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Pension case could be decided by end of the year

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* During a hearing in Springfield today, Sangamon County Judge John Belz said the pension reform case should be fast-tracked because of the Supreme Court’s decision that government employee health insurance premiums were protected by the state Constitution and couldn’t be raised. Kurt Erickson has details…

Belz told attorneys gathered for a hearing Thursday that the court’s decision in the health insurance case was like “an elephant in the room.”

“I can’t stick my head in sand and act like it isn’t there,” Belz said. […]

“As fast as we can move it along within reason the better,” Belz said.

“This can be wrapped up by the end of this year,” said attorney John Fitzgerald, who represents a group of retired teachers.

…Adding… From We Are One Illinois…

“Our members had an encouraging day in court, and we’re hopeful that this will be resolved soon in our favor. The Kanerva decision confirmed our long held belief that the pension protection clause of the constitution is absolute and without exception.”

posted by Rich Miller
Thursday, Sep 4, 14 @ 4:16 pm

Comments

Rich, a 6-1 decision is convincing, but not unanimous.

Comment by cover Thursday, Sep 4, 14 @ 4:34 pm
The importance of Kanerva in today’s matter related to the State’s defense that budget crisis necessitated this use of police powers. The Kanerva decision basically said that budget was irrelevant. Thus making the state’s police powers argument moot.

Comment by Norseman Thursday, Sep 4, 14 @ 4:34 pm
Sounds like today went pretty much as expected by one of the plaintiffs’ attorneys.

Comment by RNUG Thursday, Sep 4, 14 @ 4:38 pm
RNUG, it would have been better if Belz entered a summary judgment. He recognizes the elephant in the room so he should have dealt with it today. While he may be looking to speed things up, any delay is further increasing the legal expense for taxpayers and the plaintiffs.

Comment by Norseman Thursday, Sep 4, 14 @ 4:48 pm
The SJ-R story

http://www.sj-r.com/article/20140904/NEWS/140909736

Comment by RNUG Thursday, Sep 4, 14 @ 4:50 pm
Norseman, I agree and as both an RSEA member and a taxpayer, it’s some of my money (and presumably your’s also) that is paying for both sides.

I also agree that Kanerva changed to legal landscape. The specific quotes chosen by the ISC for use in the Kanerva ruling made it crystal clear the ISC doesn’t think much of / isn’t going to entertain any “police power” arguments from the State.

Comment by RNUG Thursday, Sep 4, 14 @ 4:56 pm
Gee, judge, what are you trying to say, lol.

Comment by wordslinger Thursday, Sep 4, 14 @ 6:00 pm
cover
Look for the next decision to be 7-0. The dissenter in the benefits case did not dispute the strong protection for pensions, just doubted whether medical insurance had that same protection.

Comment by Anon Thursday, Sep 4, 14 @ 6:06 pm
There remains a large number of retired folks who
met the 20 year requirement for healthcare premiums.
They are retired state employees that paid
into SERS & TRS. Their healthcare premiums
were not put in an escrow account. Will these
other systems have to file a separate lawsuit or
Will the court system step forward & rule that
these refunds come from the general revenue?

Comment by Anonymous Thursday, Sep 4, 14 @ 6:17 pm
While this news is encouraging, one has to wonder when and if this will ever truly be over. If the current reform is struck down, what will the legislature try next? The state of Illinois may not be the greatest place to live right now, but the state of Limbo isn’t a lot of fun either.

Comment by Jeanne Dough Thursday, Sep 4, 14 @ 6:31 pm
Imagine if We Are One would have endorsed SB 1 from the beginning on the premise of: yeah, it’s unconstitutional, let’s rush it to the court and strengthen labor’s hand.
Potentially the bill they fought against the most will make them stronger than ever.
It’s like an Obi Wan kind of thing.

Comment by Michelle Flaherty Thursday, Sep 4, 14 @ 6:44 pm
–While this news is encouraging, one has to wonder when and if this will ever truly be over. If the current reform is struck down, what will the legislature try next?–

Paying up. That constitutional language is tight. Illinois is a going concern with the ways and means to meet its contracted obligations.

