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* UPDATED x1 * Veto session news could be dwarfed today

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Today could be a big one for #pensions in #Illinois - court decision on constitutionality of SB1 is *anticipated* this afternoon. #twill

— Amanda Vinicky (@AmandaVinicky) November 20, 2014

*** UPDATE *** One more day…

Pension ruling will be issues tomorrow at 2 pm; an hour-long hearing on it is just over. State argues police powers allow for pension cuts

— Amanda Vinicky (@AmandaVinicky) November 20, 2014

posted by Rich Miller
Thursday, Nov 20, 14 @ 10:27 am

Comments

Great.

Governor Quinn and his fellow supporters of this == fix == will now have about two months to fix the original fix, which never was a fix in the first place. Just like they planned, right? /snark

Comment by Formerly Known As... Thursday, Nov 20, 14 @ 10:42 am
Round 1 should be done today. The AG’s response and motion for summary judgment were so weak on case law, they took phrases out of context to try and make something out of their sows ear case.

Comment by Norseman Thursday, Nov 20, 14 @ 10:57 am
Big news, maybe, but not SO big. If the court finds SB1 unconstitutional then no doubt there’ll be an appeal to the ILSC. If they don’t, that’s a finding only on one of the two halves which would have to be in place for SB1 to go forward, and even then there would be an appeal. So it’s a step on the way, but it’s certainly not a final resolution.

Still, I’m looking forward to the ruling, and the reasons given for it….

Comment by UIC Guy Thursday, Nov 20, 14 @ 11:00 am
FKA: LOL

If we wanted to take a cynic’s view of a “hidden plan”, it would more easily be seen as a way to dump the problem in Rauner’s lap.

So much for the legal eagles from the Civvies.

Comment by walker Thursday, Nov 20, 14 @ 11:03 am
Not sure it’s big news unless it’s unexpected news. Big news will be when this system is fixed. That will take a while.

Comment by A guy... Thursday, Nov 20, 14 @ 11:04 am
I thought the judge was hearing arguments today. Decision might be several weeks after hearing.

Comment by Archimedes Thursday, Nov 20, 14 @ 11:10 am
A Guy, does the bank need fixing, if you borrow too much money from it?

Comment by PublicServant Thursday, Nov 20, 14 @ 11:17 am
=== PublicServant - Thursday, Nov 20, 14 @ 11:17 am:

A Guy, does the bank need fixing, if you borrow too much money from it?===

Or if you give out more than you put in? Or if some depositors co-opt the savings of others? Or if the account was meant to last 15-20 years and now people withdrawal for 40 years, more years than they deposited? Or your investments didn’t earn enough interest while your withdrawals went up? Or many withdrawals are taken by people who didn’t adequately deposit?

Things are so simple for you PS. If the bank runs out of money, does any of the rationalization matter? There is no mechanism for a forced bail out. If you’re 20+ years from retirement, but several years into the system, you might be willing to cut a more secure deal.

And to answer your ridiculous rhetorical question, yes, it does.

Comment by A guy... Thursday, Nov 20, 14 @ 11:27 am
Archimedes, you could be right. The arguments today are regarding motions for summary judgment filed by plaintiffs and defendants. There is an additional motion to through out the state’s reserved powers argument.

These motions have been briefed ahead of time which gives Judge Belz most of what he may need to render some judgment.

Tea leaf readers think the clear message sent by the SC in Kanerva that was dismissive of the reserved powers argument make it likely that the judge will start the train rolling to the SC today. That would come in the form of a favorable ruling on the plaintiffs’ motion for summary judgment. After Kanerva, the AG will not get another summary judgment win.

Comment by Norseman Thursday, Nov 20, 14 @ 11:37 am
walker - that is another way of looking at it with our cynical glasses on, lol.

My comment was not meant as a criticism of the court, but more as a, ==darned if you do, darned if you don’t==. Any verdict, for or against SB1, would have been advantageous to one candidate over the other. In situations like that, it seems prudent to hold the opinion until after election day and not be seen as granting an advantage to either candidate, even though the court is supposed to be immune to such outside considerations.

Comment by Formerly Known As... Thursday, Nov 20, 14 @ 11:59 am
A Guy

Everyone who is informed knows that not depositing the state’s payments to the pension funds created this problem. If you disagree, please explain how IMRF is a stellar program, over 80% funded (never having missed a payment). Those IMRF pensioners are living longer too, their investments took a hit too…..etc. Please explain.

Comment by Anonymous Thursday, Nov 20, 14 @ 12:14 pm
Anon, the IMRF fund is managed better in every way. While they’ve had some abuses, nothing coming close to the State systems. Most of them work longer. I grant you the state was a “deadbeat”, not even debatable. Shocking is how many of the creeps are still serving with the strong support of the people they’ve hurt the most. Please explain that.

