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* From yesterday’s floor debate on Speaker Madigan’s pension bill…
“We do not have a real guarantee,” said Rep. Michael Fortner (R-West Chicago), who voted against Madigan’s legislation. “The fact we can change it through our budget implementation process gives me concern a future Legislature will do very much the same things we’ve seen happen all too many times during the past decades under a variety of different administrations.”
There are no absolute guarantees in life, and that’s particularly so when you’re talking about the General Assembly.
The guarantee in the Madigan bill is pretty darned solid. But Fortner is right that it could simply be undermined.
* So, I suppose that Madigan could propose a constitutional amendment guaranteeing that the state funds the pension systems.
Then again, there’s already a rock solid pension guarantee in the Illinois Constitution right now…
Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.
That benefits guarantee was thought by the framers to be etched in stone. Not so, according to Madigan and everyone else who voted for (or cheered on) the pension bill yesterday.
* There really is no way to forever guarantee anything. Using the lack of a guarantee as a reason to vote against the bill is just as illogical as claiming that the guarantee will definitely lead to assured state fiscal disaster if and when Wall Street crashes again. So, Bruce Rauner is wrong as well.
…Adding… Eden Martin uses the “The guarantee will ruin Illinois” argument in the Sun-Times today. It’s just not a very good argument at all.
All you can ever do to deter human beings is construct a high wall and hope they don’t decide to build a longer ladder.
posted by Rich Miller
Friday, May 3, 13 @ 8:48 am
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We have a state government of “Ifs.”
If…the state had not caved to union interests and lowered retirement ages…
If…the state had made its payments…
If…the state hadn’t raided the pension funds…
If…
You are correct, Rich. There are no guarantees when looking at an “iffy” state government.
Comment by Fan of the Game Friday, May 3, 13 @ 8:56 am
This bill isn’t anywhere near a long enough ladder Rich. And seriously, “cheering” this legislation is inappropriate either by those who voted for it, or against it. The Pension Clause was never intended to last “forever” just until the last tier 1 pensioner and his/her designated survivor passes on.
Comment by PublicServant Friday, May 3, 13 @ 8:56 am
Well when you are right you are right or why I have a funny feeling any change is going to be unconstitutional….maybe there is some consideration….and based on past rulings which Kilbride said he decides on the emergency wont fly…so whats left
Comment by RNUG Fan Friday, May 3, 13 @ 8:57 am
The guarantee is more about honor and keeping your word than the law. I believe the pension guarantees including insurance are excessive, but regardless of what the Speaker can convince a court, he knows that we promised workers their pension and their insurance. They worked for it, and to take it now shows he has no honor. But woe to him who defrauds the laborers of their wages. Mike Madigan may get away with it for a while, but one day he will answer to a higher court.
I wish a republican had the guts to say what this is. Madigan’s solution is to allow us to keep paying entitlements. We are taking money from people who worked and giving it to people who refuse to work. We can fund these pensions, but you would have to cut welfare programs. This is not about the only solution, it is about the only one that will allow Madigan to stay in power.
If you vote with Madigan on this, you have no honor and I question the intelligence of anyone who would do business with such people.
Comment by the Patriot Friday, May 3, 13 @ 8:58 am
Speaker Madigan was a member of the Constitutional Convetion. He knows what the Pension Clause means. And he knows the likely result if the Supreme Court makes a straight ruling on the merits.
That leaves two possibilities: Either, as has been suggested, this entire process is a setup to get the General Assembly off the political hook for keeping the income tax hike and making it (or a variation on it) permanent, or he’s not expecting a straight ruling on the merits. My bet is the former.
Comment by Anonymour Friday, May 3, 13 @ 9:02 am
My bet is on the latter. Kilbride wouldn’t on the SC if it wasn’t for Madigan and he knows it.
Comment by Bill Friday, May 3, 13 @ 9:04 am
One thing that is always guaranteed is politicians will find a way around “guarantees”
Comment by Angry Republican Friday, May 3, 13 @ 9:04 am
Agree with Bill. Leaving the judges pension plan out of the bill is pandering at the highest level.
