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The end of the impasse as we know it?

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Illinois

* We talked about this topic before the spring break, and then I updated subscribers about it during break. By Matt Dietrich, republished with permission…

The main reason the Illinois budget impasse has endured into its 10th month is an appellate court decision from last July that said all state employees could be paid even without a budget authorizing their paychecks.

At the time, Comptroller Leslie Munger said failure to continue paying the 63,000 employees would put the state out of compliance with federal labor law and would incur steep penalties. (The state could have stayed in compliance by paying the federal minimum wage only to employees deemed essential, but Munger’s office argued that state government’s data systems are so old and inefficient that payroll could not be broken down as required.)

Attorney Genera Lisa Madigan had argued that the state constitution states clearly that state government can’t spend without authorization from the General Assembly. A Cook County judge sided with Madigan, but a St. Clair County judge a few days later ruled that failure to pay the employees would violate the state’s protection of contracts.

Thus, the dreaded “government shutdown” in Illinois never really happened. With employees still on the job at drivers license facilities, state universities, state parks and other state government offices, the vast majority of government appeared to function just fine. With that source of public pressure removed, Gov. Bruce Rauner and House Speaker Michael Madigan could pursue their protracted standoff without large-scale repercussions. Only recently has unrest over lack of state funding at public universities begun to generate widespread concern over the budget deadlock.

But that could change in a hurry after a March 24 Illinois Supreme Court decision that appears to reject the reasoning of the St. Clair County courts.

In the lawsuit, AFSCME Council 31 sued the state for payment of contractually promised pay raises from 2011 that had never been delivered because the state said it didn’t have the money. This led to a series of court actions (detailed on pages 3-6 of the decision) that ended up before the Illinois Supreme Court.

But the Supreme Court sided with the state, saying essentially that without a budget appropriation from the General Assembly, the state was not required to pay. The court cited “a well-defined and dominant public policy under which multiyear collective bargaining agreements are subject to the appropriation power of the State, a power which may only be exercised by the General Assembly.”

In other words, the contractual protection cited in the St. Clair County case does not supersede the “dominant public policy” by which the General Assembly authorizes spending tax dollars.

Armed with this ruling from the state’s highest court, Lisa Madigan would appear to have a strong foundation to revive her lawsuit from last summer. That could lead to a halt to state employee paychecks, which would lead to immediate and intense public outcry as the “mainstream” portions of state government abruptly closed.

That would lead, almost certainly, to a swift resolution of the budget impasse that is now into its 10th month.

“Currently we’re reviewing the court’s decision,” said Madigan spokeswoman Annie Thompson.

They’re doing more than just reviewing it. Just sayin…

* My contention here is that if/when the courts accede to the Supreme Court’s clear opinion, workers will have to be sent home because they can’t legally be paid and the state still hasn’t bothered to figure out how to comply with the federal minimum wage requirements for some employees. Some will be exempt, like at DCFS, which is under a federal consent decree. I figure the federal courts would also step in to keep prisons open.

But everything else would have to close. And then… maybe… we’ll see an end to this mess.

Maybe. The governor has already said he will demand a continuing appropriation for state worker wages, which would be a crazy precedent, and could also open the door for a Democratic “poison pill” on the AFSCME “no strike” bill.

Either way, don’t expect immediate results because this is the court system we’re talking about. Various things have to happen first (subscribers know more). But this could be the end of the impasse as we know it or the worst calamity we’ve ever seen if nobody budges and the whole thing crashes down.

posted by Rich Miller
Wednesday, Apr 6, 16 @ 12:14 pm

Comments

The hostage blood continues to flow as we wait for any avenue to open up to end the impasse. Let’s hope the lawyers and judges act expeditiously.

Comment by Norseman Wednesday, Apr 6, 16 @ 12:19 pm
“this could be the end of the impasse as we know it or the worst calamity we’ve ever seen if nobody budges and the whole thing crashes down.”

Put me down for fifty bucks on calamity.

