “any unit of local government or school district, or
any agency or instrumentality thereof,”
Comment by Archiesmom Thursday, Jul 3, 14 @ 10:37 am
Back in a few hours … going off to read the entire opinion with a highlight and red pen.
Comment by RNUG Thursday, Jul 3, 14 @ 10:38 am
The Governor should withhold the paychecks of the Justices until they rule in the manner he would like….
Comment by chicon Thursday, Jul 3, 14 @ 10:39 am
anontherretiree- thanks for pointing out that “the unions” have nothing to do with the pension guarantee in the constitution. The contract is between the state and me and the state and you and the state and thousands of other individuals.
Cullerton or any other politician can’t negotiate with “the unions” about the contract between the state and me.
I think the decision today clearly upholds those thousands of individual commitments. None of which involves a union.
And all of you cheering this ruling as a boon to Rauner- remember if he wins he has to find a way to pay for all this. He can’t refuse to answer the questions of kick the can down the road. It will require some real leadership.
Comment by DuPage Dave Thursday, Jul 3, 14 @ 10:41 am
RNUG,
How does this ruling effect current employees when they retire? Lets say you have 10 years in now and retire in 5 years or 20 years now and retire next year, for example. Always figured if retired before law changed should be safe, but does ruling protect any employee that was hired with the 20 year free premium health care?
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 10:41 am
Thank goodness, - RNUG -.
Those thinking this is good for Rauner, bruce had been touting a 401(K) solution.
Think that is even close to being constitutional, given where this ruling points.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 10:44 am
- facts are stubborn things - Thursday, Jul 3, 14 @ 10:41 am:
Need to read the whoile thing before I can answer my opinion …
Comment by RNUG Thursday, Jul 3, 14 @ 10:44 am
For better or worse, I think this is problematic in several ways. First, its effect on the state budget, here and now as to employee health care (which currently has a backlog of bills to be paid of over $1 Billion), and even more so if this first look does actually mean SB1 is doomed. Second, it will make ordinary citizens even more skeptical and envious of state employees and retirees. Third, it virtually eliminates incentive and potentially even the ability for the state unions to compromise.
In today’s world, a very different world from when the promises were made, it’s impossible to defend (other than to say “we were promised”) no individual contribution to retiree health costs. We were promised too much. Our special statues in that regard clearly appears unfair to most voters. I thought what was implemented was reasonably fair and could have been made more fair with a tweak or two.
I agree that the current pension system is sustainable, but it will be budgetarily painful without some changes. People should look again at Fortner’s bill (minus the now probably unconstitutional pensionable salary cap).
And now, why should the unions agree to giving up an additional 2% employee contribution (would their members even allow them to) which could have been a significant part of a constitutional solution.
It’s hard as a beneficiary to not cheer this ruling, but it’s equally hard as a citizen and taxpayer to not grieve for lost opportunity, or at least lost time.
Comment by steve schnorf Thursday, Jul 3, 14 @ 10:45 am
After reading the opinion, it’s hard to see any future changes being forced on existing retirees. New employees in the various retirement systems will have to bear the brunt of the savings required to right the State’s fiscal ship.
This was a huge win for attorneys John Meyers and Don Craven of Springfield. Slam dunk. It was also a huge slam to Judge Nardulli. He didn’t think any of the plaintiffs even had a case. When the Supreme Court decides that plaintiffs had an actual case, and rules for them convincingly, it’s probably time to retire…or go back to law school and audit Con Law 101. Judge Nardulli’s seat mate probably should be Barack Obama brushing up on executive appointments and seperation of powers.
I had concerns about this case back when the judge first dismissed it. Since his wife is a prominent lobbyist, he probably should have bounced it. But, with every judge an annuitant, and Sangamon County judges swimming in a pool of friends and family in the various pension systems, there was always bound to be the appearance of a conflict.
Comment by sangamon gop Thursday, Jul 3, 14 @ 10:45 am
===The terms going forward were already changed in 2011 … it’s called “Tier 2″.====
I know that but there could even be a worse plan going forward.
Comment by Been There Thursday, Jul 3, 14 @ 10:47 am
@- RNUG - Thursday, Jul 3, 14 @ 10:44 am
Thanks
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 10:48 am
This ruling kinda shocks me. Not just the timing but the overwhelming support the ruling had from the justices. This opens several cans of worms one being we may see another retirement exodus of state workers.
Comment by Jorge Thursday, Jul 3, 14 @ 10:50 am
(I know, I know, do not feed the trolls, but here I go again.)
Mr. Thinks He’s a Big Shot Lawyer: Picture the Quinn ad: “Bruce Rauner wants to change the Constitution to short-change retirees who worked hard to earn and pay their fare share into the Pension system while he uses a tax loop-hole to avoid paying into Social Security.” Yup. Slam dunk-er-oo.
Comment by Skeptic Thursday, Jul 3, 14 @ 10:57 am
To the Raunerbots:
In terms of the election, this MAY help Brucie, but I don’t see how this helps him at all in any longer term than that. What endgame is there for Rauner that doesn’t have him impeached/incarcerated/disgraced/otherwise not enjoying the lifestyle he does today?
Comment by GraduatedCollegeStudent Thursday, Jul 3, 14 @ 10:58 am
So we can open the constitution for pensions, but since the change is not retroactive, it does little to fix the state’s budget shortfall. On the other hand, we open the constitution and add a graduated income tax on millionaires, we get budget relief as soon as it takes effect. Now generally I am against tax increases of any kind regardless of income level. But I am also a state employee and I didn’t start this fight. The millionaires of the Chicago Civic Club started it. So a graduated tax on people like Rauner who want to buy the Governor’s office? I would be happy to vote for that.
Comment by Jack Thursday, Jul 3, 14 @ 10:59 am
RNUG, while you’re drilling into this, let me konw what you thiink of the dissent. I thought Justice Burke raised a couple interesting points, not the least of which is “where do we go from here?, more or less.
Comment by Arthur Andersen Thursday, Jul 3, 14 @ 11:00 am
@ Mama: “Can Madigan appeal the SC decision in the federal court?”
No. The federal courts do not get involved when a case is decided solely on the basis of state constitutional law.
Comment by Joan P. Thursday, Jul 3, 14 @ 11:00 am
Sb1 was saving about $1.2 billion a year compared to the pension cost under the Ramp, prior to reform. Some of the reforms may still be legal, such as the accounting changes and the changes that did not impact beneifts.
The sky is not falling.
Further, changing the benefit plan of the health insurance may be ok, even if changing the premium share is not. This could also retain much of the savings from the health insurance bill.
