Monday, December 2, 2013

Illinois Senate Bill 1, the So-called “Pension Reform” Bill (or Attempt to Break a Constitutional Contract with Public Employees and Retirees)















So here is the bill created by the liars and thieves of the current Illinois General Assembly, those who are attempting to renege on their legal and moral responsibilities: a bill that will cut and suspend the cost-of-living adjustment (COLA), not only for current public employees but for retirees as well; a bill that will change the date when an employee (who is now under the age of 45 years old) can retire with full benefits; a bill that will reduce the amount of pensionable salary; a bill that will contain an inefficient, inadequate self-managed or defined-contribution savings (401k) plan option, then freeze the existing defined-benefit pension and destabilize the defined-benefit pension system; a bill that will remove all pension matters from collective bargaining (except for the employer’s share); a bill that will challenge a legal and moral contract that is guaranteed by the Illinois and United States Constitutions… (1)

We knew this day would come and that political and corporate opportunists, who have no legal or moral concerns except their own, would be eager to break a constitutional contract with public employees.

Even so, let us remain confident the Illinois Supreme Court judges will uphold the Illinois and U.S. Constitutions (2) as they have in the past; that the Illinois Supreme Court judges are not capable of illegal and immoral thievery like the political opportunists who voted for SB 1 on December 3rd, though Madigan/Cullerton and other committee members would have us believe Illinois Supreme Court judges are incapable of ignoring their own self-regard and, thus, had to be excluded from the bill.  (According to Ann Lousin, a professor at the John Marshall Law School in Chicago who helped draft the Illinois Constitution in 1970, “Leaving the judges out of pension reform: ‘I would call this buying off the judges. It’s a very sad situation…’”).

Indeed it is, but let us remain confident The plain language [of Article XIII, Section 5 of the Illinois Constitution, commonly called the Pension Clause] indicates that an employee’s pension payments and other membership entitlements are ‘contractual’ rights that may be altered [only] through mutual assent via contract principles…; [that] the [Pension] Clause’s prohibition against diminishment and impairment is cast in absolute terms.

And let us remain confident “The [Pension] Clause on its face does not support the claim that the legislature could utilize the pension system’s present unfunded liabilities as an [excuse] to cut the benefits of current employees participating in the system [as implied in the preamble of this bill]… [For] the Illinois Supreme Court [had previously] instructed, that ‘general language in a [judicial] opinion must not be ripped from its context to make a rule far broader than the factual circumstances which called forth the language’…

In 1982, the Appellate Court in Kuhlmann v. Board of Trustees of the Police Fund of Maywood, again relied on Kraus [v. Board of Trustees of the Police Pension Fund of the Village of Niles, 1979] as well as Ziebell [v. Board of Trustees of the Police Pension Fund of the Village of Forest Park, 1979] to fashion the following rule regarding the Pension Clause’s scope:

“[A]ny alteration of the pension system amounts to a modification of the existing contract between the State (or one of its agencies) and all members of the pension system, whether employees or retirees. A member is contractually protected against a reduction in benefits. By the same token, a member cannot take advantage of a beneficial pension change without providing consideration [something of value given in return where both parties agreed] for the contractual modification…” (Eric M. Madiar, Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate, IS WELCHING ON PUBLIC PENSION PROMISES AN OPTION FOR ILLINOIS? AN ANALYSIS OF ARTICLE XIII, SECTION 5 OF THE ILLINOIS CONSTITUTION).

Let us also remain confident that when the Illinois Supreme Court reviews “The plain language of the Illinois Constitution’s Pension Protection Clause [Article XIII, Section 5 that] states, ‘Membership in any pension or retirement system of the State… shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired,’ as courts in this State have confirmed, this language is crystal clear. Public employees become members of a pension system at the time of hire or shortly thereafter and, once they become members, their pension rights are set and cannot be ‘diminished or impaired…’

‘“Not surprisingly, as noted in a 1996 decision (McNamee v. State of Illinois), the Illinois Supreme Court has ‘consistently invalidated amendments to the Pension Code where the result is to diminish benefits’ to which state employees acquired a vested right when they entered the pension system…

“[Until now,] the Governor and the General Assembly have been careful to comply with the Illinois Constitution’s Pension Protection Clause, as well they should [respect all constitutional contracts]. The alternative would be a short-lived pension reform that is invalidated by court order after protracted litigation, which would be a disservice to the taxpayers” (Gino L. DiVito, in a Letter addressing a Chicago Tribune Op-Ed article by Eden Martin of the Civic Committee of the Commercial Club of Chicago, April 13, 2010).