Comment by Fan of the Game Friday, May 3, 13 @ 9:08 am
Yes, leaving the judges out looks like pandering. But keep in mind there’s already a very recent Supreme Court ruling saying you can’t mess with their compensation and COLAs. Messing with their COLAs would make this even more blatantly unconstitutional than it already is.
Comment by Michelle Flaherty Friday, May 3, 13 @ 9:11 am
Legislators can say what they want, but look at Kraus or Felt. People who argue that these reforms are not constitutional are not just relying on the plain text of the clause or the transcripts of the debate- there is case law too. Makes you wonder what SB 1 is really all about.
http://www.leagle.com/xmlResult.aspx?page=8&xmldoc=197990572IllApp3d833_1786.xml&docbase=CSLWAR1-1950-1985&SizeDisp=7
http://cgfa.ilga.gov/Upload/2008%20JANUARY%20Handbook%20of%20Illinois%20Pension%20Case%20Law.pdf
Comment by Lil Squeezy Friday, May 3, 13 @ 9:13 am
I disagree with the comment ” I believe the pension guarantees including insurance are excessive,…”. When viewed out of the context of their creation, they appear so. However, they were granted and approved by both parties as trade offs for raises and employees’ pension contributions. They hoped either the actuarial tables or a flu pandemic would bail them out.
Comment by Anon. Friday, May 3, 13 @ 9:20 am
“That leaves two possibilities: Either, as has been suggested, this entire process is a setup to get the General Assembly off the political hook for keeping the income tax hike and making it (or a variation on it) permanent, or he’s not expecting a straight ruling on the merits. My bet is the former.”
Agreed. And for all you who like to talk about the election of SC judges, remember it was Madigan AND the unions that put those justices in office.
Comment by Lil Squeezy Friday, May 3, 13 @ 9:20 am
===Leaving the judges pension plan out of the bill is pandering at the highest level. ===
And your point is… what?
The idea is to pass a bill that has at least some chance of being approved by the courts.
I get why opponents of the bill are using this argument, but it’s just a cover for opposing the bill.
Comment by Rich Miller Friday, May 3, 13 @ 9:20 am
Let us assume for a moment the Illinois SC ignores the plain meaning of the State Constitution and approves of the Madigan Bill. The fact remains that the Illinois Constitution defines the pensions as contractual obligations, and the U.S. Constitution prohibits states from abrogating contracts unless an extremely high standard of necessity is met. The Illinois SC may not have the final word on this.
Comment by Andrew Szakmary Friday, May 3, 13 @ 9:23 am
Also, every judge in this state and many in other states will read the SC’s opinion (if we ever get to that point). Don’t discredit a justice’s desire to be respected by their peers. You have to give them something solid to hang their hat on.
Comment by Lil Squeezy Friday, May 3, 13 @ 9:23 am
And, I would add, the complaint about judges not being in the bill is basically the same sort of argument used against the “guarantee.”
It’s just an excuse to cover up why people are really opposed.
Legislators don’t get to vote on a million different bills on each topic, and even if they did, it wouldn’t be to your liking because y’all oppose the entire concept of pension reform.
So, all you’re doing by attempting to highjack this thread by pushing the judicial angle is proving my underlying point. You’re coming up with excuses to oppose a bill that you already oppose.
Move along. Now.
Comment by Rich Miller Friday, May 3, 13 @ 9:24 am
Does anyone know / has anyone heard what the gurus of Wall Street think of Speaker Madigan’s proposal? Past discussion on the issue is that Wall Street won’t give Illinois credit for passing anything that is not “constitutional.” Are the preamble / Speaker Madigan’s comment about constitutionality & the Illinois Supremem Court an attempt to provide that veneer of “constitutionality?” How many bond sales are planned for the next year (for how much $)? Does this make such sales more likely?