– MrJM

Comment by @MisterJayEm Wednesday, Apr 6, 16 @ 12:21 pm
But all that leverage….

Comment by WhoKnew Wednesday, Apr 6, 16 @ 12:26 pm
@MisterJayEm beat me to it!

What kind of a crazy state do we live in that we have to hope for more destruction in order to end the current destruction??

Comment by Ole' Nelson Wednesday, Apr 6, 16 @ 12:27 pm
there is a technical legal issue here specific to unions. the State labor act specifically states that payment is contingent on appropriation. i.e its not a general contract issue, its a condition of the law that lets unions exist. unions have no right to organize in a soverign state government w/o permission from the gov. so the enabling statute condition is important.

technically any multi year contract is illegal, since aprops are by year.

that said, there is a side federal law issue here that has been missed. several state workers are actually in federal programs where the state certifies there wages and gets reimbursed. if the state certified those wages at X but then only paid the workers the minimium wage that would be a huge act of fraud in those programs. also many of these programs pay more then they cost. So Rauner may cost the state income if the reimbursements shut down since the wage certifications wont match the wages paid

Comment by Ghost Wednesday, Apr 6, 16 @ 12:34 pm
I’m assuming that employees paid from federal funds would continue to be paid, since the GA passed, and the Governor signed, an appropriations bill for federal funding.

Comment by Curious Georgina Wednesday, Apr 6, 16 @ 12:38 pm
This is another reason the “Neither” is the best answer for today’s QOTD. This issue with state employees being sent home is practically a pre-condition for progress on anything remotely resembling an actual budget.

Rauner is almost out of moves. He’s going to need to change tactics and try another course.

Comment by 47th Ward Wednesday, Apr 6, 16 @ 12:38 pm
Warning, snark ahead-

Well, Warren Jeffs is predicting the Apocalyse (again). Might not need to worry anymore;)

http://abcnews.go.com/US/wireStory/polygamous-leader-hopes-jail-fraud-charges-38186359

Comment by Anon221 Wednesday, Apr 6, 16 @ 12:39 pm
This reasoning overlooks the element of choice contained in the Supreme Court’s ruling.
It holds that the state “is not required to pay” without an appropriation, but not that the state “shall not pay” or “cannot pay” without an appropriation.
The Supreme Court intentionally limited the scope of their language. They do not have to pay, but they still can pay if they choose to do so. Otherwise, this opens the door to a host of additional payment issues concerning what the state can and cannot pay without specific appropriations.

Comment by No Use For A Name Wednesday, Apr 6, 16 @ 12:39 pm
My bday is coming, may need to ask to be a subscriber! HA!

This is a great development.

I hope that there is also some action by vendors (hospitals, doctors, etc.) to make sure that their FY16 accounts receivable get appropriated too!

Comment by cdog Wednesday, Apr 6, 16 @ 12:41 pm
===but they still can pay if they choose to do so. ===

Who is the “they” in that sentence? The General Assembly voted to pay employees but Governor Rauner vetoed the bill(s). Over-rides failed.

So “they” already chose not to pay employees.

Comment by 47th Ward Wednesday, Apr 6, 16 @ 12:43 pm
In addition, why would the AG want to force a government shutdown?
She did not say anything when the GA passed an admittedly unconstitutional pay change during the same legislative session a few months ago, so she clearly does not believe in blindly adhering to the law. Sometimes discretion is the better part of valor. Trying to force a shutdown makes as much sense as fighting the GA’s pay reduction.

Comment by No Use For A Name Wednesday, Apr 6, 16 @ 12:44 pm
So, if the AG wins in court, which sounds likely, will the Governor’s priority still be to fund K-12? That would be very telling.

Comment by Casual observer Wednesday, Apr 6, 16 @ 12:49 pm
Everyone thinks this is some big game. There’s a lot of banned words I could use to describe those people.

Comment by Demoralized Wednesday, Apr 6, 16 @ 12:51 pm
But why would judges decree that the state cannot pay without an appropriation when most of the money the state is paying now is by judicial decree, without an appropriation?