Folks need to look at the realistic costs of this stuff and not react to hyperbole. In the end, pension costs without SB1 may cost less than 1/2 % on the income tax.
Comment by Archimedes Thursday, Jul 3, 14 @ 11:01 am
Rich, is there anyway to block out all replies except RENUGS? It would save me alot of time.
Comment by Howard Thursday, Jul 3, 14 @ 11:01 am
**This could stir talk of bankruptcy (which renders the affirmed obligation moot) while it gives Mr. Rauner and legislative challengers a huge fan for the political flame.**
Two questions:
1 - how will the state file for bankruptcy?
2 - how does this help Rauner, when his plan is unconstitutional and hurts workers A LOT more.
Comment by AlabamaShake Thursday, Jul 3, 14 @ 11:04 am
Dental insurance used to be premium free and a lawsuit was filed when the State started charging a premium but I can’t seem to find out what happened to that case.
Comment by Anonymous Thursday, Jul 3, 14 @ 11:05 am
Does this bring back the issue of requiring local school boards to fund some or all of their employees retirements? This probably has no over all impact on individual tax payments but it would free up state funding.
Comment by Bourbonrich Thursday, Jul 3, 14 @ 11:06 am
How close will Illinois have to come to bankruptcy (which alternative may not even be available to the State) before the Legislature realizes what they should have acknowledged a long time ago - that a constitutional amendment deleting the pension protection provision is required. The combination of confiscatory taxes and severe limits on non-pension expenses otherwise needed to meet future pension obligations portend a very bleak future for the Land of Lincoln. Who will want to stay other than those who can’t afford to leave?
Comment by Former State Senator Thursday, Jul 3, 14 @ 11:06 am
States can not file bankruptcy.
Comment by Anonymous Thursday, Jul 3, 14 @ 11:06 am
- Anonymous - Thursday, Jul 3, 14 @ 11:05 am:
Dental insurance used to be premium free and a lawsuit was filed when the State started charging a premium but I can’t seem to find out what happened to that case.
That’s what I remembered also. Hence, my question earlier in this series of posts.
Comment by Jechislo Thursday, Jul 3, 14 @ 11:07 am
Ooops.
Comment by dupage dan Thursday, Jul 3, 14 @ 11:07 am
What Farker said. The state is going to rue the day the legislature and governor passed on John Cullerton’s proposal. Because the court has now forced on us something that is far more expensive, and can only be fixed by constitutional amendment. The first step toward that process is enough political backlash against the public sector to get it on the ballot.
I would hope, hope, hope and hope again that organized labor will refloat the Cullerton proposal; it would save us from the toxic combination of brutal tax rates, hatred of the public sector and relentless economic decline I fear we’re headed for. I’m just trying to think of a way in which labor would politically benefit from doing so, because this decision just took away all the obvious incentives.
in an odd way, it also lowers the stakes for this fall’s election. It doesn’t really matter who out of Quinn or Rauner wins if there’s no way either one of them can grapple with this decision. The big question now is whether we get a shot at a constitutional amendment before 2028.
Comment by Angry Chicagoan Thursday, Jul 3, 14 @ 11:07 am
Mr. Big Shot Attorney
I’m a Bigger Shottier Attorney than you with better credentials and I say you are full of CRAP.
How’s that for a merit based comment OW?
Comment by in the know Thursday, Jul 3, 14 @ 11:07 am
I’ve said this from the beginning, when the case first started…benchmark all employees with 20+ years active and retired…(set aside Tier 2 employees in a separate list) and change the law for all new hires that says the contract is only for a 401K and you go into Obamacare alone..no insurance. In 15 - 20 years many will have become deceased and the cost cure comes down. Radical…yes, but at least the debate will be on for a fair system and concensus.
Comment by Captain Illini Thursday, Jul 3, 14 @ 11:09 am
- in the know -,
You have a certain style and panache. That has merit in your snark.
To the Post,
I would have thought flying press releases would be dueling about now.
Maybe there is a fear of getting in front if this is also another way to get run over by this decision a second time?
Comment by Oswego Willy Thursday, Jul 3, 14 @ 11:14 am
I guess we all know what kind of sandwich Ty Fahner is eating for lunch today.
Comment by Michelle Flaherty Thursday, Jul 3, 14 @ 11:15 am
@ac
Thanks! But I also want to make sure people understand changing the constitution only affects new hires not those of us currently in tier 1 or 2. Ex post facto and all. So it doesn’t even matter if you do that because the saving wouldn’t come until many many many many years down the road. Which does to solve anything.
Bankruptcy for our state? Lol surely you jest!
Comment by Farker Thursday, Jul 3, 14 @ 11:16 am
It seems to me this sets up an inevitable constitutional amendment.
Either the pension clause gets modified, the flat tax, or both. The scary part is the pension clause is a very easy case to make if the voter isn’t directly affected. May be unfair and nasty but taking from fred to not take from me is usually easy sell. As for tax increase it only helps if the ga and gov pay into the system and not find other “Important”things to use it on.
Comment by Mason born Thursday, Jul 3, 14 @ 11:17 am
Captain Illini, that’s my thought exactly. Next AFSCME negotiation should be very interesting.
Comment by Chicago Cynic Thursday, Jul 3, 14 @ 11:17 am
If Cullerton’s plan advanced with union approval, would it have been challenged? Is that plan now also DOA?
Comment by Lincoln (b)LOGger Thursday, Jul 3, 14 @ 11:18 am
===it’s equally hard as a citizen and taxpayer to not grieve for lost opportunity, or at least lost time.===
Steve, I totally agree, but the supporters of SB1 used going through this exercise in futility as an excuse for passing these onerous bills in the first place. They’ve received the ISC’s answer. They threw everything, including the kitchen sink, at the Supremes to see what would stick, and I would argue that very little, and most likely none of it will ultimately stick.
I think we had to go through this exercise too, and I have to say that I’m gratified that the judiciary has proven itself independent of Madigan’s chilling statement of claiming to be able to get 4 on his side. The fat lady is tuning up on SB1.
It was difficult through this all to be considered one of “them”. You fear that we still will be considered an even more hated “them” by some. Maybe. But what I will say is that, while I was surprised by the Dem’s desertion of the middle class in this instance, I was just as surprised from the support for the rule of law from many on the Republican side. Unfortunately, many on both sides are all too willing to stick it to someone else big time, solely to protect themselves from any impact at all.
