Thursday, August 2, 2012

Any Assault on Public Employees’ Rights and Benefits Is an Attack on the Entire Middle Class

How should we think about the legislative folly of the past several months? When we realize competent and ethical leadership does not exist in the Illinois General Assembly; that the majority of Illinois legislators pass bills they do not read because “doing something” is all that really needs to be done regardless of the disastrous consequences, then our belief in a representative democracy and justice becomes infected by cynicism and anger.

State legislators created the severe unfunded liability for the five public employees’ retirement systems in Illinois, and the current legitimacy of the Illinois General Assembly is doubtful. The current state government is attempting to isolate and offer up one group of people for hardship and, for many of these public employees, create a dispossession by way of intentionally-diminishing laws while perpetuating special exceptions and windfalls for the wealthy elite. This is a mockery of justice.

Public employees’ benefits and rights are guaranteed by a constitutional contract. It is critical that today’s policymakers protect legitimate expectations and concerns for all of the state’s citizenry, especially people who must be defended against those with excessive economic clout and inequitable schemes that pass prejudicial legislation benefiting the financial elite at the expense of everyone else.

House Bill 1447, for instance, offers public employees no ethical and lawful alternatives except to consent to the General Assembly’s demands by choosing between two illicit choices. I wrote about this issue weeks ago: a choice between health care and a compounded COLA is a blatant exploitation of influence to obtain an unwarranted advantage. HB 1447 is an unjust financial enhancement for the General Assembly because public employees will receive less than what the original vested right and benefit guaranteed them. It is an unethical and unlawful attempt for policymakers to circumvent a constitutionally-guaranteed contract. There are many antedated court cases to support this fact.

Moreover, to ignore the Fifth and Fourteenth Amendments of the U.S. Constitution and change laws that protect one group of people is to ignore due process and equal protection of the laws that guarantee contractual agreements. It is shameful that policymakers are willing to renege on a contract when they are the debtors. It is wrong to modify public employees’ contractual rights and benefits prospectively and retroactively when there are other ways to address the pension debt problem, such as through pension debt and revenue restructuring.

Legal and moral sense dictates that the Illinois General Assembly must align with the U.S. and State Constitutions and sanction the vested rights of its middle-class public employees. Policymakers must understand the economic, social and psychological harm that has already been done to this significant body of voters, of which there are approximately 690,000 members. It is a matter of moral and legal concern for every citizen of Illinois to pay attention to any proposed violations of rights and benefits, for “[an] injustice anywhere is a threat to justice everywhere” (Martin Luther King).

Consider the $1.6 billon reduction to Medicaid in Illinois. Consider the thousands of senior citizens who will lose their state health insurance coverage, thus endangering the poorest and neediest of the state’s citizenry. Think about the recent cutbacks in funding to Human Services and to primary, secondary and higher education while the Chicago Mercantile Exchange Group Inc., the Chicago Board Options Exchange Holdings Inc., Sears Holdings Corp., Champion Laboratories Inc., Boeing, J.P. Morgan Chase, Motorola and other large corporations were given tax breaks despite record profits. 

Each new tax break given to a financial exchange or corporation means less money to run state government and for payment of debts. It means middle-class citizens will pay the deficit through more cuts to services and through unwarranted pension reform.

If legislators can breach contractual obligations through legislation (such as HB 1447) and through a proposed constitutional amendment (HJRCA 49), the entire middle class will “pay” the consequences. There will be extensive and devastating economic outcomes for the entire State of Illinois if its public employees are robbed of their earned and constitutionally-guaranteed benefits.  The attack on public employees is an attack on the entire middle class:

“[Consider that] retired teachers create a $4.4 billion positive impact for the Illinois economy. The $3.1 billion in pensions and benefits paid to retired teachers and school administrators in Illinois during fiscal year 2012 created a sustained economic stimulus of approximately $4.432 billion that reached all 102 Illinois counties, according to a recent study conducted by the Teachers’ Retirement System. The study’s findings were released… in a new report entitled ‘Economic Impact Study of TRS Benefit Payments by Illinois Legislative District and County.’

“‘It is vital for everyone interested in the future of public pensions in Illinois to understand and remember that pensions and benefits are not just numbers in a ledger. For retired educators, their TRS benefit is often their only source of income because they did not participate in Social Security during their time in the classroom. Their pension enables them to remain active members of their communities,’ (TRS Executive Director Dick Ingram). ‘Retired teachers and administrators contribute greatly to the local economy and Illinois. Tax dollars invested in public pensions flow back into the Illinois economy with every monthly payroll’ (Ingram).

“The [economic impact] study used standard economic multiplier calculations, as well as state and federal statistics, and found [that the] total output from TRS pensions and benefits [was] $4.432 billion. This overall measure of economic activity includes all TRS payments, as well as jobs created and salaries earned in those jobs and increases in the state’s Gross Domestic Product.

“[Total] jobs created: 32, 042. This is the total number of full-time jobs supported by $3.1 billion in pensions and benefits pumped into the Illinois economy. [Total] earnings created: $1.22 billion. This represents the total salaries earned by persons employed in Illinois jobs that are fueled by TRS pension and benefit payments. Illinois GDP Value: $2.544 billion. This is the amount added to the Illinois Gross Domestic Product – the total value of goods and services produced within Illinois – due to TRS pension and benefit payments” (The Teachers’ Retirement System of Illinois).

Until people realize there is a systematic deconstruction of the middle class in Illinois (and across America), unethical legislators will continue to decimate middle-class citizens in exchange for corporate bankrolling. Members of IEA, IFT and AFSCME, et al. must tell their union leadership they will support them, but only if their rights and benefits are protected. 

The IEA, IFT and AFSCME, et al. must remain influential and relevant. Making any concessions will demoralize the membership and weaken the unions. Enfeebled unions would invite further attacks on public employees and would make unions and their membership irrelevant. All of us must remember that we cannot trust the Illinois General Assembly; we have 73 years of evidence that supports this opinion.

What unions must do is demand a pension debt restructuring and structural revenue reform. The state’s deficits are not the result of its state employees. They are the result of corrupt, incompetent politicians and business leaders in Illinois. 

-Glen Brown

Please become informed and review the following constitutional analysis:

Please read “House Joint Resolution Constitutional Amendment 49 Will Diminish Public Pensions”:

“Ralph Martire: Cutting benefits won’t fix the state’s pension crisis,” The State Journal-Register July 3, 2012:

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