Comment by Anyone Remember Friday, May 3, 13 @ 9:28 am
An absolute guarantee may be unconstitutional in itself unless enacted by constitutional amendment. There is a question about whether a current GA can appropriate funds for a future GA. Bond payments are addressed in the constitution, pension contributions are not.
Comment by Lil Squeezy Friday, May 3, 13 @ 9:28 am
RNUG,
Since you are probably highly informed on both versions of SB1, is there any room to merge the two into one bill that does the job and is constitutional at the same time?
Comment by Cincinnatus Friday, May 3, 13 @ 9:35 am
Some random points — points I hope that don’t hijack the thread:
- I don’t think anyone is against pension reform. I don’t think that’s really the argument — whether or not to reform the current system. Workers, I know, are for it — and if they’re on board — that’s more than half the battle. I suspect even retirees are on board about “reform”. What’s at issue seems to be *unconstitutional” reform. I suspect most of the people opposed to reform are really opposed to this — upending the (apparently mushy) state constitution.
- Illinois seems to have a real issue with contracts. I’m not sure why folks are worrying about a payment guarantee when we know (from the AFSCME contract) it means nothing. Moreover, I don’t know why we spend time worrying about contracts or guarantees when we know they, too, can — and will, apparently — be abrogated at will. I say this snarkily — but I do wonder why (for example) AFSCME is even bothering with another contract vote. What’s there is not worth the paper it’s written on if the state just shrugs and says, sorry, we don’t have the money. Apparently, that can happen with the pension payments, too. So I’m confused about why we’re spending so much time worrying about a guarantee for *any* contract when we know — at least at this point — that it really is — literally — meaningless.
- Finally, if both contracts and constitutions can be upended at will — then how, exactly, does this fix anything? I would think Wall Street would see this, too — especially if they take a fairly holistic view of the machinations here — and wonder: it’s more fragile and uncertain now when contracts and constitutions are in play and — as I say — mushy — than it was a couple years ago when, at least, a contract appeared to be a contract and a constitution a constitution.
Which is a long way of saying (I think) that all this seems to do is introduce no certain short term fix and a whole bunch of long term uncertainty — for everyone: bond holders, workers, retirees, and — ahem — vendors.
But I dunno: Madigan gives the double thumbs up? Like it’s all good? Okay.
Comment by Frenchie Mendoza Friday, May 3, 13 @ 9:42 am
There’s a substantial difference between the guarantee in SB1 and the form in HB3411 (Nekritz-Cross).
SB1 has a guarantee that requires payment as established by law, with the trustees obligated to sue the state for lack of payment. But the problem hasn’t been the state’s lack of payment, it’s been the willingness to suspend or modify the existing law from 1995 requiring a continuing appropriation for pensions. So under SB1 the legislature could do exactly what it did in other years that it found the payment too onerous - they would modify the law for that budget year. There would be nothing to sue over since the modified payment would still be pursuant to law.
In contrast, the language in HB3411 and other bills including mine (HB2365) made the payments associated with the pension stabilization fund a constitutional pension benefit. That’s a step beyond current law or SB1 since a legislative change to the required payment would be a diminishment that could be enforced in the courts.
Comment by State Rep Mike Fortner Friday, May 3, 13 @ 9:42 am
Inserting an amendment specifically to solve this problem, would be an abuse of the proper role of the Constitution. This is a legislative problem to solve.
Comment by walkinfool Friday, May 3, 13 @ 9:44 am
–You’re coming up with excuses to oppose a bill that you already oppose.–
You’re right, but I think there is a broader issue at hand. That issue is a the fallibility of our judiciary. Whether they are included or not should not make a difference as they are supposed to decide/rule based on law, not politics and personal gain/loss.
The decision to exclude them I believe demonstrates that Madigan thinks that those judges wouldn’t make the proper ruling based on their self-interests. That bugs me a little; I’d like to think that our highest court would be above that.
Comment by iThink Friday, May 3, 13 @ 9:44 am
To Andrew I have wondered about that too. In the AFSCME case the federal court agreed it was a breached contract BUT it could not force an appropriation only a state court could.
