Monday, May 6, 2013

"The Illinois Constitution [should] impede pension reform"

“…For the constitutional battle, the most important part of the bill is an introductory ‘statement and findings.’ The lengthy passage is targeted at the clause in the state's 1970 constitution that describes public employee pensions as ‘an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.’

“Madigan's preamble argues that the state has a right to amend pension promises when other vital interests are at risk. It lists numerous fiscal woes facing Illinois as annual payments to its five pension funds top $6 billion. The General Assembly finds that the fiscal crisis in the state of Illinois jeopardizes the health, safety, and welfare of the people and compromises the ability to maintain a representative and orderly government,’ the bill states…”

Commentary, a reiteration:

The Illinois Constitution should impede pension reform. The state’s unfunded liability has increased to approximately $100 billion. Why? Nearly $50 billion is the result of legislators’ “diversion” of money from the public pension systems to pay for other services without increasing taxes.

All citizens of the State of Illinois are the victims of this fiscal morass caused primarily by past incompetent, unethical and negligent General Assemblies; they are victims today as well because of scheming Illinois legislators who are seizing political opportunity, via “pension reforms” that violate a constitutionally-guaranteed contract.

“One thing we cannot do is ignore the Constitution of Illinois… No principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem” (from JUSTICE RARICK who concluded that the General Assembly and the Governor had violated the Illinois Constitution when they attempted to eliminate the cost-of-living adjustments to judicial salaries provided by law for the 2003 and 2004 fiscal years. The circuit court declared that they did).

It is shameful and reckless when 62 state representatives who have sworn an oath to uphold the State and U.S. Constitutions vote for a bill that ignores and challenges a legal contract. Breaking a contract threatens the integrity of all laws that govern and protect all citizens of Illinois.

Any unilateral modification of the “Pension Clause” should be seen as “the result of a violation of fair dealing,” as an accommodation for “only” the General Assembly who have stolen money from the public pension systems for decades and are, thus, “avoiding a pre-existing duty rule” (Professor of Law, Emeritus, Claude D. Rohwer and Professor of Law, Emeritus, Anthony M. Skrocki, Contracts in a Nutshell).

“The significance of any modification of the “Pension Clause” is “the extent to which [public employees] will be deprived of the benefit [they] reasonably expected; the extent to which [public employees] can be adequately compensated for the part of that benefit of which [they] will be deprived; […and] the extent to which the behavior of the party [Illinois General Assembly] failing to perform or to offer to perform [or] comports with standards of good faith and fair dealing” (Rohwer & Skrocki).

The significant issue of Madigan’s recent pension reform is its attack on public employees’ rights to constitutionally-guaranteed compensation and the legislators’ obligation to safeguard those promises. An unconscionable constitutional challenge of those rights and benefits generates a serious threat to their security and sense of dignity as citizens and creates the unfair possibility for an economic disadvantage for a particular group of people and their families. This can never be legally or morally justified, especially when legislators have stolen money that was supposed to be paid into the public pension plans for decades

The promise to honor commitments and pay for the public employees’ pension is of “sufficient importance” to all citizens of Illinois. To pass Madigan’s pension reform is “an unequivocal manifestation of intention not to perform… legal duties…under a contract… When there is a duty of immediate performance of a promise, failure to perform in full is a breach” (Rohwer & Skrocki).

Public employees are promised certain retirement compensation. It is earned; it is not a gratuity. All citizens of the State of Illinois have legal justification for their rights. The foundation of their rights is the State and U.S. Constitutions that directly support any claims against them. State contracts are protected by the federal government. Understandably, the fifth and fourteenth amendments of the United States Constitution protect due process of law. The legal bases for protection of past-and-future public pension rights are established in both constitutions.

“It is worth noting the inequity inherent in cutting pensions promised to state and local public servants based on alleged underfunding that was substantially caused, in many cases, by funding “holidays” that government employers awarded themselves… The employees of governments are also taxpayers to the same governments and consumers of the government services that they themselves provide. A government contractually-based pension program, designed to be a permanent feature of the employment relationship and intended to provide definitely determinable replacement income to the government’s long-term workforce in retirement, is both sustainable and desirable on both economic and policy grounds...

“[Any] attempt to denigrate the validity of decades of judicial precedents about the binding nature of legislation establishing pension commitments to government employees and to motivate state courts to overturn long-settled premises about these commitments would impose its own, unjustifiable costs. The states and their instrumentalities have promised pension benefits to their employees; those employees have relied on those long-standing promises; and as a result the citizens of the states have benefited from the services provided by those employees.

“There is no sound public policy reason to conclude that promises – based on the reasonable expectations of the contracting parties – should not be fully protected by the laws prohibiting or limiting the impairment of contracts”  (Greenfield, Douglas L., Lahne, Susan G. (2012). How Much Can States Change Existing Retirement Policy? In Defense of State Judicial Decisions Protecting Public Employees’ Pensions. National Council of State Legislatures Legislative Summit, 1-16. from

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 of the state’s 693,000 public employees. It should be of vital concern for all citizens that the government of Illinois would want to prove its contracts are worthless, especially when the “most basic purposes of the impairment [of the contract] clause [Article XIII, Section 5] as well as notions of fairness that transcend the clause itself, point to a simple constitutional principle: government must keep its word” (Laurence H. Tribe, American Constitutional Law).

-Glen Brown

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