“[In spite of previous judicial decisions, there are policymakers who insist upon abandoning] the fundamental principle that the rules of the game for contracting parties are not to be changed midstream… This is especially hard to comprehend when public employees have diligently and faithfully paid their contributions while their government employers have failed to pay their required share. Indeed, for decades, [Illinois legislators have] treated [the public] pension systems as a credit card to pay for government services and avoid tax increases or service cuts...” (Eric M. Madiar (2012). Public Pension Benefits Under Siege: Does State Law Facilitate or Block Recent Efforts to Cut the Pension Benefits of Public Servants? ABA Journal of Labor& Employment Law, V. 27, no. 2, 179-194. Retrieved December 7, 2012 from the American Bar Association.

It is disconcerting that too many Illinois policymakers are unscrupulous. “For [Illinois] lawmakers, it is simply politically more palatable to unilaterally cut pension benefits for public employees and retirees than to raise taxes, cut services, or both… [Even though 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.

“[Undoubtedly, Illinois policymakers] and their instrumentalities have promised pension benefits to their [public] employees; those employees have relied on those long-standing promises; and as a result the citizens of [Illinois] have benefited from the services provided by those employees [throughout the years]. There is no sound public policy reason to conclude that these 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,” [especially since billions of dollars that should have been paid to the public pension systems have been stolen]” (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. Retrieved December 9, 2012. 

It is a flagrant injustice when policymakers like Michael Madigan (since 1971), John Cullerton (since 1979), Bill Brady (since 1993), Jim Durkin (since 1995), Christine Radogno (since 1997) Elaine Nekritz (since 2003) and others who are responsible for the state’s fiscal morass want to challenge an existing constitutional contract and force public employees and retirees to accept a substantial diminishment of their constitutionally-guaranteed pension that was lawfully earned; moreover, it is a brazen injustice when a governor can roll back the corporate billionaire’s and millionaire’s taxes, lacerate the state’s budgets, and sign into law a diminishment of public employees’ and retirees’ only pension. Ironically, none of these transgressions will address the state's inadequate revenue system and the state's pension debt problems.

I have said many times to possess a right to a promised deferred compensation, such as a pension, is to assert a legitimate claim with all Illinois legislators to protect that right. There are no rights without obligations. They are mutually dependent. Fulfilling a contract is a legal and moral obligation justified by trust among elected officials and their constituents.

SB 1 is a foul, insensitive attack on public employees’ and retirees’ rights to constitutionally-guaranteed benefits. An unconscionable challenge of those rights and benefits is a serious threat, not only to current public employees and retirees and their families but, to every Illinois citizen. A pension is a contract. Breaking a contract can never be legally or morally justified.

(1) “No State shall…pass any…ex post facto law or Law impairing the Obligation of Contracts…” (The Constitution of the United States, Article 1—Limitations on Powers of States, Section 10).  

“No ex post facto law, or law impairing the obligation of contracts…shall be passed” (The Constitution of the State of Illinois, Article I—Bill of Rights, Section 16). 

“Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired” (The Constitution of the State of Illinois, Article XIII—Pension and Retirement Rights, Section 5).

“Each prospective holder of a State office or other State position created by this Constitution, before taking office, shall take and subscribe to the following oath or affirmation: ‘I do solemnly swear (affirm) that I will support the Constitution of the United States, and the Constitution of the State of Illinois, and that I will faithfully discharge the duties of the office of…to the best of my ability’” (The Constitution of the State of Illinois, Article XIII—Oath or Affirmation of Office, Section 3).  

(2) Note there are several antedated court cases that uphold the Illinois Constitution (link: Challenging Public Employees’ Earned Constitutionally-Guaranteed Benefits: Antedated Illinois Court Cases).