Despite the hysterical propaganda from the screamers. the math isn’t all that dark, if you stick to the program like you’re supposed to.

The whole effort was an attempt to see what would fly when it came to walking away from debt. Now they know.

That’s the way some people do business. The Tribbies are a case in point.

Comment by Anonymous Thursday, Sep 4, 14 @ 7:06 pm
Actually, the pressure to pay is good. If — if! — Rauner wins, the pressure will force him to actually *make* the pension payments.

I suspect he’s already counting on skipping them and pretending like things are more dire than they really are.

Comment by Macbeth Thursday, Sep 4, 14 @ 7:31 pm
The state of Illinois systematically and intentionally created the Pension funding crisis. The pension clause was added to the constitution because of the fact that the start had already initiated the common practice of skipping pension payments before the Constitutional Convention. Way back then there were those who saw what the state was creating a big problem and the clause was added as a safeguard when the day came that the state tried to renege on its contractual obligations to it’s retired employees. The point is, the Pension crisis wasn’t created by a natural causes but was created by intentional behavior by the very same people who now want to invoke emergency police powers. The court is pretty clear on this. It is the job of the Legislature to budget the money to pay for Pensions, not the job of the Court. However when the Pensions are due to be paid they will be paid in full.

Comment by The Dude Abides Thursday, Sep 4, 14 @ 7:35 pm
Rich, you’re the consummate political insider, and yet, I truly believe, objective. While I was dismayed at your blunt “It’s your turn in the barrel” statement just prior to SB1 passing, I’m curious as to whether you think we retires and current employees have dodged the bullet? What say ye now? Truly curious and hopeful you’ll answer.

Comment by PublicServant Thursday, Sep 4, 14 @ 8:09 pm
Did anyone file a motion for a summary judgment?

Comment by Tom Joad Thursday, Sep 4, 14 @ 9:21 pm
- Anonymous - Thursday, Sep 4, 14 @ 6:17 pm:

Jugde Nardulli made it clear he expects the lawyers and the State to come up with a solution to avoid individual Illinois Court of Claims cases, which is what would have to be the process at the moment to refund already spent / lapsed Fiscal Year funds. Some member of the GA could always introduce a bill in mid-November to resolve it also. Plus I believe the SUUA has presented a request to the court.

At the moment, the best answer I can give non-SERS retirees is that people are working on it.

Comment by RNUG Thursday, Sep 4, 14 @ 9:23 pm
- The Dude Abides - Thursday, Sep 4, 14 @ 7:35 pm:

As you state, not only was the ISC crystal clear on their Kanerva ruling and their position on lack of funding, they did it by citing a number of quotes from the 1970 Con-Con, pretty much writing about 1/2 the eventual SB-1 decision (assuming the ISC even accepts the case for review).

I can actually see this dying with a whimper … Judge Belz ruling the SB-1 unconstitutional based on the Kanerva decision and the ISC declining to review.

Comment by RNUG Thursday, Sep 4, 14 @ 9:31 pm
Most people have assumed since Day One that this day was coming.

What’s next?

It won’t be pretty.

My advice is to celebrate quickly and modestly, because there is a three way battle brewing.

Comment by Yellow Dog Democrat Thursday, Sep 4, 14 @ 9:42 pm
RE:Imagine if We Are One would have endorsed SB 1 from the beginning
your argument is moot, all it takes is one member to sue( slip n sue)

Comment by foster brooks Thursday, Sep 4, 14 @ 9:49 pm
Who’d a thunk the constitution and contracts actually mean something and have serious consequences? For awhile they just seemed like something that just got in the way. Huh.

Comment by zatoichi Thursday, Sep 4, 14 @ 9:58 pm
- Yellow Dog Democrat - Thursday, Sep 4, 14 @ 9:42 pm:

Maybe you see the coming train wreck more clearly than I do, but here are some of the general scenarios I see eventually playing out.

