Monday, August 5, 2013

Another interesting comment by Tyrone Fahner of the Civic Committee of the Commercial Club of Chicago at the Union League Club on March 6, 2013

Fahner called Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate Eric M. Madiar’s “81-page tome… Nonsense.” For Fahner claims: “All of us is subject to… the police/fire safety… the deeds of anything, of anyone, are trumped when it comes to providing the basic needs of society: health, education, police and fire safety.” Fahner purposely forgets that Illinois politicians were able to “provide [for those] basic needs” in Illinois throughout the decades because they had stolen billions of dollars from the public employees’ pension funds to pay for them.
Before we review a few of Madiar’s salient points on this issue, let’s recall what Fahner had said about reneging on contracts in his interview with Phil Ponce on WTTW on April 25, 2012: “This [public pension financial mess] was not created by the people entitled to the benefits... Well, if this happened in the private sector… if someone didn't pay in the money… there would be prosecutions going.” Indeed, irony and hypocrisy abound in Illinois politics.

Madiar’s analysis of “deeds of anything, of anyone, [can be] trumped…”:

“…The Supreme Court would most certainly reject… [Fahner’s and the Civic Committee’s lawyers from Sidley Austin’s] public policy argument that the State somehow retains a reserved police power to abscond on its obligations to pension recipients should a pension system default… Illinois courts have concluded that the [Pension] Clause affords the legislature no such reserved power. Relying on Kraus [v. Board of Trustees of the Police Pension Fund of the Village of Niles (1979], the Supreme Court explained in Felt [v. Board of Trustees of the Judges Retirement System (1985)] that to accept the Attorney General’s argument ‘we would have to ignore the plain language of the Constitution of Illinois, reject the New York decisions on the constitutional provision which was the model for Section 5 of Article XIII, and overrule this court’s decision in Bardens [v Board of Trustees of the Judges Retirement System (1961)].’ As a New York court noted, ‘[a]lthough fiscal relief is a current imperative, an unconstitutional method may not be blinked.’

“[Moreover], a pension recipient would most likely obtain relief in circuit court through a mandamus action against the State Comptroller… [This writ is used when all other judicial remedies have failed or are inadequate]… While the Illinois Supreme Court has held that the Pension Clause does not provide pension participants with a constitutional right to a specific funding percentage, it undoubtedly guarantees them the right to receive the money due them at the time of retirement.

“In addition, the Supreme Court has recognized… that if a pension fund were ‘on the verge of bankruptcy or imminent bankruptcy’ and ‘benefits [were] in immediate danger of being diminished,’ then pension participants would have a cause of action in circuit court to enforce their right to receive payments. Since the Clause acts as a restriction on legislative power, it is enforceable by the courts.

“This conclusion comports with the drafters’ original intent, and the voters’ understanding that pension recipients would receive their full benefits. In addition, the Attorney General conceded and counsel for TRS in Sklodowski argued in its briefs that the Clause guarantees that pension participants could enforce their pension benefits in court and continue to receive pension payments from the State…

“In sum, if the Illinois Supreme Court were confronted with a circumstance where a pension fund was on the verge of default and pension payments were diminished, then the court would most likely permit a mandamus action to proceed and resolve that action in the same manner as Jorgenson v. Blagojevich [2004].  In that case, the court held that where a constitutional or statutory provision ‘categorically commands the performance of an act, so much money as is necessary to obey the command may be disbursed without any explicit appropriation.’  The court applied this principal to compel the State Comptroller to pay judges from the State Treasury, without an appropriation, the cost of living increase that was part of their constitutionally-protected salaries under Article VI, Section 14 of the Illinois Constitution.

“As noted, that provision bars the diminishment of judicial salaries just as the Clause prohibits the diminishment of pension benefit rights. Accordingly, the Supreme Court would most likely grant pension participants the same relief provided in Jorgenson by compelling the Comptroller to pay the needed funds from the State General Revenue Fund, especially since the State Pension Funds Continuing Appropriation Act requires automatic appropriations be made from the Fund to the five State pension systems…”

To review this issue in more depth, Click Here.

Is Welching on Public Pension Promises an Option for Illinois? An Analysis of Article XIII, Section 5 of the Illinois Constitution by Eric M. Madiar, Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate

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