Comment by A guy... Thursday, Nov 20, 14 @ 12:32 pm
The old court case said “The State isn’t obliged to fund the system to any given level, it is only obliged to pay the benefits as they come due.”

Someone explain to me why the following wouldn’t work.

We have the real debt of pensioners expecting checks. We also have the real debt of bonds that we sold to pay the pension payments. We also have the imaginary debt of all the payments missed to fund the system to whatever level was desired.

So pay the pensioners and service the bond debt. Once those are paid then start a payment plan on a schedule to fund the pension system to a realistic level, not the unrealistic 100% used to generate these numbers.

Will taxes have to go up yes, we the taxpayers of Illinois have enjoyed an artificially low tax rate for all of the things we want our taxes to fund.

Am I missing something obvious regarding the problem.

Comment by Kevin Highland Thursday, Nov 20, 14 @ 12:43 pm
^^^^nope^^^^

Comment by Anon Thursday, Nov 20, 14 @ 1:11 pm
- Kevin Highland,
Your basic idea would require at least one of the political parties to act in a fiscally and morally responsible manner. Such behavior appears to be beyond their capabilities. I have never seen a proposal from either party that began with … we should pay all bills. Rather, they both seem to begin with … we should look for ways to avoid paying our debt to (insert target group here) because we/they (insert self-serving excuse here).

Comment by ex-ISU Thursday, Nov 20, 14 @ 1:14 pm
==creeps are still serving with the strong support of the people they’ve hurt the most==

Had to laugh at that. Have you been hanging around us and eavesdropping? You are dead right. However, this last election was between Terrible and Horrible (with respect to hurting employees/retirees hopelessly stuck in the pension system through no fault of their own). Not vote and leave it to everyone else to decide for you? Vote for a guaranteed loser 3rd candidate? Write in? I guess what seems to come back among all the comments time after time is that the people sitting in our elected offices are scoundrels, of low moral character and aren’t worth anyone’s vote. What to do? Do you think it’s likely to change? Who do these elected people represent? They represent money, not people.

Comment by Anonymous Thursday, Nov 20, 14 @ 1:38 pm
=== Amanda Vinicky
@AmandaVinicky
Pension case oral arguments ongoing; Sangamon Co. Judge says it’s be irresponsible to rule from the bench. A written one coming Fri at 2 pm ===

Perception once again rears it’s ugly head. If he didn’t have a ruling in mind, he’d take longer than a day to ponder the oral arguments.

Looking forward to tomorrow afternoon.

Comment by Norseman Thursday, Nov 20, 14 @ 2:09 pm
Going to be a written opinion / ruling on Friday but, quite frankly, that quick a turnaround means the decision is most likely 90% written.

Then we get to see if the ISC takes the case or just lets the ruling stand.

Comment by RNUG Thursday, Nov 20, 14 @ 2:23 pm
I agree it will be a big decision re the pensions themselves but I think the only surprise will be how strong or weak the language is rejecting the State’s arguments.

Comment by RNUG Thursday, Nov 20, 14 @ 2:27 pm
===Had to laugh at that. Have you been hanging around us and eavesdropping?===
I’m an active precinct captain. This did not require eavesdropping. I have been hanging around. I’m willing to sympathize our way into a solution. It won’t be perfect. But it must be reliable.

Comment by A guy... Thursday, Nov 20, 14 @ 2:33 pm
Wish the appropriate court would get around to giving me back the money it took from my pension for insurance premiums.

Comment by Mouthy Thursday, Nov 20, 14 @ 2:34 pm
- Mouthy - Thursday, Nov 20, 14 @ 2:34 pm:

They stopped taking the health insurance premiums out. Now they’re working out the logistics to refund it. One of the big hangups is exactly how to deal with refunds to deceased pension system members; I want to know how they handle that because I’m currently tryign to handle such a situation.

We knew it wouldn’t be quick …

Comment by RNUG Thursday, Nov 20, 14 @ 2:53 pm
RNUG - Thursday, Nov 20, 14 @ 2:23 pm:

=Then we get to see if the ISC takes the case or just lets the ruling stand.=

I have also wondered about the ISC just letting the ruling stand, but I believe they will feel the need to take the case. Will be most interesting to watch. Of course, although I feel it is most likely known, we don’t with certainty know the ruling of judge Belz. The words used or not used may be the real story and not the ruling itself?

Comment by facts are stubborn things Thursday, Nov 20, 14 @ 2:55 pm
We may get 2 rulings tomorrow; the pension ruling from Judge Belz and the health care premium refund ruling from Judge Nurdulli.

