Friday, August 9, 2013

For Any Illinois Politician or Corporatist Who Believes Pension Theft Is a Legal and Moral Obligation

Consider the concluding remarks from 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. READ the entire document. Address the corruption that caused the financial problems in Illinois these past decades, and reform the pension debt and the state’s revenue system. Respect and protect the constitutional contract with the state’s employees and retirees:


“…While writing this Article, the Chicago Tribune published an editorial stating that the Pension Clause as a constitutional provision ‘is not a suicide pact’ (623). The phrase is quite curious as it suggests that when push comes to shove Illinois’ present economic circumstances should drive how Illinois courts interpret the Clause, rather than its text, Convention history or relevant court decisions (624). Courts, though, ‘sit to determine questions on stormy as well as calm days,’ (625) and the Constitution was upheld during the Great Depression (626).

“Indeed, perhaps this debate over the Pension Clause is, as Eden Martin of the Commercial Club candidly stated, ‘Not about the law at all, it’s about the politics and arm-wrestling over money’ (627). That very well may be true for some stakeholders.  This is Illinois after all.

“There is, however, more at stake here—the rule of law in Illinois and keeping promises.  This Article opened with a quote from Franklin MacVeach, a former president of the Commercial Club, and his statement that a ‘contract breaker is an utter misfit as a citizen or a business man’ (628). He made this statement in a speech to the Cincinnati Commercial Club in 1905 about labor unions.  As he put it, ‘until contracts become sacred with all unions—until the public mind believes union contracts to be good as gold—unionism will not be finally accepted by either the employers or the people’ (629 ). MacVeagh then went on to extol the virtue of one union official who not only refused to break his union’s contract, ‘but used every influence of his personal authority and that of every friend he could rally about him to avert what he considered the dishonoring of his people’ (630).

“It was this same sentiment that drove public employee groups to advocate for the inclusion of the Pension Clause in the 1970 Constitution.  As the Executive Director of SURS stated in a letter to Delegate Henry Green in July 1970, while the ‘General Assembly has done an excellent job in funding its own retirement system obligations,’ it ‘has failed to meet its commitments to other public employees’ and ‘created such a staggering liability for future taxpayers that the extra load during an adverse economic period may require the public to renege on its obligations to its public servants’ (631). Unfortunately, 40 years later, not much has changed, and Illinois now finds itself on a precipice of what was foreshadowed—choosing to either honor the promise embodied in the Pension Clause or bow to the expediency of the moment.  These are the ill effects of decades of skipping pension contributions to avoid tax increases and service cuts—a circumstance Illinois Governor John Peter Altgeld described long ago as the ‘cost of [getting] something for nothing’ (632).

“…The rule of law is clear.  The Pension Clause not only makes a public employee’s participation in a pension system an enforceable contractual relationship, but also constitutionally protects the pension benefit rights contained in the Pension Code when an employee joins a pension system, including employee contribution rates.  The Clause also safeguards pension benefit enhancements that are later added during employment.  Further, the Clause bars the General Assembly from adversely changing the benefit rights of current employees via unilateral action.  And, the Clause ensures that pensions will be paid even if a pension system defaults or is on the verge of default.  The Clause’s plain language, the framers’ original intent, and voters’ understanding of the provision, as well as court decisions interpreting the Clause, show these conclusions to be correct and Sidley’s analysis erroneous.  

“While welching on its pension obligations is not an option for Illinois, legitimate contract principles provide a solution to mitigate this crisis.  The Pension Clause will become a ‘suicide pact’ only if individual citizens are purely self-interested and admit no obligation to the common good (633). By adopting the Clause, the drafters and voters weighed, measured, and found wanting the current claim that it is unfair to pay these pension obligations (634). Public employees have paid their required fair share of pension costs; it is incumbent on the State to meet its end of the bargain.” 


623 See supra note 347. Editorial, The suicide pacts, CHICAGO TRIBUNE, (Nov. 27, 2010) available at http://articles.chicagotribune.com/2010-1127/news/ct-edit-pension-20101127_1_suicide-pacts-retirement-deals-unions (last visited Feb. 22, 2011).
624 See Terminiello v. City of Chicago, 337 U.S. 1, 37 (1949) (Jackson, J. dissenting) (“[t]here is a danger that, if the Court does not temper its doctrinaire logic with a little practical wisdom, it will convert the constitutional Bill of Rights into a suicide pact.”).  
625 626 627 WILLIAM O. DOUGLAS, THE COURT YEARS, 1939 TO 1975: THE AUTOBIOGRAPHY OF WILLIAM O. DOUGLAS 55-56 (1981) See supra note 24-24, 541 and accompanying text. Editorial, Pension bomb still ticking, QUAD-CITIES ONLINE, (Jan. 18, 2011) available at http://www.qconline.com/archives/qco/print display.php? Id=52701 (last visited Jan. 19, 2011).
628 629 630 See Address of Franklin MacVeagh, supra note 2. Id. at 30. Id. at 31.
631 632 See supra note 100-01 and accompanying text. JOHN PETER ALTGELD, THE COST OF SOMETHING FOR NOTHING 131-32 (1904) (“Every thoughtful person who reads this book must realize that nothing can be had without cost, and that the accounts of the universe are adjusted and balanced so that in some way everyone must, sooner or later, pay for what he gets.”) available at http://books.google.com/books?id=glImAAAAMAAJ&printsec=frontcover&dq=the+cost+of+something+for+nothing+altgeld &source=bl&ots=A_jG7CDlwE&sig=vcE2D2Lho1XrVYBcZda_g76pZG4&hl=en&ei=xQ1kTffeEsys8Aas_tzlCw&sa=X&oi
=book_result&ct=result&resnum=1&ved=0CBMQ6AEwAA#v=onepage&q&f=false (last visited Feb. 22, 2011).  
633 William Atwood, Commentary, Law says state can’t renege on pensions, CHICAGO SUN-TIMES (Feb. 18, 2011) Available at http://www.suntimes.com/news/otherviews/3876426-417/law-says-state-cant-renege-on pensions. html? print=true (“This arrangement—lower salaries for state employees in exchange for a constitutionally guaranteed pension—allowed the state to balance its budget, allocate resources to other state needs and provide critical public services. * * * Today, with the state facing severe budgetary constraints, some are arguing that these pension obligations be discounted or ignored.  That approach, however, is simply not legally or morally tenable. * * * For the state to consider balancing its books by denying promises made to generations of public services—a pledge memorialized in the state constitution—would be an injustice.”).  
634 See V Proceedings 4516 (statements of Delegate Borek, an opponent of the Clause) (“I regret that I must vote no [on the Pension Clause].  I objected very much to section 5 [i.e., the Clause], since I represent six out of seven people who are not mentioned as a guarantee in the constitution with their pension system.”).  See IV Proceedings 2928 (Delegate Borek) (“Let’s look at it [i.e., the Clause] this way: We’re told on this floor that one out of every seven people are [sic] public employees.  By this amendment we are doing special legislation protecting one out of seven.  What happens to the six out of seven that do not get this constitutional guarantee?  They’ve got to be resentful and vote against this.”).  Despite Delegate Borek’s statements in opposition, Convention delegates adopted the Clause by a vote of 57-36-6 on July 21, 1970, and again by a vote of 99-3-2 on
August 31, 1970.  See IV Proceedings 2933 & V Proceedings 4516. 


IS WELCHING ON PUBLIC PENSION PROMISES AN OPTION FOR ILLINOIS? 
AN ANALYSIS OF ARTICLE XIII, SECTION 5 OF THE ILLINOIS CONSTITUTION
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