Throughout all this, I’ve been an Illinois citizen and taxpayer. As a member of that unfortunate club, it time to get down to the business of properly funding the state’s priorities going forward. We’re in for some hurt brought to us by 60 years of political incompetence on both sides of the aisle. But, as we were when this started, we’re all in this together, and equally so. We better all get back to solving the state’s big problems in a constitutional way, and the sooner the better. I’ll vote for any candidate that lays out an equitable plan to do so, and stops with the political hedging that both side’s politicians think they can get away with. It’s also time for the press to, well, press them much more on clarity for these critical issues.
PublicServant
Comment by PublicServant Thursday, Jul 3, 14 @ 11:19 am
“and I say you are full of CRAP.” Wow, what I missed out on by not going to law school!
Comment by Skeptic Thursday, Jul 3, 14 @ 11:19 am
@lincoln
Of course it’s off the table. Why would we concede anything now the the healthcare is protected? SB1 is what’s now DOA
Comment by Farker Thursday, Jul 3, 14 @ 11:21 am
Wow is the only description for this result. Health insurance for retirees was the single benefit that was most clearly not protected by the Pension Clause, and this court finds a way to construe it as a protected pension right. We’ll see if the state files a petition for rehearing, but has rehearing ever been granted following a 6-1 decision?
Comment by Lycurgus Thursday, Jul 3, 14 @ 11:24 am
The hubris of the most powerful man in the State really cost the taxpayer today. So much for my way or no way. Karma must be real!
Comment by Lincoln (b)LOGger Thursday, Jul 3, 14 @ 11:26 am
In her dissent Justice Burke states,
“I disagree with the majority’s holding that the pension protection clause protects more than pensions.”
She also points out,
“…the majority has not determined here whether Public Act 97-695 impairs or diminishes retirees’ pension benefits and, thus, unconstitutionally violates the pension protection clause. That is the issue that will be decided by the circuit court on remand.”
While I would like to think that this foreshadows decision of the ultimate issue, those arguments have not yet been made or ruled upon. No lady has yet sung.
Comment by Bigtwich Thursday, Jul 3, 14 @ 11:27 am
For those already retired, forget it let it go, game over. For all those still working, one can always negotiate in all kinds of ways. The state could negotiate a 20% pay cut and when the union strikes stick it out, if possible. This would reduce the pay that many pensions are based on. I am not for this, but points out that there are legal, if wrong ways forward. The system can adjusts, please listen to Ralph and change the ramp along with a tax code that captures the growth in the economy. etc.
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 11:32 am
What does this ruling mean for those with 20 years but still working? What leeway, based on the IL SC ruling, does the lower court have? A huge ruling and win for state employees and retirees, but there are always little twists and turns in the road yet to come….need to have this sort out for how it effects each group of people — new hires, those with 10 years, 20 years, retired etc.
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 11:35 am
This ruling takes off the table any negotiation on the part of those already retired.
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 11:36 am
Why do I think that all incoming employees are going to get legislatively placed into a new tier with markedly reduced benefits? I see a new caste system forming among state and local employees. These “new tier” programs are the only ones that seem to constitutionally survive.
Comment by Jake From Elwood Thursday, Jul 3, 14 @ 11:38 am
I wonder if Madigan hoped this decision would have come before May 31. Would that have changed the budget? Provided cover for an extension of the tax increase?
Comment by Macbeth Thursday, Jul 3, 14 @ 11:39 am
To those suggesting Pension reform via Constitutional Amendment:
The Public Pension Amendment failed in November 2012. Are you sure you can marshall a supermajority to get any other reform amendment passed?
Comment by GraduatedCollegeStudent Thursday, Jul 3, 14 @ 11:40 am
All the State workers reading Cap Fax instead of doing their job… REJOICE!!!
Comment by Rahm'sMiddleFinger Thursday, Jul 3, 14 @ 11:42 am
The Supremes released this opinion on a holiday weekend and Rich still has close to 200 posts on the subject. Powerhouse issue and a powerhouse blog.
BTW, Jon Burge gets to keep his police pension in a separate opinion. Ugh.
Comment by Jake From Elwood Thursday, Jul 3, 14 @ 11:45 am
GraduatedCollegeStudent
– Are you sure you can marshall a supermajority to get any other reform amendment passed?–
I would argue today makes it more likely. Don’t get me wrong i don’t want to see it. However we are looking at some not insignificant tax increase and some not insignificant cuts. Both of which equal pain to those not recieving pensions (I am well aware it is pain to those receiving too however not the target audience). Pain equals how do i avoid pain here get fred and leave me alone looks better and better.
Comment by Mason born Thursday, Jul 3, 14 @ 11:48 am
I wonder if the state will have the ability to now increase deductibles and copays to make up for this? It seems like that would be their response.
Comment by Rusty618 Thursday, Jul 3, 14 @ 11:53 am
Rahm’s Emanuel’s staff is trying to talk him off of the window ledge as we speak. He will now have to spend tax dollars collect for the cost of running the city for that purpose and not for non-essential construction projects.
No more closing schools only to build a new charter school on the same spot. Those vendors will be give their political contributions to other people who can scratch their backs and line their pockets.
Comment by Rollo Tomasi Thursday, Jul 3, 14 @ 11:55 am
====Michelle Flaherty - Thursday, Jul 3, 14 @ 11:15 am:
I guess we all know what kind of sandwich Ty Fahner is eating for lunch today. =====
Priceless!!!!
Comment by Rollo Tomasi Thursday, Jul 3, 14 @ 11:56 am
Rusty, don’t you think that jacking up deductibles and copays might have an effect on current employees and their desire to continue to work for the state at their current salary?
Comment by PublicServant Thursday, Jul 3, 14 @ 11:57 am
@
- Rusty618 - Thursday, Jul 3, 14 @ 11:53 am:
=I wonder if the state will have the ability to now increase deductibles and copays to make up for this? It seems like that would be their response. =
This issue was actually brought up in the case in front of the supreme court. A justice asked if the state could do just what you are proposing, and the retiree/employee attorney indicated that some adjustments over time have been the norm, however, we might be back hear in front of the justices if this is used as a “back door” way to diminish pension benefits. I am paraphrasing. The problem would be that retiree health benefits have always been basically the same as employee benefits so a tough road for the state to take because they would be negotiating those higher fees for all.
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 12:00 pm
Having read the whole decision once, my reaction is still the same: I hoped for this decision but WOW!
First impressions:
Eric Madiar could have wrote this decision, and pretty much did in his opinion paper for Cullerton on the pensions themselves. Almost every case Eric cited was also cited by the ISC. The exceptions / addtions are cases that were not yet on the books when Madiar wrote his analysis.
