Saturday, March 24, 2012

Senator John Cullerton's Speech

Have you watched Illinois Senator John Cullerton’s rather cavalier speech given to the Chicago City’s Club on March 19th regarding the reduction of the state’s “substantial retirement costs” (   Did it also “keep you on the edge of your seat?” 
According to Cullerton, “rights are contractual in nature, so pension benefit rights can be changed IF the General Assembly offers public employees [in other words, the IEA/IFT leadership] something of real value, and public employees [the IEA/IFT leadership] accept [the state’s] offer… The proposition is, is [sic] you’re going to get something for giving up your future pension benefit.”
In exchange for eliminating the compounded COLA for current teachers and converting their cost-of-living adjustment to a “simple” one, in exchange for shifting the state’s normal pension costs to school districts (“having skin in the game”), and in exchange for extending a teacher’s years of employment  and having a salary cap in place before a teacher can retire with a pension, “the legislature could offer public employees a contractually-binding funding schedule…  So we’re asking the unions… to accept [our offer]… so we put incentives in there like our guarantee [sic] that we’re going to fund these pension systems in the future and, if we don’t, you could sue us…”(Cullerton).
As stated by Eric M. Madiar, Chief Legal Counsel to Illinois Senate President Cullerton and Parliamentarian of the Illinois Senate, “legislation enacted to unilaterally reduce the pension benefits of current employees would violate the Pension Clause based on the Clause’s text and origins, constitutional convention debates revealing the framer’s intent, contemporaneous news articles demonstrating voters’ understanding of the Clause, and a host of court decisions construing the Clause… While the Clause bars the General Assembly from adversely changing the benefit rights of current employees via unilateral action, these rights are ‘contractual’ in nature and may be modified through contractual principles. In sum, while welching on public pension promises is not an option for Illinois as some legal and civic commentators have suggested, legitimate contract principles provide a solution to mitigate this crisis” (Is Welching on Public Pension Promises an Option for Illinois? An Analysis of Article XIII, Section 5 of the Illinois Constitution 2011).
So what can the IEA and IFT offer by way of "legitimate" negotiation this spring on the issue that, according to Cullerton, “in order to make up this [continuing] funding shortfall, [the state is] obligated to pay more money into the pension systems, and that is having an effect on [the state’s] ability to balance the budget?” What can current and retired teachers (and other public employees) surrender that will pay off the state’s self-imposed debt to the pension systems and also diminish the state’s self-inflicted colossal financial liability that was the result of past greed, corruption, arrogance, incompetence and self-interest as evidenced by governors Thompson and Blagojevich, to name just a few?  We can only hope that the IEA and IFT leadership has an incomparable “plan” to offer in the remaining legislative sessions, and one that does not agree with Cullerton’s insouciant perspective to “welch on promises.”

See COLA (Cost-of-Living Adjustment): Is It Guaranteed in Illinois (March 14)
See also Illinois “Pension Reform” Mania (January 13)

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