1) If this case has reached final resolution by that point and Quinn survived the election, a lame duck session will rush through increased revenue while blaming it on the Illinois Supreme Court and the Constitution. This is probably the best case scenario.

2) Ditto #1, except Rauner is the Governor-elect. The lame duck session will do nothing to address the revenue shortfall and proceed directly to #3.

3) If it has not yet been resolved by inauguration, the Gov will be forced to truly decimate the FY15 budget. Like you said, we haven’t seen nothing like it yet. The next General Assembly will probably be the ugliest in memory; exactly how ugly will depend on who is Gov. And whatever eventually happens will probably occur at 12:01 AM.

Why anyone would want to be the sitting Gov or in the Legislature with what is gathering on the horizon is beyond me …

Comment by RNUG Thursday, Sep 4, 14 @ 10:07 pm
- Tom Joad - Thursday, Sep 4, 14 @ 9:21 pm:

A copy of the most recent filing, to strike the State’s affirmative defense claiming sovereign powers, can be found here:

http://www.suaa.org/KanervaLawsuit.php

IMO, this motion is intended to point out to the judge the only thing that was previously in question was the viability of the State’s “police powers” argument and Kanerva pretty much slammed that door shut.

This filing doesn’t specifically ask for summary judgment but I believe previous submissions did. In any case, Judge Belz is probably going to respond to some or all the motions at the next scheduled hearing on, I think, October 8.

However, the key date is November 4. Nobody, except the retirees, really wants this case actually resolved before then. Even judges are political and they won’t want to be accused of affecting the election one way or the other … even though reasonably informed people are pretty sure how the ruling is going to go.

Comment by RNUG Thursday, Sep 4, 14 @ 10:27 pm
- Anonymous - Thursday, Sep 4, 14 @ 6:17 pm:

Re-reading your comment and my answer, I should have been more explicit on the categories in my reply on the health insurance premiums.

SERS retirees (about 69,000) had their premiums escrowed and the refunds should be relatively straightforward.

SURS, GARS and JRS retirees (about 59,000 in total) did not have their premiums escrowed and my comments at 9:23 PM generally apply.

TRS retirees have never been part of the 20 year premium free plan; they receive their health insurance via TRIPS. Having said that, for some unknown reason, there were a group of about 1,000 “TRS” classified retirees receiving premium free health insurance. I don’t know why; maybe they worked for another branch of state government before or after joining TRS. Again, my remarks at 9:23 PM generally apply to that small group.

Comment by RNUG Thursday, Sep 4, 14 @ 10:40 pm
- PublicServant - Thursday, Sep 4, 14 @ 8:09 pm:

I would give Rich a pass for now and ask him again after the ISC rules on SB-1.

Comment by RNUG Thursday, Sep 4, 14 @ 10:49 pm
Foster, you missed the point. The unions fought a law that wil likely be unconstitutional and end up strengthening their interests. Had they simply said, yeah pass this unconstitutional plan and prove we are right, we’d be a couple years ahead of where we are now.
The point is to get this to the courts

Comment by Michelle Flaherty Thursday, Sep 4, 14 @ 11:02 pm
YDD, you’ve thrown out a nasty teaser with the “there is a three way battle brewing” comment. I certainly accept the premise that public sector workers will continue to be the focus of so-called reform measures focused on benefits and salaries. I can surmise the “three way” your talking about would be Cullerton, Madigan and the Governor. We’ve already seen a trial balloon from Cullerton. Madigan is always good at keeping things close to his vest so it’s anyone’s guess as to his draconian response. If Raunervich becomes Gov, his approach will be to push 401k and raising retirement age on new hires. He’d also work to ratchet back salaries. Quinn’s election will simply result in ever-changing positions depending upon the latest proposal from Cullerton and Madigan.