But this is somewhat different because retirees are an interstate not an intrastate issue so perhaps it could go there is it ever gets there
Comment by RNUG Fan Friday, May 3, 13 @ 9:44 am
Politically the legislation is a win for the Democrats either way, constitutional or unconstitutional. The funding guarantee is politically helpful. It also could serve as a reference point in future negotiations if the courts rule against the changes–pension funding needs this further guarantee even if it has consequences for tax rates.
The Speaker’s comment about SC votes would be coverage to use in response to those who contend it was all a ruse to transfer blame to the courts for extension or expansion of the tax increase if the legislation is ruled unconstitutional–essentially “We were convinced what we passed was constitutional and had experts that advised us so.”
It will be interesting to see whether prior to a final SC ruling the State budget is formulated with an assumption that the savings are real from the pension changes.
Comment by east central Friday, May 3, 13 @ 9:45 am
Rep Louis Lang, one of Speaker Madigan’s right hand people, voted “No” on the Speaker’s pension bill amendment. Rep Lang receives quite a bit from AFSCME, so I understand the vote. Is there a split in the making with Madigan? Or does Lang have to seek a dispensation from Madigan so not to upset his contributors? How does this work?
Comment by Cook County Commoner Friday, May 3, 13 @ 9:51 am
By leaving out the judges the issue of equal protection under the constitution is raised in that one group is treated differently without any real justification. All members of all systems pay in under the pension act and there is no valid reason to treat one differently. It only strengthens the argument of being unconstitutional for all others. Thanks MJM.
Comment by retired and fed up Friday, May 3, 13 @ 9:51 am
My grandfather would do business solely on a handshake.
My father would do business STARTING with a handshake, followed with a signed written contract before any consideration would change hands.
I want a written contract, reviewed by my lawyers before I sign or agree to anything and certainly before any consideration changes hands.
Our kids are witnessing that a signed contract and even protections in the Illinois constitution are only games pieces to be manipulated at the will of the government, the same government that swore to uphold the laws of the land.
We are now witnessing the next step in the evolution of total distrust between government and its citizens.
Comment by Where will it end Friday, May 3, 13 @ 9:52 am
If the Illinois Supreme Court rules this unconstitutional bill constitutional, what are the chances it will be taken up by the US Supreme Court? Are there instances when the US SC overrules the State SC in cases such as this - that is, when it violates the State constitution, but for ‘exceptional’ reasons like Madigan outlined at the beginning of the bill?
Comment by Jechislo Friday, May 3, 13 @ 9:53 am
–It only strengthens the argument of being unconstitutional for all others.–
I don’t think it does.
On further consideration - maybe MJM, as others have posted above, is expecting this bill to be ruled unconstitutional and removing the judges gives them a little political cover. Perhaps with an unconstitutional ruling the perception would be a ruling based on self-interests, by removing them you take away that perception.
Comment by iThink Friday, May 3, 13 @ 10:00 am
Equal protection means all must be treated equally. Leaving the judges out treats them better than all others in the other state systems, all of which are included in the same pension act. Political cover should never be a reason to add additional constitutional violations as MJM, an attorney,should know. He took an oath to uphold the laws of the State and the Constitution just like I did.
Comment by retired and fed up Friday, May 3, 13 @ 10:12 am
You really can’t dictate today what a General Assembly will do 20 years from now?
That’s an excuse to do nothing on everything.
Comment by wordslinger Friday, May 3, 13 @ 10:28 am
I don’t believe we can’t guarantee employer pension payments. Just combine the bond indenture language, continuing appropriation language, ability to sue language and you have a pretty ironclad guarantee. I do still believe the pension “crisis” could be fixed by constitutional bill and SB1 ain’t it.