SB1 is road kill that just got run over by a steamroller. Specifically, the lines in paragraphs 53 and 55, especially the first sentence in 53: “There is nothing in the text of article XIII, section 5, its history, or the convention debates that would support a conclusion that ONLY the retirement annuity itself falls within the provision’s protections.” (emphasis added in caps) and the second sentence in 55: “Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it MUST be liberally construed in favor of the rights of the pensioner.” (again, emphasis in caps)
Burke’s dissent, IMO, twists some of the language to make her case. Not that she doesn’t have a partial point, but she is reaching. I won’t, but I could refute parts of it fairly easily.
Finally, it looks like the ISC decided they didn’t want to be made the scapegoat for the pension problems and decided to be clear about the General Assembly’s fault in the whole mess. As much as any court restains their comments, the ISC actually took the GA to the wood shed a bit by quoting some 1970 Con-Con comments. See paragraph 45: “Delegates were also mindful that in the past, appropriations to cover state pension obligations had ‘been made a political football’ and ‘the party in power would just use the amount of the state contribution to help balance budgets,’ jeopardizing the resources available to meet the State’s obligations to participants in its pension systems in the future.” and paragraph 46: “Delegate Kemp, who spoke in support of the measure, viewed its purpose as “mak[ing] certain that irrespective of the financial condition of a municipality or even the state government, that those persons who have worked for often substandard wages over a long period of time could at least expect to live in some kind of dignity during their golden years” and paragraph 47: “When asked for a summation, Delegate Green stated: ‘What we are trying to do is to mandate the General Assembly to do what they have not done by statute.’”
The one ambiguity / loophole of sorts that jumps off the page at me is in paragraph 14 where they talk about “… Public Act 97-695 makes no distinction based on when a person first became an annuitant, retiree or survivor. The new two-part formula applies to existing annuitants, retirees and survivors as well as those who retire or qualify as survivors in the future. …” That seems to imply to me a possibility of changing things for people who are not yet retired, but I might be reading too much into it. Need to think about it and subsequent statements some more.
About the only things the ISC did not do with their remand order was spell out in no uncertain terms (like the appellate court did in Marconi) the exact actions the trial court is expected to take … but it’s pretty clear what the ISC expects.
Comment by RNUG Thursday, Jul 3, 14 @ 12:02 pm
- Howard - Thursday, Jul 3, 14 @ 11:01 am:
While I appreciate the vote of confidence, lots of people here make very good points.
Comment by RNUG Thursday, Jul 3, 14 @ 12:06 pm
- Angry Chicagoan - Thursday, Jul 3, 14 @ 11:07 am:
Even though Cullerton’s plan was agreed to by a lot of people, it wasn’t in compliance with the contract clause or the pension clause. It would have been found unconstitutional also, maybe just not with as many votes.
Comment by RNUG Thursday, Jul 3, 14 @ 12:08 pm
The state already drastically cut pensions for new employees in 2011. It is called Tier 2, and it is really bad. In fact, the cost to the state of funding tier 2 benefits is probably no more than 6.2% of salary, which is what a private employer with no pension plan whatsoever would pay for the employer portion of Social Security. If you try to cut any more by creating a tier 3 with even lower benefits, then the feds will just force you into SS and there will be no savings for the state.
The only constitutional remedy left for Illinois may be to tax retirement income - from all sources, e.g. State pensions, private pensions, IRA’s, etc. - the same as other income. Most states already do that. This might raise the 1 billion $ or so that SB1 would have saved. Also, I suppose the state will start increasing copayments, deductibles, etc. in the health plans in lieu of charging premiums; we will see how much of that will stick legally.
Comment by Andrew Szakmary Thursday, Jul 3, 14 @ 12:10 pm
===That seems to imply to me a possibility of changing things for people who are not yet retired, but I might be reading too much into it. Need to think about it and subsequent statements some more.===
I agree RNUG. I think that does potentially signal that it does open the door to current employee modifications. I also believe that the effective date of the bill will need to give current employees time to decide whether they would like to remain current employees. I will also predict that there will be a mass exodus of those able to go, and have not already done so. Don’t stand in any state office doorways any time soon.
===About the only things the ISC did not do with their remand order was spell out in no uncertain terms (like the appellate court did in Marconi) the exact actions the trial court is expected to take … but it’s pretty clear what the ISC expects.===
I don’t understand the remand then really. Why not just rule that Nardulli’s ruling was wrong, and make a final determination instead of remanding it.
Comment by PublicServant Thursday, Jul 3, 14 @ 12:14 pm
I have tried to read and absorb it all posted here. Am wondering what happens to the health premiums that have been paid by retirees and the supposedly fund that will be returned? Any news or that? or…is that a Nardulli thing?
Comment by Toni H. Thursday, Jul 3, 14 @ 12:16 pm
(Love - RNUG - going about his business…)
Does Quinn call a meeting with the Four Tops or meet with Cullerton and Madigan, or does MJM and Cullerton begin negotiating alone.
The election is fast approaching. After the 4th holiday, press releases aren’t going to cut it, even for Rauner, but Rauner doesn’t have the burden of governing as of now.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 12:18 pm
- PublicServant - Thursday, Jul 3, 14 @ 12:14 pm:
It’s usually sent back to the originating court for the final order(s).
Comment by RNUG Thursday, Jul 3, 14 @ 12:23 pm
- Toni H. - Thursday, Jul 3, 14 @ 12:16 pm:
Presumably part of the originating court’s action will be to issue an order for the refunds.
Comment by RNUG Thursday, Jul 3, 14 @ 12:24 pm
OW: Since you’re going to be Governor next year, I think you should meet with the four tops and get things started.
Comment by Skeptic Thursday, Jul 3, 14 @ 12:25 pm
There are several issues that need to be addressed by circuit court. Attorney fees and reimbursement of premiums to annuitants from the escrow account. Too much paperwork to bother the Supremes with.
Comment by Norseman Thursday, Jul 3, 14 @ 12:26 pm
I wanted to respond to that Big Shot attorney but his posts are now gone. Glad you deleted all those posts.
Comment by Anonymous Thursday, Jul 3, 14 @ 12:28 pm
Here’s Attorney General Madigan spokesman’s response from BND:
Madigan spokeswoman Maura Possley said in a statement Thursday the high court’s opinion “has no direct impact on the pension reform litigation arguments.” She says the attorney general “will continue to vigorously defend the pension reform law.”
Umm, I beg to disagree, Lisa.
Comment by PublicServant Thursday, Jul 3, 14 @ 12:33 pm
Brauner? Brauner? We want to hear from you, Brauner.
Quinn? Quinn? We want to hear from you, Quinn.
