Friday, January 10, 2014

Pension Reform Message to Illinois Association of School Administrators Members (from Executive Director Dr. Brent Clark)

Tuesday [December 3] was the 195th anniversary of when Illinois became the 21st state admitted to the union. It also may go down in state history as the day that the Illinois General Assembly voted to step across the line of constitutionality in an attempt to solve its fiscal woes on the backs of public employees and retirees.

We hoped this day would never come. We had been working toward a more reasonable negotiated solution to the pension problem, and actually thought we were very close to an agreement in May of 2012 before the cost shift issue caused it to fall apart. But we have been preparing for this day for a long time, having almost two years ago retained one of the state’s leading attorneys when it comes to pension and constitutional law. 

We have been communicating with that attorney, retired judge Gino L. DiVito, during the course of the pension reform discussion and he clearly believes that much of what is in Senate Bill 1 is unconstitutional, including the provisions that diminish the cost-of-living adjustments (COLAs), the pensionable salary cap and raising the retirement age. I’m paraphrasing, but Judge DiVito believes that the courts would have to ignore years of applicable case law and the intent of the pension protection language that was approved during the 1970 Constitutional Convention. 

In the next few days we will be sitting down with other stakeholders in the pension fight to map out a coordinated strategy. We won’t be able to reveal in advance that strategy for tactical reasons. I am sure you understand. But rest assured that we will be working in concert with other interested parties and following the advice of some of the best legal experts in the area of pension and constitutional law. 

How long the court fight will take is anyone’s guess, though most legal observers think it could be a year or even two to get a final resolution given the landmark importance of this case. 

Nothing in Springfield is ever as simple as the legislators’ rhetoric would have you believe. Does the state have fiscal problems? Yes, though much of it is self-inflicted. Was gutting the pension benefits of public workers, teachers and administrators the only answer? Obviously, it was not and Senator Kwame Raoul, who chaired the pension conference committee, admitted as much during the debate on the Senate floor Tuesday afternoon. It was, he said, what the “political climate” would allow, meaning that things like a tax increase or even adopting Ralph Martire’s idea of a revised pension ramp were not politically feasible at this time.

As I stated during a panel discussion during the Triple-I Conference in Chicago a couple weeks ago, I believe the action orchestrated by the legislative leaders had everything to do with the upcoming elections, a future tax increase and perhaps even a cost shift to local school districts. Consider this possible timeline:

1.         They passed pension reform barely 24 hours after the filing deadline for the March 2014 primaries. That was not a coincidence. By choosing December 3, they literally placed themselves as far from a potential primary opponent as possible. Couple that with the fact that most legislative districts in Illinois have been drawn to be “safe” districts and they insulated themselves as much as possible from an election challenge. 
2.     They know the law is headed for the courts, where it could possibly be tied up for one to two years.

3.     Because of the draconian elements of the bill that takes $160 billion away from pension benefits, they can make the case that the normal cost for pensions is going to go down in a dramatic way. That could pave the way for the cost shift after the November general election.

4.     If the pension reform bill gets overturned – as our attorney firmly believes it should – the normal costs already would have been shifted to local school districts and the state will be out of the pension business, leaving local districts and taxpayers to deal with the fiscal fallout.

5.     Also, if the pension reform bill gets overturned, the door will be open for a permanent tax increase that allows legislative leaders to blame the courts.

I realize all of that may sound conspiratorial, and I’m really not a conspiracy theorist. I’ve just been around the State Capitol long enough to never say never. After all, who would ever have thought that in the Land of Abraham Lincoln our elected representatives would do what they did Tuesday to public workers, teachers and school administrators? They not only broke a longstanding promise to workers and retirees, but in the minds of many they also broke their oath of office to protect and preserve the state constitution.

That is a battle that will be fought all the way to the Illinois Supreme Court, and I will keep you apprised as this continues to develop.  

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