Comment by PAM Wednesday, Apr 6, 16 @ 12:52 pm
How many of the court orders from last year have an expiration date coming up? I remember at least one (can’t name it though) that was only good through June 10, 2016. How willing are the courts going to be to “renew” these if requested? If not, then we lose even more people and services, and are down to only 2 Cs- Consent Decrees and Continuing Appropriations.

Comment by Anon221 Wednesday, Apr 6, 16 @ 12:57 pm
There are doubts Lisa Madigan will take this to court, but she’s surprised people before.

Somebody must engage the Third Branch — it’s the only way to resolve an impasse where the Executive Branch is purposefully running the State aground by holding the Legislative Branch hostage. Of course, neither Branch (nor the public) will fully like the Court’s ultimate ruling. The chips must fall somewhere if the governing/legislative Branches can’t get it done…

Comment by TripleDouble Wednesday, Apr 6, 16 @ 1:16 pm
I’m not saying that the current situation is preferable to the scenario you’re laying out - it’s not. But as cynical as I am, I’m still not sure the governor, the leaders and others in a position of influence will/have to let it go that far. It is worth noting that there are state employees (I don’t know how many, but perhaps more than those who are gaming this out think) who live paycheck to paycheck. Even if it only takes a few weeks of a shutdown to convince the big guys and gals to put together a deal, there will be state employees who miss rent or mortgage payments, who have to take out high-interest loans to pay for medicine, etc. If the shutdown lasts longer than that, there will be a mass exodus of state workers who need a regular paycheck to survive, and that will mean it’ll take a while for the machinery of state government to get up and humming again. If that’s the only alternative to continuing to leave the homeless, addicts, college kids, etc., out in the cold, then so be it, but I really hope there’s another way.

Comment by Commander Norton Wednesday, Apr 6, 16 @ 1:16 pm
Bingo commander, the state workforce, I’m predicting will collapse.

Comment by Honeybear Wednesday, Apr 6, 16 @ 1:24 pm
If they were to send employees home, the state wouldn’t last 24 hours before the people start screaming very loud! They’re still upset that the SOS isn’t sending out reminder notices for their plates. I see a quick end to this impasse if employees don’t/can’t get paid and it is not business as usual in Illinois. Most people are completely oblivious to what is happening. If they would have sent employees home on July 1st, this would have been over 10 months ago.

Comment by BBG Wednesday, Apr 6, 16 @ 1:31 pm
Just yesterday, the Federal Circuit Court in Chicago ruled that Indiana cannot be sued to enforce FLSA provisions (overtime) as the 11th Amendment gives immunity. This suggests that if the AG had fought to not pay at all instead of arguing pay per FLSA, the paychecks would have stopped and government shut down would happen.
See: Nunez v. Ind. Dept. of Child Services, No. 15-2800 (April 5, 2016)

Comment by Just a country lawyer Wednesday, Apr 6, 16 @ 1:34 pm
When Pennsylvania was still in the running for “who will blink first”, the spotlight was diffused on Illinois. Now maybe the spotlight will get a little stronger. In some ways, that might help move things along in the proper direction. Durkin didn’t seem too keen for “more spotlight” yesterday with his laughingstock comment.

Comment by Anon221 Wednesday, Apr 6, 16 @ 1:35 pm
This does imho end the stalemate. Even the spineless republicans know what this does. Either Rauner finds a compromise or they go around him. They can’t allow a true shutdown for any length of time.

Unfortunately if Rauner plans stalemate part deux he’ll simply be sure to sign the payroll appropriation.

Comment by Mason born Wednesday, Apr 6, 16 @ 1:37 pm
Let me clarify, there may have been room for prospective relief (an injunction affecting future wages and work), but if Illinois had simply told workers that they could not be paid, the employees would not have found the federal courts available to award lost wages.
Bottom line, there is no enforceable federal law that mandates both that State employees get to avoid government shutdown or get paid.
There were no consequences and so no motivation to solve the budget crisis.