Comment by Langhorne Thursday, Jul 3, 14 @ 12:33 pm
In the remand the court will need to deal with a variety of case management topics, e.g., class action matters, attorneys fees, orders to implement the Supreme Court’s holding.
Comment by Advocate emeritus Thursday, Jul 3, 14 @ 12:35 pm
- Skeptic -, I will take that meeting, after - Norseman - gets - RNUG - & - AA -, and - steve schnorf - (to name just a few!) to agree to meet with me before … to get me better in tune with realities and not talking point rhetoric.
I want smarter people than me around to help me.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 12:35 pm
I wonder if the ISC Ruling in this case will be considered by Belz during arguments in the SB1 challenge as well as in his ultimate ruling on the matter.
Comment by PublicServant Thursday, Jul 3, 14 @ 12:40 pm
OW, I will take any meeting that includes Diet Pepsi and CC …
Comment by RNUG Thursday, Jul 3, 14 @ 12:44 pm
will the additional 2% (in my case) for health care premium scheduled for this July be cancelled, or go into effect that then later be refunded?
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 12:45 pm
RNUG - I disagree with your statement that Eric Madiar could have written this decision, and that it follows his opinion for Cullerton. In fact, Madiar’s opinion never addresses health insurance benefits. It’s all about the statutory retirement systems under the Pension Code, and the limitations on reducing or impairing those benefits. I’d actually be interested to know Madiar’s private thoughts on this decision, and whether he agrees or not. I suspect he’d side with Justice Burke.
Comment by Lycurgus Thursday, Jul 3, 14 @ 12:47 pm
===OW, I will take any meeting that includes Diet Pepsi and CC …===
Tall, rocks, lime?
If I were MJM, Quinn and even Rauner, today is the day to respond, you have a 3 day weekend to let your response be forgotten.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 12:48 pm
Willy
If only real Politicians had this degree of Humility!!
–I want smarter people than me around to help me.–
Comment by Mason born Thursday, Jul 3, 14 @ 12:51 pm
===That seems to imply to me a possibility of changing things for people who are not yet retired, but I might be reading too much into it. Need to think about it and subsequent statements some more.===
Dear RNUG and Public Servant:
It seems to me that *current* (e.g., Tier 1) employees are also covered by this ruling. See Paragraphs 39 & 40 (…”Giving the language of article XIII, section 5, its plain and ordinary meaning, all of these benefits, including subsidized health care, must be considered to be benefits of membership in a pension or retirement system of the State and, therefore, within that provision’s protections…” and in #49 “…eligibility for health care coverage following retirement is conditioned on membership in one of specified public retirement systems.”
Finally, in #52 the opinion declares: “We agree. As set forth above, when article XIII, section 5, was proposed, the benefits afforded state employees included subsidized health care both while they were working and after they retired, life insurance, eligibility for a retirement annuity, disability coverage and survivor benefits.”
So, repeatedly, the decision seems to speak in favor of not merely retirees but those who are a “member(s)” of a public retirement system or have “membership in a public retirement system.” I’m not yet retired, but I’m definitely a member of (and currently pay into) a public retirement system (SURS — a visit to its webpage asks me to login to my “Member Account”). It seems to me that the ruling covers current employees too. Do you read “membership” differently? Thank you.
Comment by Inquiring Thursday, Jul 3, 14 @ 12:51 pm
Glad I moved to Missouri over three years ago….guessing I will be seeing many more of you here in the next few years!
Comment by Vote Quimby! Thursday, Jul 3, 14 @ 12:53 pm
Police power apparently was not argued. Why the heck not? It should have been a back-up position on the main issue.
Comment by abc123 Thursday, Jul 3, 14 @ 12:57 pm
- Mason Born -,
I know that governing is a “we” thing, not a “me” thing. Decisions are best made with great input and solution driven in the end.
This ILSC decision, and upcoming cases are a very clear reminder that solutions based on a lack of understanding impact on the law or the constitution, aren’t solutions to begin with.
The fallout of this decision and upcoming decisions will have the larger impact. This is “back to square one” fallout. That’s huge.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 1:06 pm
So, Derek Blaida was fired for no good reason….
Comment by Anonymous Thursday, Jul 3, 14 @ 1:06 pm
Willy
I completely agree. My point was more for those pols who are convinced they are the smartest people in the room no matter what room.
Comment by Mason born Thursday, Jul 3, 14 @ 1:09 pm
Rauner should come out and say, If you elect me Governor, I will be certain that the Constitution is opened and this mess is cleared up once and for all… Doesn’t matter that he alone can’t do it.. It’s worked all these years for everyone else in Illinois to say anything! Go all in. The Unions are going to vote against you anyways.. Start the commercials on what the future holds on this path.. And what he can accomplish under a different system… It may not touch the current retirees.. And may not in the system.. Although I wish it would the latter… And see how quick the Unions want to discuss anything. In this climate, voting to open the Constitution with what is coming will happen… Or OW figures something better out…
Comment by Walter Mitty Thursday, Jul 3, 14 @ 1:14 pm
RNUG - Haven’t prior S Ct cases indicated that one becomes a member of a pension system upon being hired (not just upon retirement) and that the terms of the system upon the date of hire can’t be diminished? I thought so, and that this was why the Tier 2 class was structured as applying to those hired on or after that certain date.
Comment by titan Thursday, Jul 3, 14 @ 1:16 pm
Tax services and retiree benefits and get behind the graduated income tax amendment and you will right the ship, Illinois, without violating the Constitution.
Comment by BobbyG Thursday, Jul 3, 14 @ 1:17 pm
Sorry Quimby…As much as I love Missouri, Illinois is my home, and I am proud to live here. I’m not going anywhere, regardless of what goes on in state government. I think you’ll find that a lot of people on this blog feel the same way.
Comment by Old Shepherd Thursday, Jul 3, 14 @ 1:18 pm
I was just reading the Chicago Public Schools (CPS) budget this morning that has just been released. It is totally built around the idea that the Chicago Teachers Pensions will be reduced and significant cost savings realized.
That strategy seems over, it becomes therefore a real possibility that Mayor Emanuel in order to save CPS will have to go to the General Assembly and seek a long term waiver to the property tax cap after the election. If CPS fails to generate additional revenue it will eventually end up in some type of receivership situation like it was back in 1979. Even if the state income tax rate remains at its current level CPS is in deep trouble, if the rate drops and payments in State Aid decline the collapse will happen even faster.
Comment by Rod Thursday, Jul 3, 14 @ 1:19 pm
===I completely agree. My point was more for those pols who are convinced they are the smartest people in the room no matter what room.