Comment by Norseman Thursday, Sep 4, 14 @ 11:33 pm
RNUG @ 10:40 pm

Those 1,000 or TRS retirees that receive premium-free
health insurance are, like me, most likely former IL State Board of Education employees

Comment by pipersls Friday, Sep 5, 14 @ 3:39 am
I suspect the GA will raise taxes; don’t know which one(s) but income tax comes to mind. And, it will *not* be their fault; watch for the spin they place on the need to increase taxes.

Thank goodness the courts seem to be doing the right thing.

Comment by Late to the Party Friday, Sep 5, 14 @ 5:52 am
- pipersls - Friday, Sep 5, 14 @ 3:39 am:

Thanks. Suspected it was something like that but didn’t know the details.

Comment by RNUG Friday, Sep 5, 14 @ 6:54 am
As a State retiree, I’ve wondered about the payment of interest on the money that has been taken from me. Haven’t heard much talk on this point except a brief mention in an article written after last month’s hearing. The question of attorney’s fees also seems relevant - where will the money for these come from? Sorry for the late posting.

Comment by RIO1945 Friday, Sep 5, 14 @ 7:09 am
- RNUG - Thursday, Sep 4, 14 @ 10:07 pm:

RNUG, do you think that between #2 and 3, the Tribune et al. will stridently editorialize for a Constitutional amendment that might further test the courts’ willingness to abide pensions changes for current employees/retirees? If so, would that add years to the wait for a final resolution to this issue?

Comment by Illinnoyed Friday, Sep 5, 14 @ 7:15 am
- RIO1945 - Friday, Sep 5, 14 @ 7:09 am:

According to what I heard one attorney publicly state, the amount of interest shown on the statements is minimal; I think he mentioned $3,000. He was going to review and ask for a fuller accounting.

As to attorneys’ fees, I think this is one of those “it depends” situations. Some of the attorneys were paid, at least partially, up front by various individuals and union or retiree organizations. At least one attorney was working on a contingency basis that also included a loan from one of the retiree organizations. What I heard was the RSEA attorney expected to be paid out of the escrowed SERS retiree funds. Whether the court orders the plaintiff’s fees paid by the State is yet to be seen.

Comment by RNUG Friday, Sep 5, 14 @ 7:21 am
- Illinnoyed - Friday, Sep 5, 14 @ 7:15 am:

They can lobby for it but I don’t see any future change making a difference to current employees / retirees. In past decisions, the ISC has been pretty consistent about the rules in place at hiring plus any enhancements granted by the State are the pension contract.

Comment by RNUG Friday, Sep 5, 14 @ 7:26 am
RNUG:

If Quinn wins re-election, just how many “lame ducks” do you expect to see in the General Assembly who are willing to vote for a tax increase? And how many returning legislators will want to give up their negotiating power by signing off on a quick fix?

You don’t think that the gaming folks want to be part of this solution?

You don’t think there are some Democrats who will want to see school funding resolved?

I doubt, seriously doubt, a lame duck solution.

Most folks think Quinn should have led with the doomsday budget this time, but it was the governor’s call (kind of) to lead with the tax hike.

I think those same rank-and-file members believe that there is a lot more “voter education” to be done.

Comment by Yellow Dog Democrat Friday, Sep 5, 14 @ 7:42 am
YDD,

They will have 2 months to get their ducks in a row; plenty of time to cut some deals. The sooner something gets passed, the longer the time for the public to forget.

So yes, I really do expect something if Quinn wins … probably a simple reinstatement of the 5% (or something close) income tax rate as opposed to what we really need, a comprehensive reform and restructuring of the entire tax system. And it may even be another “temporary” increase …

Comment by RNUG Friday, Sep 5, 14 @ 7:54 am
This post and the comments following is one of many reasons this place is the place to learn about government, governing, the law, and where all that intersects, and explained so a Dope like me can really understand what is going on, why, and where do we all go from here.

Thanks to all, I learned a lot, again, from a really great Crew.