Comment by Soccertease Friday, May 3, 13 @ 10:31 am
“Our kids are witnessing that a signed contract and even protections in the Illinois constitution are only games pieces to be manipulated at the will of the government, the same government that swore to uphold the laws of the land.”
well said , ” Where will it end”. who scores political points from this maneuvering and who doesn’t, is irrelevant in light of the damage being done to the political process. the fact is that Illinois is in a tight spot and the only real “fix” is more money, a lot more money. the sooner everyone faces up to that issue the better.
Comment by ejhickey Friday, May 3, 13 @ 10:32 am
Cincy @ 9:35,
Right now my gut says the COLA cuts in the Madigan version isn’t going to make the C word cut and, based on the Appellate order yesterday in Marconi (sp?), I’m not sure the original Cullerton choice option will be found valid in the long run.
But that’s a gut call, not a reasoned analysis. I’m going to have to think about it some more.
Comment by RNUG Friday, May 3, 13 @ 10:36 am
re -State Rep Mike Fortner- @ 9:42 am:
I would add that SB-1’s guarantee in it’s current form is just one State entity dealing with another State entity. There is no way for an individual pension system member to force any action if the State entities fail to act as specified.
The others bills contained a provision for any member of the retirement system to bring legal action if the retirement system itself failed to do so … which is a big difference.
Comment by RNUG Friday, May 3, 13 @ 10:44 am
I don’t understand why folks are so easily dismissive of arguments against pension reduction. Yes, the bottom line is that I’m opposed because it financially harms my family and I. I’m extremely angry because this comes despite a constitutional “guarantee” of those benefits.
The proponents argue that we must “share the pain.” So it is a valid argument to counter that the proposals are not equitable by excluding judges. The judges are not being asked to share the pain.
The guarantee in the reduction proposal is being put forth by reduction proponents as some assurance that pensions will be protected in the future. It is critical to let folks know that this is false. We had the best guarantee possible in the constitution and they are attempting to ignore it to make up for the years of mismanagment.
We’ve all heard the old saw that there are only two things certain in life, death and taxes. However, we have expectations that we will not be lied to. When this happens, we look to legal remedies to right that wrong. Many of the offenses are even prosecuted by government. Unfortunately, sometimes the offenses are committed by government employees.
It is imperative that people understand the falsity of this alleged guarantee. Support it because you want to free up money for other causes or because you hate public workers; but don’t support it because it guarantees future benefits. This is a cruel hoax.
Comment by Norseman Friday, May 3, 13 @ 10:46 am
Jechislo
The US Supreme Court does not deal with State Constitutions unless the State Constitutions violates some federal provision.
Comment by Bigtwich Friday, May 3, 13 @ 10:48 am
The US Supreme Court could review an Illinois Supreme Court decision that a statute did not violate the federal constitution’s impairment of contract clause.
The US Supreme Court could NOT review an Illinois Supreme Court decision interpreting Illinois law (including Illinois’ constitution.)
Comment by Anonymour Friday, May 3, 13 @ 10:48 am
It is in our state constitution and no one should have the right to change it in anyway!!! I am ready to see the unions challenge this change of our pension system in the court of law. If they would have only paid the payments when came due, they wouldn’t be in such a mess.
Comment by Anonymous Friday, May 3, 13 @ 10:54 am
===That’s an excuse to do nothing on everything. ===
Exactly.
Comment by Rich Miller Friday, May 3, 13 @ 11:01 am
Because judges would be affected by the ruling they make, they can’t be trusted to rule by law? No other case has ever come up that might affect them in the history of the court? Ever?
Comment by Anonymous 1 Friday, May 3, 13 @ 11:04 am
Fortner is right! By not providing for a legitimate funding guarantee, the legislature sets the stage for a perpetuation of the sole purpose we are in this mess. To allow them to underfund the systems again. It is a perfectly logical reason to vote against the bill. If you are going to cut promised pension benefits the least you could do would be to give a guarantee that what is left will be funded.
Comment by One of Three Puppets Friday, May 3, 13 @ 11:22 am
Thanks, RNUG. I am really looking forward to your thoughts on the issue.
