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Good morning: www.blueroomstream.com will offer LIVE web coverage today in high definition of the following Judicial event from Springfield: 09:00 am - Illinois Supreme Court Oral Arguments (Jones v. City of Chicago) Springfield

***NOTE*** The Chicago Pension Case Will Be the Third Case of Four Heard Today By The Supreme Court

Click here for the live video stream.

posted by Rich Miller
Tuesday, Nov 17, 15 @ 9:14 am

Comments

The city appears to be going down in flames.

Comment by Archiesmom Tuesday, Nov 17, 15 @ 11:59 am
Steve Patton did a remarkably good job. He at least sounded like he believed his argument. (Carolyn Shapiro had more trouble with that in the State’s argument last time.)

Comment by Keyrock Tuesday, Nov 17, 15 @ 12:34 pm
City is going down. Affirm!

Comment by anon Tuesday, Nov 17, 15 @ 1:27 pm
The city has absolutely no chance of winning this argument. Their position boils down to a person who stiffs paying a plumber and saying I promised I’d pay but I never said my checkbook had to have the funds to cover the payment. Nice try.

Comment by CrazyHorse Tuesday, Nov 17, 15 @ 2:31 pm
http://chicago.suntimes.com/news/7/71/1108963/il-supreme-court-questioning-city-pension-deal-signals-bad-news-emanuel

Comment by Keyrock Tuesday, Nov 17, 15 @ 2:57 pm
I watched the hearing and read the Sun-Times article via the link above. It is clear from these that the key question is whether the City (and the State) are legally required to pay benefits to the members if/when the pension funds run dry. The city claims that according to some statute that predates the 1970 Constitution, they are not, so because a city funding guarantee is included in the pension legislation, this funding guarantee more than makes up for the benefit cuts in said legislation. Thus, on balance, the legislation does not diminish benefits.

However, given that the Pension Protection Clause in the 1970 Constitution logically would have to supersede the older statute to which the city refers, I just don’t buy the argument that the city is not on the hook to pay under current law - and neither, apparently, do many of the Justices, based on the questions they asked. This is simply the old Sidley Austin argument that only the funds themselves, and not city and state taxpayers, are on the hook to pay benefits. If that were really true, then local and state governments could simply refuse to provide funding to the pension systems, and the pension protection clause would not be worth the paper it is printed on. Surely this is not what the framers of the Illinois Constitution intended.

Comment by Andy S. Tuesday, Nov 17, 15 @ 4:12 pm
Well, this one seems to be cut and dried. Not so sure about the healthcare issue though.

Comment by Jack Retired Water Tuesday, Nov 17, 15 @ 5:20 pm
To cover from some more recent decisions what - Andy S. - wrote about, it is clear the courts expect the benefits to be paid; they just haven’t yet said WHO specifically has to pay.

McNamee (1996) said ” …that article XIII, section 5 creates an enforceable contractual relationship that protects only the pensioner’s right to receive benefits.”

In Sklodowski (1998), “While the Court recognized that article XIII, section 5 of the Illinois Constitution created an enforceable contractual right to benefits, such a right could not be divined to enforce the level of state contributions …”

So the courts have consistently said retirees have a right to receive the earned benefits. What the courts have not yet clearly said is exactly HOW the benefits get paid IF the funds go broke. However, in various arguments about funding the pension systems, the courts have noted that the State has multiple alternatives, including switching to a “pay as you go” process … which most people interpret to mean just pay the pension benefits (checks) monthly out of GRF.

If it were to get to that point, I would expect the courts to order the Treasurer and Comptroller to cut the pension checks and leave the messy details of where the cash comes from to back-fill the hole to the legislature or other responsible government entity for pensions not under SERS, JRS, GARS, SURS or TRS. That’s pretty much what has been done in legislatively forcing funding for IMRF. So various non-IMRF government entities with independent pension funds (Chicago for example) appear to be on the hook to pay, one way or the other, for their pension fund shortfalls out of their revenue sources like sales and property taxes.

Comment by RNUG Tuesday, Nov 17, 15 @ 11:08 pm
Appellate Court in recent County treasurer stipend case held that it did not violate separation of powers for Court to order payment out of General fund when legislature had failed to appropriate enough money to the designated fund to cover the payment required by the Constitution. Further precedent for City must pay even if it lets the pension checkbook run out.

Comment by Anonymous Wednesday, Nov 18, 15 @ 2:16 pm