Comment by facts are stubborn things Thursday, Nov 20, 14 @ 3:00 pm
that’s Nardulli.

Comment by facts are stubborn things Thursday, Nov 20, 14 @ 3:04 pm
Mr. Highland–Your ability to state the obvious clearly disqualifies you for Illinois government
The actuarial boogie man of the “unfunded” debt in the pensions was a excuse for the private sector to eliminate traditional pensions for employees and dump all into 401(k). Now, the same excuse is being used in government by those who want to shift money from the middle class to the wealthy–eliminate pensions and cut taxes for the rich. Just watch Rauner!

Comment by D.P.Gumby Thursday, Nov 20, 14 @ 3:20 pm
Mouthy, Facts is correct. The Kanerva case is being acted upon tomorrow.

Comment by Norseman Thursday, Nov 20, 14 @ 3:34 pm
@Kevin Highland - Thursday, Nov 20, 14 @ 12:43 pm:

=Am I missing something obvious regarding the problem. =

Well stated. The only thing you were missing was that it is the politics of it all. This whole pension issue has always been a legal and moral issue played out in a political system. We get elected if we give services without raising taxes (take it from pensions) and then when the money comes do blame it on the greedy retirees and pit one group against the other. Oh but we may still be a “land of Laws”. The truth does not change and facts are stubborn things.

Comment by facts are stubborn things Thursday, Nov 20, 14 @ 3:34 pm
@facts are stubborn things

I left out blame in the spirit of just focusing on a possible solution.

Comment by Kevin Highland Thursday, Nov 20, 14 @ 3:47 pm
“Will taxes have to go up yes, we the taxpayers of Illinois have enjoyed an artificially low tax rate for all of the things we want our taxes to fund.

Am I missing something obvious regarding the problem.”

The obvious thing you are missing is that the people of Illinois do not want to pay the level of taxes required to fix the problem. The candidate who was basically implementing your plan lost the election.

Comment by Pelon Thursday, Nov 20, 14 @ 4:05 pm
@Kevin Highland - Thursday, Nov 20, 14 @ 3:47 pm:
=I left out blame in the spirit of just focusing on a possible solution.=

totally understood. thanks

Comment by facts are stubborn things Thursday, Nov 20, 14 @ 4:08 pm
@Pelon - Thursday, Nov 20, 14 @ 4:05 pm:

=The obvious thing you are missing is that the people of Illinois do not want to pay the level of taxes required to fix the problem. The candidate who was basically implementing your plan lost the election. =

Yes, that is the politics of it, but the rule of law is another matter. That is why this whole thing is playing out the way it is. A political solution to a legal and moral problem.

Comment by facts are stubborn things Thursday, Nov 20, 14 @ 4:11 pm
@ Mouthy - Thursday, Nov 20, 14 @ 2:34 pm:

Me too. The justice system is steady by jerks, slow, and often a bit messy; however, in the fullness of time we will know all things. Translation….the money is coming! I look at it this way. I got a 2% raise in September and a 2% raise in October followed by a likely 3% increase in Jan and a bonus (premium refund)shortly after that. I must be doing really well at this retirement gig.

Comment by facts are stubborn things Thursday, Nov 20, 14 @ 4:20 pm
The idea of paying the actual benefits as they are due, as opposed to pre-funding the benefits as they are earned, is known as “pay as you go.” In fact, back in the 70’s and 80’s the state used 60% of “pay as you go” as their budget target for pensions - depending on employee contributions and interest income to make up the rest.

Now - here we are. TRS makes up a little over 1/2 of the pension bill. TRS benefits paid out are about $4.8 billion a year. Multiply by 2 = over $9 billion a year (not accurate - but a reasonable estimate without looking up each pension system).

That is more than the State is paying now under SB1 - so no easy solution there.

By the way - IMRF is 96.37% funded. The fund had the same problems as the State funds - actuarial changes, investment losses, etc. But it went into the recession being 100% funded, dropped to about 80% funded, and recovered to where it is now because all employers paid a surcharge for the last 5 years to bring funding back up - plus record investment returns. Since it was fully funded in the first place, the cost to employers to being it back was a surcharge of about 30% or so (depending on the individual employer).

The lesson is that maintaining full funding gives economic stability to the pension (with a major crisis causing a relatively minor increase in employer contributions) - underfunding for 54 years does not.