Comment by Just a Country Lawyer Wednesday, Apr 6, 16 @ 1:40 pm
If things remain unsettled by July, we could be heading for that perfect storm a Tribune editorial writer wished for some months ago. (The further collapse of social programs, all education programs at a standstill, AFSCME, CTU, other unions in full war mode.) If that prospect doesn’t move the governor into action, I don’t think anything will. The sham circus needs to come to an end.

Comment by Wensicia Wednesday, Apr 6, 16 @ 1:40 pm
Wonderin if Bruce is still winnin?

Comment by Saluki Wednesday, Apr 6, 16 @ 1:47 pm
Does anyone know if the AG’s Office is subject to a continuing appropriation for employee salaries? If Lisa wants to make a point and believes the paying employees is legally improper, why hasn’t she sent her employees home? While there is some intended snark, if SOS, AG, the Treasurer’s Office shut down, or elements of those offices shut down, perhaps that would be enough of an impetus to get the budget ball rolling.

Comment by Jon Wednesday, Apr 6, 16 @ 1:52 pm
Commander has veered into the passing lane, full throttle…should the prospect of no paycheck become reality, I know of a couple agencies where 60 - 70% of the workforce could leave tomorrow for retirement, with many others qualifying yet this year. Those that can - will leave permanently, but alas, isn’t that what BVR wants…more Tier 2 hires? Mad conspiracy…mad!

Comment by Captain Illini Wednesday, Apr 6, 16 @ 2:00 pm
I’m not so sure that Rauner would care if the govt shut down. I think he would see it as continued winnin’. This isn’t a rational /practical guy.

Comment by Dr X Wednesday, Apr 6, 16 @ 2:01 pm
Much better for AFSCME than a strike. Send the employees home and in a few weeks or less you will see a budget and a new contract.

Comment by A Jack Wednesday, Apr 6, 16 @ 2:16 pm
A Jack, it’s only slightly better. People live paycheck to paycheck. It’s going to cripple a lot of folks. That and I doubt it will lead to a new contract. Rauner has showed time and again his only goal in becoming Governor was to destroy ALL Labor. No the work stoppage will only be brief for exempt employees and union scabs who cross the picket line.

Comment by Honeybear Wednesday, Apr 6, 16 @ 2:20 pm
“I’m assuming that employees paid from federal funds would continue to be paid, since the GA passed, and the Governor signed, an appropriations bill for federal funding.” It is more complicated than that. Some employees are paid varying proportions of Fed AND state money.

Comment by Anonymous Wednesday, Apr 6, 16 @ 2:31 pm
How much longer will the courts allow the state to continue saying they don’t know how to label which employees are deemed essential? Maybe the Governor should assign this project to his new IT department, or to a 10th grader. Anyway, I don’t think the courts will like hearing that answer again.

Comment by Casual observer Wednesday, Apr 6, 16 @ 2:39 pm
Anonymous @ 2:31 - you are correct, I should have been more clear with my question. I was referring to those employees whose salary is 100% federally funded.

Comment by Curious Georgina Wednesday, Apr 6, 16 @ 2:39 pm
Maybe the Dems should use RNUG’s strategy from earlier today, but instead of using K-12 as the bargaining chip, use the state employee salary appropriations. /s

Comment by CharlieKratos Wednesday, Apr 6, 16 @ 2:46 pm
== Somebody must engage the Third Branch — it’s the only way to resolve an impasse where the Executive Branch is purposefully running the State aground by holding the Legislative Branch hostage. Of course, neither Branch (nor the public) will fully like the Court’s ultimate ruling. ==

The courts won’t get involved. They’ll simply note the GA has existing tools to resolve the impasse; tools like mustering an override or signing on to a recall bill.

Comment by RNUG Wednesday, Apr 6, 16 @ 3:14 pm
===The governor has already said he will demand a continuing appropriation for state worker wages, which would be a crazy precedent, and could also open the door for a Democratic “poison pill” on the AFSCME “no strike” bill.===

This.