I think they though they could bully the Supreme Court on the issue. They being MJM. The problem is it is very hard to get around the pension clause in the Constitution. Even if you take Burke’s position on health care, there is no way to read it to allow SB1 and that should have been obvious to everyone.
The problem is that the Lege has wanted to spend this money without raising taxes and this money has to be paid back. Pension money is already appropriated and every governor and lege has acted like it is not. Now the bill is due and it’s going to hurt a lot more to do it now than to have done it 15 years ago.
The notion in some comments that the way out of this is to pass a Constitutional Amendment is simply delusional. This money is appropriated and the Illinois government has to pay it now. It is only a matter of how it comes up with the money that is up for debate. Changing future terms for pensions won’t help because that is for employees who won’t be retiring for at least 30 years and we have already done that anyway. The bill is due, it’s not about how we can screw retirees and current workers anymore–it’s how do we pay them what they were promised and the Court has guaranteed.
Comment by ArchPundit Thursday, Jul 3, 14 @ 1:25 pm
I agree with inquiring. You become a member of a retirement system when you start paying into it.
Comment by Anonymous Thursday, Jul 3, 14 @ 1:25 pm
- Mason Born -,
I know, and thank you for the compliment too. It wasn’t lost in me. I was just amplifying your point to the decision is all. I apologize, and I humbly thank you.
The heavy lifting from now on, will have to be a “we” thing, including My Party, and with people far smarter than those elected officials in the room, for something to get done, avid that might not happen in the short term, just because of the calendar, and proposals needing a possible election in 2 years to see it on a ballot too, (if you go constitutional amendment route, which looks more likely now)
All good - Mason Born -, much respect and thanks.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 1:30 pm
We’re going to have to have a sales tax on as many services as Indiana does. What is it currently? 17 vs 51 services? We’re also going to have to pass the Fair graduated income tax.
It’s time to tax ourselves like the industrial and transportation hub of the country that we are instead of a sleepy backwater like Mississippi.
Comment by markg8 Thursday, Jul 3, 14 @ 1:44 pm
My appreciation to the lead plaintiff, Roger Kanerva.
Perhaps Quinn and Madigan would be interested in knowing that in his distinguished days at IEPA, Roger was known as “The Black Prince.”
Comment by Buster Thursday, Jul 3, 14 @ 1:45 pm
Inquiring- my concern stems from the justice’s reference to “prospective” changes being alright except for current annuitants, not new annuitants. I hope you’re right.
Comment by PublicServant Thursday, Jul 3, 14 @ 1:49 pm
So could one argue that instituting an income tax on a State pension would be considered an impairment or diminishment?
Comment by Jack Handy Thursday, Jul 3, 14 @ 1:50 pm
No way - that exemption does not stem from membership in the pension system. It’s just state tax policy on retirees in general. If that were the case, state retirees would be exempt from every sales tax and property tax increase their local governments pass.
Comment by OldSmoky2 Thursday, Jul 3, 14 @ 2:02 pm
===So could one argue that instituting an income tax on a State pension would be considered an impairment or diminishment?
Only if it were treated as different from other forms of retirement income.
Comment by ArchPundit Thursday, Jul 3, 14 @ 2:07 pm
It would be legal for Illinois to tax retirement benefits. I don’t believe you will see that anytime soon. it would effect all retirement income etc. Not a good move in an election year..old folks vote.
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 2:13 pm
Any one have an opinion on whether the pension checks that arrive on July 19 will include the scheduled increase in health care premiums?
Comment by facts are stubborn things Thursday, Jul 3, 14 @ 2:14 pm
The We Are One Coalition’s video statement on today’s ruling …
https://www.youtube.com/watch?v=QoLywiaM6PA
Comment by Michelle Flaherty Thursday, Jul 3, 14 @ 2:16 pm
- Lycurgus - Thursday, Jul 3, 14 @ 12:47 pm:\
I was drawing a parallel with the various arguments Madiar presented in his pension analysis with what the ISC came down with here. Yes, Eric never really addressed the issue of health care being protected, but he touched on all the relevant cases that the ISC touched on in this opinion. To me, there is something like an 85% - 90% paralell.
Comment by RNUG Thursday, Jul 3, 14 @ 2:22 pm
- Oswego Willy - Thursday, Jul 3, 14 @ 12:48 pm:
Tall, with rocks please
Comment by RNUG Thursday, Jul 3, 14 @ 2:23 pm
- Inquiring - Thursday, Jul 3, 14 @ 12:51 pm:
I think there might be a small crack there; probably isn’t but I’ve learned to never say “never” on legal issues. I’m still mulling over the whole thing; usually get my best thoughts when I ignore it and let the subconcious churn on it for a while.
Comment by RNUG Thursday, Jul 3, 14 @ 2:26 pm
RNUG
Thanks for the Analysis.
Comment by Mason born Thursday, Jul 3, 14 @ 2:28 pm
There’s so many posts I may have missed if anyone has asked this. My understanding is a state may NOT file bankruptcy, yet it appears many of those posting here like to put that out there as a possible outcome. States are not municipalities. Any JDs want to clarify for all?
Comment by nothin's easy... Thursday, Jul 3, 14 @ 2:32 pm
- titan - Thursday, Jul 3, 14 @ 1:16 pm:
Yes, they have said terms at time of hiring plus GA granted enhancements. So I’m pretty sure it covers all existing employees but there might be a very small crack.
Comment by RNUG Thursday, Jul 3, 14 @ 2:32 pm
titan,
Should have added, those rulings were all talking about terms of service and calculations of the pension itself, which is why I’m hedging on things. If we look at histoiry, some of which the ISC cited, they did change the 8 year premium free health insurance requirement to a 20 year requirement for those who were not yet retired. That’s why I think there is some wiggle room on employees who have not yet retired. That’s also why some of the other commentators here are suggesting there will be a mass exodus of State employees to lock in this benefit.
Comment by RNUG Thursday, Jul 3, 14 @ 2:36 pm
=== Any one have an opinion on whether the pension checks that arrive on July 19 will include the scheduled increase in health care premiums? ===
I have an “opinion.” I don’t think anything will change until circuit court issues a ruling.
Comment by Norseman Thursday, Jul 3, 14 @ 2:37 pm
===usually get my best thoughts when I ignore it and let the subconcious churn on it for a while.
Good idea, RNUG! Maybe Quinn and GA should try this. Their conscious isn’t doing so well.
Comment by Buster Thursday, Jul 3, 14 @ 2:39 pm
Norseman,
I agree. Unless the State immediately acts on their own or the court issues an immediate order, we most likely will end up making one or two more health insurance payments before the process gets stopped and the refunds start.