Comment by archimedes Thursday, Nov 20, 14 @ 4:32 pm
Right now, the closest thing to a “pension funding solution” at the State level that I can envision actually happeneing is going to be the “normal cost” shift from the State to the School Districts. That gives the State a bit of room to either raise slightly less revenue or to divert that money into quicker repayment of the arrears amount. Of course, all that does is move the current cost to the districts who, by and large, will have to either cut the heck out of their budgets / programs or raise the local school tax … and raising the local school tax will happen sooner or later, most liklely sooner in a lot of districts.

As I’ve said elsewhere, when all the smoke clears, Illinois taxpayers will be paying more in various tax revenue than they do today … and they won’t be happy because they voted for Rauner’s expanded spending / lower taxes magic fix. It’s too early to tell, but I’m willing to give 70:30 odds the voters in 2018 will like Rauner less than they liked Quinn this year.

Comment by RNUG Thursday, Nov 20, 14 @ 5:19 pm
@ - facts are stubborn things - Thursday, Nov 20, 14 @ 4:20 pm:

I got the 2% increases too and I hope the rest of your scenario comes to pass..

Comment by Mouthy Thursday, Nov 20, 14 @ 5:22 pm
=== “Sangamon County Judge John Belz said Thursday he will issue a decision Friday on whether the state’s pension reform law is constitutional.” Doug Finke ===

RNUG, if this is accurate and other reporters seem to be saying a constitutionality decision is what is expected tomorrow, I’m confident that we’re looking at victory. He’s considering summary judgment motions by plaintiffs and defendants. After the spanking Nardulli took from the Supremes in granting a summary judgement for the state in Kanerva, I don’t see Belz siding with the state’s motion. If he thinks the state has an argument, he would rule against the plaintiffs motion and set the case for further hearings.

Comment by Norseman Thursday, Nov 20, 14 @ 5:31 pm
Summary judgement for plaintiffs.
Supremes refuse to take the case.
Rauner attempts his version of freezing everything as it currently stands and 401k going forward.
Same court decisions for Rauners attempt.
Only thing left is Madigans plan to spread the pain to the locals.
Should have listened to him and saved 2-3 years of court costs.

Comment by Poster Thursday, Nov 20, 14 @ 6:10 pm
“Rauner attempts his version of freezing everything as it currently stands and 401k going forward.

Same court decisions for Rauners attempt.”

So, you think that the Court will rule that Rauner can’t fire *anyone* and make them re-apply under new job terms?

Comment by Chris Thursday, Nov 20, 14 @ 6:47 pm
Poster - 100% correct, me thinks.

Comment by Filmmaker Prof Thursday, Nov 20, 14 @ 6:54 pm
Rauner knows you can not touch the retirees but current employees he can bargain with on salaries etc. If you salary is 15% lower your pension will be lower.

Comment by facts are stubborn things Thursday, Nov 20, 14 @ 7:30 pm
-===raising the local school tax will happen sooner or later, most liklely sooner in a lot of districts. == Schools need their taxpayers approval before they can raise property taxes. Most of the time the taxpayers vote “NO”. The schools hands are tied when it comes to increasing revenue - they can’t. Most of the schools are currently broke or close to being broke now. Does anyone care about the students?

Comment by Mama Thursday, Nov 20, 14 @ 8:36 pm
-Norseman- That’s what I’m thinking

-Poster- That’s a likely way for it to play out

-Chris- Yep, Rauner can’t do that to existing employees. The ISC has been consistent the past 40+ that the terms in place at hiring, etc. apply. This is even the case for re-hires. A friend just got hired by the State in a coded position during the past year and they were placed on the “Tier 1″ retirement system because of a previous hiring / service time about 30 years ago. Rauner also can’t arbitrarily lower the wages either; there have been rulings that such action would constitute “diminishment”.

-Mama- I agree most people will normally vote against raising school taxes. The exception is when the choice is raise taxes or close the local schools … and that’s the choice a lot of school districts will be faced with over the next 5 years if the “normal cost” shift occurs.

Comment by RNUG Thursday, Nov 20, 14 @ 8:59 pm
@RNUG - Thursday, Nov 20, 14 @ 8:59 pm:

Salaries along with many other benefits, work rules, conditions etc. are a part of negotiations every few years with the unions. I was a AFSCME member in the alternative system, and we agreed to contributing more dollars to our pensions in exchange for other things. Current employees will have everything on the table and to protect jobs may decide to agree to higher contribution rates and lower or frozen salaries etc. If the courts overturn SB 1 then retirees are a different animal because they are no longer in the game — no changes. However, we will see pressure on our health care with higher co pays and deductibles etc. Higher costs for dependents as well. The point I am trying to make is that if you are a current employee your pension rights were vested once you started employment but there is much else on the table for the state to trade and bargain with that still can effect pensions.

Comment by facts are stubborn things Friday, Nov 21, 14 @ 8:57 am