-Glen Brown


To the so-called senators and representatives who voted for SB 1:

Public employees are responsible and resolute, and they are outraged by this current legislative rashness. They will oppose this injustice without hesitation, and they will defend untiringly the benefits they have earned and their dignity and self-respect through unified engagement and compelling legal action. 


30 YES Votes for Senate Bill 1 in the Senate: 
Althoff
Biss
Brady
Connelly
Cullerton, J
Cunningham
Harmon
Hunter
Jacobs
Jones
Kotowski
Lahood
Landek
Martinez
McConnaughay
McGuire
Morrison
Mulroe
Munoz
Murphy
Oberweis
Radogno
Raoul
Rezin
Sandoval
Silverstein
Stadelman
Steans
Syverson
Van Pelt

24 NO Votes for Senate Bill 1 in the Senate: 
Barickman*
Bertino-Tarrant*
Bivins*
Bush*
Cullerton, T.*
Delgado*
Dillard
Duffy*
Forby*
Frerichs*
Haine*
Holmes*
Hutchinson*
Koehler*
Lightford*
Link*
Luechtefeld*
Manar*
McCann*
McCarter*
Noland*
Righter*
Rose*
Sullivan*

*These 23 Senators also voted NO on SB 1 last spring.

Did Not Vote or Present: 
Clayborne
Collins
Harris
Hastings
Trotter



62 YES Votes for Senate Bill 1 in the House: 
Acevedo
Andrade
Anthony
Arroyo
Bellock
Bradley
Burke, D.
Burke, K.
Cassidy
Chapa LaVia

Conroy

Crespo

Currie

D’Amico

Davis, M.
Demmer
Drury
Dunkin
Durkin
Evans
Farnham
Feigenholtz
Fine
Flowers
Gabel
Golar
Harris, G.
Hatcher
Hernandez
Hurley
Jones
Kifowit
Lang
Leitch
Madigan
Manley
McAsey
McAuliffe
Mitchell, C.
Moylan
Mussman
Nekritz
Osmond
Reboletti
Sandack
Schmitz
Senger
Sente
Soto
Sullivan
Tabares
Thapedi
Tracy
Turner
Verschoore
Walsh
Welch
Wheeler
Williams
Willis
Yingling
Zalewski

53 NO Votes for Senate Bill 1 in the House: 
Beiser
Berrios
Bost*
Brady*
Brauer*
Brown*
Cabello
Cavaletto
Cloonen
Costello*
Cross
Davidsmeyer
Davis, W.
DeLuca
Ford
Fortner
Franks
Halbrook
Hammond*
Harms
Harris, D.
Hays*
Ives
Jackson
Jakobsson*
Jefferson
Kay
Lilly
Martwick
Mautino
Mayfield
McSweeney
Meier
Mitchell, B.*
Moffitt*
Morrison
Phelps*
Pihos
Poe*
Pritchard
Reis
Riley
Rita
Rosenthal*
Scherer*
Sims
Smiddy*
Smith
Sommer
Sosnowski
Stewart
Tryon
Unes

Did Not Vote or Present: 
Hoffman
Kosel (excused absence)
Gordon-Booth (present)
  

*These 15 Representatives also voted NO on HB 1154 (Cap public employees' pensionable salary), HB 1165 (Freeze and reduce public employees' COLA), and HB 1166 (Increase public employees' retirement age) last spring.
 

6 comments:

  1. The fact that we can't get a Corporate Transparency bill passed while a majority of public corporations pay no taxes to Illinois is testimony to the cowardice and corruption in this state. If the pension is in trouble, which I'm not sure it is, it's through no fault of the teachers and other public employees. It's the fault of the legislatures hidden away in Springfield and the hatred for anyone or anything that is not privatized. While so many public employees are just getting by on their pension, public corporate executives make undeserved millions upon millions as they extort tax breaks and threaten to leave the state if they don't get what they want, , This is all just testimony to the utter corruption in Springfield. Meanwhile, the right-wing front groups, like the Illinois Policy Institute, are angry because they didn't destroy our pensions completely. Hypocrites that they are, they say their's no money for pensions, but they want all that invisible money moved into 401Ks. Explain that one. Our state and our country have totally lost their moral compasses and just answer to the highest bidder.