Comment by RNUG Thursday, Jul 3, 14 @ 2:41 pm
===This means Illinois can not do ANYTHING to get its house in order… - Higher taxes are forced on everyone…===
One could argue that Illinois, as a large progressive state, has had lower than expected taxes for its spending levels, since some of its “revenue” (since 1939) was “borrowed” from mandated (but unpaid) state pension fund contributions.
Comment by Diogenes in DuPage Thursday, Jul 3, 14 @ 2:44 pm
Will The City of Chicago finally have to
start paying its pension bills.
Comment by Chicago Lover Thursday, Jul 3, 14 @ 2:47 pm
So the options are:
1. Raise income taxes.
2. Impose service taxes.
3. Constitutional Amendment to impose a progressive tax.
4. Constitutional Amendment removing the diminishment clause.
5. End pensions going forward (establish 401k) and bite the funding bullet.
6. Cut state services to fund pensions.
Comment by Phenomynous Thursday, Jul 3, 14 @ 2:48 pm
- RNUG -,
Done, and well done today…as always
Comment by Oswego Willy Thursday, Jul 3, 14 @ 2:50 pm
- Phenomynous - Thursday, Jul 3, 14 @ 2:48 pm:
Your option 4, Constitutional Amendment removing the diminishment clause, also only affects people (new hires) going forward.
Comment by RNUG Thursday, Jul 3, 14 @ 2:52 pm
This is no different than the medical malpractice tort reform bill. Pass the bill to take out a political issue knowing the S.Ct. will find the legislation unconstitutional, thereby no pain is inflicted on those supplying the campaign contributions. This seemed all too predictable and now it is a certainty.
Comment by truthteller Thursday, Jul 3, 14 @ 2:57 pm
I suppose option 7 is get a new ISC … Not in the short term sure but I’m sure the money guys will be discussing it.
Comment by ZC Thursday, Jul 3, 14 @ 3:00 pm
I have not posted in a long time because well,RNUG has really said everything I would. RNUG should be the poster of the year . I cant think of anyone who has been as spot on as he has . With this victory I will switch monikers if I post again.
Comment by RNUG Fan Thursday, Jul 3, 14 @ 3:04 pm
Someone (RNUG) please explain to me why a constitutional amendment eliminating the diminishment clause would not affect current retirees (COLA specifically)—this must be a legal principle?
Comment by Peoria guy Thursday, Jul 3, 14 @ 3:06 pm
I believe RNUG is referring to ex post facto laws, Peoria Guy.
Comment by PublicServant Thursday, Jul 3, 14 @ 3:18 pm
Peoria guy - ex post facto laws are prohibited by the state and US constitutions; basically saying that you cannot take away rights retroactively that were once constitutionally protected; you can ony change the terms going forward. The other item that would apply is the enforcement of contracts, also protected by both constitutions. These are two items that might get any lawsuit on a state constitutional amendment into the US Supreme Court, depending on the conditions.
Comment by Six Degrees of Separation Thursday, Jul 3, 14 @ 3:19 pm
It can’t be fixed by a constitutional amendment not due to ex post facto law limits (technically, that only applies to criminal laws), but due to the analogous “impairment of contract” and due process considerations. Same basic concept, but different legal doctrine categories.
Comment by titan Thursday, Jul 3, 14 @ 3:25 pm
Jechislo - Thursday, Jul 3, 14 @ 11:07 am:
- Anonymous - Thursday, Jul 3, 14 @ 11:05 am:
Dental insurance used to be premium free and a lawsuit was filed when the State started charging a premium but I can’t seem to find out what happened to that case.
That’s what I remembered also. Hence, my question earlier in this series of posts.
AFSCME filed a grievance and a lawsuit when the State began charging retirees premiums for their dental insurance. The Court refused to hear the lawsuit until all of the remedies under the grievance process were finalized. It is my understanding that,this process is still not complete and as a result the lawsuit is still pending.
Comment by Greg Thursday, Jul 3, 14 @ 3:28 pm
Thank you Six Degrees and PublicServant. Very helpful.
Comment by Peoria guy Thursday, Jul 3, 14 @ 3:28 pm
If federal funds were used to pay part of any state employee’s salary and benefits, might be grounds for a federal appeal case on impairment of contracts even if ISC were to rule in favor of SB1.
Comment by Six Degrees of Separation Thursday, Jul 3, 14 @ 3:29 pm
- Peoria guy - Thursday, Jul 3, 14 @ 3:06 pm:
The pensions are a contract, and if you have any doubt, the IL Constitution specifically says they are. So straight contract law applies.
And although the ISC really didn’t address the issue of whether or not a contract exists for health insurance, most people, myself included, believe there is a contract there also: there was an offer with conditions (if you work 20 yrs and retire we’ll give you health insurance) and an acceptance (working the 20 years and retiring). Once the conditions of the contract are fulfilled, you can’t unilaterally change the contract terms retroactively.
There are ways to legally change a contract retroactively, but it normally requires the agreement of BOTH parties to the contract and it usually also requires a payment (or other valuable consideration) by one of the parties to the other party.
Think of it like a fixed rate car loan or fixed rate mortgage, where the bank wants to change the terms of the deal after you’ve been paying on the loan for years. Law says you can’t do it unless you have violated the terms of the loan (contract) that you signed.
Comment by RNUG Thursday, Jul 3, 14 @ 3:37 pm
Michelle, that was a great speech by Henry. Thanks for posting.
Comment by Norseman Thursday, Jul 3, 14 @ 3:43 pm
One legal way the state could attempt to reduce its pension liability would be to do what Blago did several years ago; offer a pension buyout at 2x your current vested pension, with no further benefits given and opting you out of the health care system upon retirement. Offer and acceptance for something of comparable value passes constitutional muster; there were several hundred takers, including a few high profile employees, when it was last offered, IIRC. I do not recall if this required the resignation of the employee, but I don’t see the harm in offering it to the still-working. A few civic minded employees might even do it to help the state, if they were asked, no snark intended.
Comment by Six Degrees of Separation Thursday, Jul 3, 14 @ 3:48 pm
253 comments? Gotta be a record.
Comment by Chicago Cynic Thursday, Jul 3, 14 @ 4:01 pm
RNUG - Thursday, Jul 3, 14 @ 2:26 pm:
- Inquiring - Thursday, Jul 3, 14 @ 12:51 pm:
I think there might be a small crack there; probably isn’t but I’ve learned to never say “never” on legal issues. I’m still mulling over the whole thing; usually get my best thoughts when I ignore it and let the subconcious churn on it for a while. ~~~
Thanks RNUG. I’ll be listening…
Best, Inquiring
Comment by Anonymous Thursday, Jul 3, 14 @ 4:10 pm
With regards to the 8/20 year change in service required for premium free health care instituted in the late 90s, the state modified the law about a year later so that anyone already employed when the switch was made could choose to retire under the old pension rules and use the 8 year vesting requirement or retire under the new pension rules and use the 20 year vesting requirement. This mostly mattered to people who were retiring under the general formula. A number of my colleagues had to choose which set of rules that they wanted to retire under and sign a contract that linked that choice to the health care premium structure.