Comment by Oswego Willy Friday, Sep 5, 14 @ 8:18 am
There will be a lot of action after the election. The income tax will be made permanent, There will be another construction bill with plenty of earmarks for picking up votes.Additional funding for favored agencies. Most, maybe all will be done after the new year before the new legislative year begins.

Comment by Tom Joad Friday, Sep 5, 14 @ 8:23 am
The first step should be to raise employee contributions by 67%.

Comment by Phenonymous Friday, Sep 5, 14 @ 8:59 am
- Phenonymous - Friday, Sep 5, 14 @ 8:59 am:

The first step should be to raise employee contributions by 67%.

You must be one of Madigan’s lawyers ? Stupid constitutional protections , right?

Comment by Roadiepig Friday, Sep 5, 14 @ 9:08 am
Roadiepig,

Would increasing employee contributions a diminishment of a pension benefit? How does chipping more money in as you work reduce your benefit when you retire?

Comment by Phenonymous Friday, Sep 5, 14 @ 9:15 am
Back in the late 90’s (when my fellow highway maintainers and I were moved into the alternate formula system ) our percentage rose from 4% to 8.5%. More than doubled, but came with “consideration” (higher yearly multiplier to allow employees to retire before the physicality of the job and due to the inherent risk associated with making your living standing in traffic). I didn’t complain then and gladly paint the extra amount. Try jacking up present employees from the typical 4% to 6.68% (or alternate formula employees from 8.5% to 14.2%) without ANY consideration and the state will be paying for lawyers in another destined to lose court case.

Comment by Roadiepig Friday, Sep 5, 14 @ 9:18 am
The percentages paid by employees are set up to find the system properly( of course that only works when the state puts THEIR share in, which until Quinn had only been done on rare occasions). Since the largest reason for the shortfall is the state’s failure to properly fund their portion, expecting to employees to pick up for their malfeasance is not a winning option in court. Don’t forget the state also gets out of paying social security for a majority of retires- that would be an automatic 6.5% the Feds would take , with no skipping payments allowed. They paid the bills with smoke and mirrors for years. They can’t anymore .

I get it. Nobody was happy with the tax increase of 67%. But by skipping state payments into the funds everyone who pays state taxes received lower taxes for decades . I hate the metaphor , but they did kick the can as far down the road as they could. Bills are due and they will be paid.

Comment by Roadiepig Friday, Sep 5, 14 @ 9:26 am
RNUG, the other members of that “TRS 1000″ would include certified teachers who worked at DOC or DHS along with employees of TRS. Wonder why they didn’t get escrowed?

Comment by Arthur Andersen Friday, Sep 5, 14 @ 12:54 pm
AA, the attorneys for the SERS plaintiffs requested the escrow.

Comment by Norseman Friday, Sep 5, 14 @ 1:27 pm
Has anyone viewed the actual Order of Judge Nardulli regarding escrowing the contested insurance premiums? It’s language would be telling.

Comment by Advocate emeritus Friday, Sep 5, 14 @ 1:55 pm
Arthur Andersen - Friday, Sep 5, 14 @ 12:54 pm:

- Advocate emeritus - Friday, Sep 5, 14 @ 1:55 pm:

To elaborate a bit on Norseman’s comments, as I understand it, the request to escrow the health insurance premiums was drawn up by attorney John Myers who represented a number of Merit Comp SERS retirees, including Mr. Kanerva. The request was very targeted and specifically asked that the premiums be escrowed for the class of MC SERS retirees. That request was granted early on by Judge Nardulli.

I wasn’t there and don’t know exactly how it came about, but CMS apparently applied the escrow order to all SERS retirees. If I was guessing, it was probably easier to do a blanket escrow than to isolate the MC retirees.

Comment by RNUG Friday, Sep 5, 14 @ 3:10 pm
- Arthur Andersen - Friday, Sep 5, 14 @ 12:54 pm:

I would assume because that group had mixed service and their final service was with TRS.

Comment by RNUG Friday, Sep 5, 14 @ 3:48 pm

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