All day… This.

The precedent would also include Rauner choosing… That’s choosing… hostages. Not the way to run a railroad. Further, Rauner supporting this move makes clear, Rauner owns the impasse.

If Rauner felt he could blame the Dems, he’d let the pay to state workers end, and allow agencies to close

Those are agencies with Rauner appointees and Rauner’s name on the letterhead.

Comment by Oswego Willy Wednesday, Apr 6, 16 @ 3:23 pm
If the governor allows this to devolve into a true shutdown, it probably won’t go on for too long. I’m talking millions of Medicaid patients whose medical cards are no good at the doctor’s office and millions of Foodstamp recipients whose lIllinois Link cards that have no funds in them at the grocery store. Better get the riot gear ready!

Comment by Omega Man Wednesday, Apr 6, 16 @ 3:27 pm
- Omega Man -

Don’t worry … he’s got it covered with his non-union and National Guard contingency plans

/s

Comment by RNUG Wednesday, Apr 6, 16 @ 3:40 pm
Just like Rauner’s signing the primary/secondary education appropriation, his earlier “support” for paying State employees wasn’t motivated by any allegiance to education or State employees. It was to keep the general public oblivious while he proceeded with his real goal.

Maybe this will force him to back off.

Comment by Sir Reel Wednesday, Apr 6, 16 @ 4:07 pm
===They’ll simply note the GA has existing tools to resolve the impasse;===

I can’t wait to read the Supreme Court opinion that orders judges and court personnel to be paid in the absence of an appropriation. That’s going to require some legal stretching and bending.

Comment by 47th Ward Wednesday, Apr 6, 16 @ 4:10 pm
On the intranet page for our state agency, employees are told in an faq section that if pay checks stop due to a lack of appropriations/court orders we still are expected to show up for work. It goes on to say we will eventually be paid.

Comment by Kurt in Springfield Wednesday, Apr 6, 16 @ 4:18 pm
“On the intranet page for our state agency, employees are told in an faq section that if pay checks stop due to a lack of appropriations/court orders we still are expected to show up for work. It goes on to say we will eventually be paid.”

Just like state vendors. Oh well, I’ll just tell my bank to let me and my family continue living in our home. We’ll eventually send mortgage payments.

Comment by Cubs in '16 Wednesday, Apr 6, 16 @ 4:48 pm
4th Ward ==I can’t wait to read the Supreme Court opinion that orders judges and court personnel to be paid in the absence of an appropriation. That’s going to require some legal stretching and bending. ==

For court personnel, that would be a problem. For the judges themselves, not even a stretch. The constitution prohibits reducing their compensation, and failing to appropriate the funds for it is no excuse. They ruled on this before when there was no appropriation for their cost of living increases — the ILSCt ordered the comptroller to pay. Same thing happened when Quinn vetoed the appropriation to pay the legislators, because the constitution provides that their pay cannot be changed during their term of office.

Comment by Whatever Wednesday, Apr 6, 16 @ 4:49 pm
I know Whatever, but I’ve also met some judges who couldn’t find their noses without their clerk and the bathroom without their bailiff. I have a feeling these employees will be deemed “essential.”

Comment by 47th Ward Wednesday, Apr 6, 16 @ 4:56 pm
== Casual observer - Wednesday, Apr 6, 16 @ 2:39 pm: How much longer will the courts allow the state to continue saying they don’t know how to label which employees are deemed essential? Maybe the Governor should assign this project to his new IT department, or to a 10th grader. Anyway, I don’t think the courts will like hearing that answer again.==

The State knows which employees are deemed essential. The State’s Computer System is the problem.

Comment by Mama Wednesday, Apr 6, 16 @ 7:07 pm
The constitution assumes that budgets are passed each year as job#1. The courts exceeded their authority in intervening here - certainly for this long - having things break when you don’t follow the constitution is what is meant to happen so that you don’t feel like doing that again.

Comment by peon Wednesday, Apr 6, 16 @ 8:25 pm