This might have been a situation that applied specifically to SURS members because of the money purchase option.
Even as late as the late 90s the state recognized that the contract between state and employee had to at least appear to offer something of perceived equal value before forcing it on the employee.
Comment by Anon Thursday, Jul 3, 14 @ 4:16 pm
For those who like a good laugh, the Tribbie edit on the ruling is priceless, if expected.
Those poor guys got hit by a tornado! They claim to have read and understand it.
And even now, though they think it looks like the Supreme Court has killed the State of Illinois, they haven’t given up.
Such valor!
Of course, if only the Tribune would have had any influence on state government the last, oh, 160 years or so.
They’re tornado victims. They never endorsed anyone, ever, over the decades who shorted the pension funds.
They’re victims. Tornado victims.
But they haven’t given up.
Makes you think of the great Tribbie front-page edit after the Great Chicago Fire.
No, not really.
What clowns. Decades-long ennablers masquerading as victims.
Comment by wordslinger Thursday, Jul 3, 14 @ 4:20 pm
Six Degrees: I know you mean no snark, but “a few hundred” out of 80,000 or so won’t help. And I was one of those who declined Blago’s offer with the words “Are you out of your mind?” Well, of course he was, but that’s another matter.
Comment by Skeptic Thursday, Jul 3, 14 @ 4:32 pm
P.S. Willy, Diet Pepsi works for me too.
Comment by Norseman Thursday, Jul 3, 14 @ 4:44 pm
Willy, Cannoli and Coffee for me. I’ll bring my abacus if we need to crunch some numbers. Proud to be included in such an elite group.
Kudos to RNUG for the insightful comments and to Roger Kanerva. He saved my ‘hood from the scourge of a Super WalMart and helped save my free insurance.
word, that price of drivel posing as an editorial almost made me reach for some eye bleach. Kinda like the time I stumbled on Honey Boo Boo on the teevee.
Comment by Arthur Andersen Thursday, Jul 3, 14 @ 4:47 pm
@Chicago cynic
Well technically there were more than 253 comments but they deleted all mine. Anytime somebody posts a pro-Rauner comment they delete them. Rauner will be the next Governor. The Court’s decision sealed the election for him.
Comment by Big Shot Attorney Thursday, Jul 3, 14 @ 4:50 pm
- Norseman - & - AA -, done and done. I like this assembled Crew very much.
The Trib is ridiculous. Enjoyed - wordslinger - taking them to task.
Comment by Oswego Willy Thursday, Jul 3, 14 @ 4:51 pm
~~~ I hope you’re right. ~~~
Dear Public Servant:
Thanks for the info. I hope I’m right too.
Best, Inquiring
Comment by Inquiring Thursday, Jul 3, 14 @ 4:56 pm
-Norseman-,
I think we should give a standing ovation to Kanerva and John Myers if they are at the next RSEA meeting …
And I’ll give a big Thank You here to one of my former co-workers who was also a Kanerva plaintiff
Comment by RNUG Thursday, Jul 3, 14 @ 4:58 pm
One last comment … to those saying my crystal ball was perfect, I truly expected the ISC to not go quite this far. I sent Rich a note late last night stating I expected a split decision allowing the change for at least some of the various classes. I did expect the ruling would go partially / mostly against the State for numberous reasons having to do with the timing of the decision.
I’m glad the rule of law and plain language was upheld but I expected more wiggle room; guess the ISC wanted to put this issue to bed once and not have to revisit it aby time soon.
Comment by RNUG Thursday, Jul 3, 14 @ 5:12 pm
Please forgive me for giving 34 years of my life, the vast majority of my working career, as an Illinois state employee, and, as my name implies, a public servant. As I did when I volunteered as a United States Marine Corps service member, when I volunteered for state service, I relied on citizens to have my back. While they seem to support my service in the US Armed Forces, I’m dismayed that my state service is regarded with such enmity. Had I known, I would have eschewed state employment for the increased immediate benefits of private sector employment. Instead of relying on our representative democracy to adhere to the rule of law and keep the promises that were made during my 34 years of state employment, I would have obtained a job in the private sector, demanded and received a much larger salary for my educational level and job requirements and shot the dice with the private sector’s abuse of bankruptcy law in this country. Instead, I relied on the state, our elevated representatives, to keep their promises, which were ratified by the the voters, us, in 1970, and accepted a lesser salary, through many years of the state crying poor, because of the pension promise which was thankfully constitutionally codified as a contract.
I’m a veteran of the USMC, and I appreciate all the gratitude that I get for that service. Is state service comparable? Absolutely not. I risked my life in service of my country as a Marine. I never expected to be accorded the same level of appreciation for my service to the state, but I did expect our representatives, and by proxy of your vote for them, to keep their promises, whether they were constitutionally protected, or not.
Instead, now I have been relegated to being one of “them”. Abandoned by many who feel that they have no stake in the malfeasance of their representatives, and who expect me, alone, to shoulder the burden of their incompetence.
I’m a United States Marine. I don’t give up. And while I will always support the United States, I will never again support those who feel that any minor impairment of their financial condition takes precedence over the slow financial death of my family and I.
Rich, I get that this is a political blog. And I get that, politically, it was, as you said, “our turn in the barrel”, but I will never forget the abandonment that I’ve felt, nor will I forget the foolishness of my naive trust in the ultimate “I’ve got your back” attitude of every one of us here in the greatest country on Earth.
I’ll pass that on to my friends and family. I’ll also recommend that anyone working for the state, get everything up front in wages and salary because, ultimately, you cannot trust that Anyone “has your back”.
Comment by PublicServant Thursday, Jul 3, 14 @ 5:14 pm
–Anytime somebody posts a pro-Rauner comment they delete them. Rauner will be the next Governor. The Court’s decision sealed the election for him.–
Does that make you an Eternal Victim Big Shot Attorney?
Do you work on contingency?
Rauner said SB 1 didn’t go far enough. What’s the plan Big Shot, that seals the deal for him?
Geez, where does the Rauner crew hire the trolls, from the”Archie and Jughead” classifieds?
Comment by wordslinger Thursday, Jul 3, 14 @ 5:16 pm