Comment by Cincinnatus Friday, May 3, 13 @ 11:32 am
I used to worry that Illinois was rapidly sliding its way down to being California.
If this is ultimately passed and upheld, we will have leap-frogged California and slid down to Venezuela
Comment by titan Friday, May 3, 13 @ 11:47 am
Cincy,
I’m not done mulling it over, but, the more I think about both versions, I don’t see an easy way of making either one pass muster as long as the IL SC stays consistent with past rulings.
Cullerton’s “choice” version is somewhat more likely to make it past a court ruling but realistically Madigan’s is probably a better political solution in that is only partially modifies things for existing members … everyone gets half a loaf and workers get some time to plan for the changes.
Slight digression / explanation … Everyone should go read the Appellate decision that Skeeter posted a link to yesterday. It was an interesting way of ducking the pension clause issue. They did reverse the lower court finding that retiree health insurance is protected by the pension clause, but they strongly implied there likely is a contractual right to retiree health insurance. That is to be determined by the lower court after gathering more documentation the Appellate court did not have included in the briefs. The instructions to the lower court make it pretty clear what the Appellate court thinks. So that might invalidate the Cullerton “choice” option because it could end up a choice between a constitutionally protected benefit (AAI) and a contractually protected benefit (health insurance) which would be no actual consideration … end digression.
The big catch to any bill is the IL SC’s statement that the rules in place at hiring plus enhancements granted by the GA are what apply to the pension contract (I may have paraphrased it a bit since I didn’t go pull the exact language today). Even if you take out any changes to existing retirees (in other words, scrap any COLA modification which is where most the savings are), there would still be a problem.
Both versions of SB-1 make changes going forward for existing employees. For example, the increased contribution rates of 1% this year and another 1% next year. That changes the existing terms without adding any consideration. Even if the union volunteers to do so (as they have), it doesn’t pass Cullerton’s “choice” logic because nothing was received for the additional contributions. Right now I don’t count the guarantee as consideration because there is really no way to enforce it; maybe a court will see it differently. Besides, the IL SC did say a member would have a right to sue the State if the systems were in imminent danger of failure … so if things get bad enough the retirees already have a path of legal recourse.
Other states have sometimes allowed wiggle room going forward on yet to be earned benefits. But IL so far has drawn a hard line. Taking existing law literally, the State is pretty much backed into a corner where the only choice for existing employees and retirees is to pay the bill … which is what everyone in the GA is trying to avoid to some extent.
But that’s just one layman’s opinion … and IL courts have shown restraint on these issues by making their rulings as narrow as possible, so no one can accurately predict what will happen. The courts could find a point all of us are overlooking …
Comment by RNUG Friday, May 3, 13 @ 12:09 pm
In fairness, I should have said “a lot” or “most” instead of “everyone” in the next to last paragraph. There are some Representatives and Senators who are working to pay the pension bill without diminishing existing benefits.
So much for the 3rd draft … should have read it again … lol
Comment by RNUG Friday, May 3, 13 @ 12:26 pm
As someone else said, the exemption of the judges is a valid topic of discussion because this whole debate has included exhortations to public employees to “share the sacrifice.” All sacrifice, no sharing.
Also, that new appellate court opinion remanding the case for further fact finding would seem to undercut the notion that something, anything needs to be tossed up to the Supreme Court for quick review. If the central issue is going to be a police powers argument, that’s going to require a long evidentiary hearing in the trial court with a battle of experts and then review by the Appellate Court.
Comment by fed up Friday, May 3, 13 @ 12:57 pm
Someone should score an interview with former appellate judge Gino Devito. He is very knowledgeable on this very subject.
Comment by foster brooks Friday, May 3, 13 @ 1:22 pm
RNUG, very well written. Nothing to add. I also would encourage folks closely following this topic to read that decision from yesterday.
As far as the guarantee, I may just be viewing it through a highly cynical prism, but as long as another GA can come in and “melt the iron,” it means bupkis to me.
Comment by Arthur Andersen Friday, May 3, 13 @ 2:18 pm