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  2. I find this whole situation to be a strong statement that the political system in this state (actually in this country) is in need of replacement. I am a recent retiree (state employee). I can just imagine how successful I would have been had I told boss that although I had agreed to teach my assigned classes - an examination of my financial situation would not cover the increased cost of transportation - therefor I will only teach some of my assigned classes. I know that I would have been allowed to renege on my contractual agreement simply because I did not manage my money appropriately. (Right!!! - I would have been terminated - and rightfully so.) The pension problem is the direct result of poor judgement and poor fiscal management on the part of our state legislators and their corrupt antics to hide the problem until there is little chance of fixing it without a major tax hike for everyone and the drastic cutting of spending for services that are sorely needed. This is their error and they need to take responsibility for the situation. The cuts proposed to promised benefits is simply unfair and illegal. The diminished COLA will mean that as retirees age their pensions will be less and less capable of meeting expenses. These same retirees will be more and more unlikely or unable to subsidize their pension with earned wages as the value of their pensions decrease. How can anyone see this as a sound solution? The burden to fix the state pension system should be shared equally by all Illinois citizens - as the fact that our taxes were diverted from pension contributions to pay for other services - we all benefited. The only exception I would propose to sharing the burden through increased taxes and spending cuts would be that legislative pension benefits should be cut entirely until such time as the state pension system is in the black (after all, had their behavior been the act of a typical company executive - someone would be going to jail). I also strongly suggest that all state employees give serious consideration before voting to re-elect any and all legislators who voted 'yes' for SB1.

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  3. My state senator, Kotowski, who calls himself a democrat, voted yes. On his own website he pats himself on the back as a champion of government transparency. He says, “My goal with this legislation is to eliminate conflicts of interests and to ensure that Illinois government is transparent, ethical, and corruption free.” They introduced a 300+ page document Monday and voted on it Tuesday. Yeah, that sounds transparent and ethical to me. You said it best, Glen, liars and thieves, liars and thieves.

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  4. Ok, so for whom do I vote in this state anymore when there seems to be little difference between democrats and republicans? Is there a viable 3rd party candidate? No, right? I won't vote for Quinn now; a republican wouldn't be better; not voting at all is tacit consent. So what?

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  5. It was a sad day for Illinois on Tuesday. A large group of followers did exactly what Speaker Madigan wanted them to do. That group will now be responsible for wasting tens of millions of dollars litigating over the next months/years. Mikey has even suggested, not to worry he owns at least four on the Supreme Court! Enough of Illinois politics! Can't anyone stand up to someone who puts The Old Boss Daley to shame. He has manipulated the weak and unintelligent representatives and senators in the pension debacle. SB2404 saved billions and was not punitive. The unions all supported the bill and yet Mikey wouldn't call it for a vote! SB1 will save +/- the same amount and will change the entire complexion of education and teaching in this state. Not one legislator was strong enough to force Michael Madigan to call for an earlier vote. Not even the governor wanted to step on Mike's toes. The state wasted a summer of committee hearings, input and politics only to come back essentially to his original bill. Even the Senate President turned a 180 to get in line. Mike Madigan rules this state, including the governor’s office and only a small handful of politicians see the world as it should be. They were elected to make laws, not to pass a bill and let the courts decide? Use the bench to create a road map for pensions, that is what lawmakers do! Either change the Constitution and then pass a bill like this or pass the other bill, with no true fear of litigation. Either way, make sure the judges are not part of the so called compromise! How ridiculous and embarrassing for Illinois? I have NEVER voted for a republican in my entire life-next election will be a first for me. I will base my vote on one factor alone-how one voted on SB1.

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  6. The problem is that the Republican running for governor, Rauner, is as libertarian, anti-union, and far-right as you can get. Our hands are tied as voters. And, the qualified, those with integrity and some humanity, can't or don't run because, for one thing, they often don't have the money, and for another thing, the abuse and often false accusations they have to deal with in the corporate media are unbearable..

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