Friday, February 21, 2014

The Arizona Ruling and the Attempt to Break a Constitutional Contract in Illinois

“The Arizona Supreme Court says the Legislature can't cut cost-of-living increases promised to state retirees. The ruling released Thursday [February 20] comes in a case brought after the Legislature cut the increases in 2011 for retirees in the state plan for judges and elected officials. A Superior Court judge ruled in favor of retired judges after they sued, but the state appealed. The Legislature cut the cost-of-living increases after the judges' retirement system lost money in the Great Recession and became badly underfunded. The retired judges argued the increases were a promised benefit and lower courts agreed. The high court agreed the increases are part of a promised retirement benefit and are protected by the pension clause of the state Constitution. That clause bars ‘diminishing or impairing’ public retirement benefits” (Arizona high court to rule on judges' pensions).

What does the Arizona ruling perhaps mean for public employees and retirees in Illinois? A hope that justice will prevail, though the judgment in Arizona is for judges (and Arizona is not governed by House Speaker Michael Madigan. Coincidentally, Arizona's House Speaker, Andy Tobin, will be exiting soon because of Term Limits).

Don’t forget, Madigan omitted Illinois judges from Senate Bill 1, and he stated "at least four members of the Illinois Supreme Court will approve [his] bill."

Madigan also said: “Judges were excluded as a practical decision. We anticipate this matter will be before the Illinois court system and Illinois Supreme Court, and the absence of the judicial pension system in the bill will relieve them of the burden of dealing with a conflict of interest.”

Of course, Madigan would have us believe Illinois Supreme Court judges are incapable of ignoring their own self-regard and, thus, they had to be excluded. Madigan must also believe Illinois Supreme Court judges are capable of thievery like the political opportunists who voted for breaking a constitutional contract.

There are seven states that have their constitution as the legal basis for protection of public pension rights under state laws. They are Alaska, Arizona, Hawaii, Illinois, Louisiana, Michigan, and New York.  The strongest constitutional language (which includes past and future accrual protected) can be found in the state constitutions of Alaska, Illinois, and New York.

As stated by Alicia H. Munnell, Director of the Center for Retirement Research at Boston College (2012): “[Only] a handful of states protect pensions under the contract theory. [They] have state constitutional provisions that expressly prevent the state from amending the plan in any way that would produce benefits lower than participants expected at the time of employment. Illinois and New York have such a provision...” (State and Local Pensions: What Now?). In Illinois, there are several antedated court cases that have upheld the Illinois Constitution (Challenging Public Employees’ Earned Constitutionally-Guaranteed Benefits). 

Eric M. Madiar, Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate, affirmed (in 2011): “A plain language reading of the Pension Clause’s text makes clear that governmental entities may not reduce or eliminate a public employee’s pension payments and other membership entitlements once the employee becomes a pension system member. At the same time, the plain language also indicates that an employee’s pension payments and other membership entitlements are ‘contractual’ rights that may be presumably altered through mutual assent via contract principles. Further, the Clause’s prohibitory language against the diminishment or impairment of pension benefits is cast in absolute terms and lacks any exceptions” (Is Welching on Public Pension Promises an Option for Illinois? An Analysis of Article XIII, Section 5of the Illinois Constitution).

There is nothing ambiguous or vague about the following:

“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).

“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). 

“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). 

“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).

All citizens of the State of Illinois have legal justification for their rights. As stated, 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 5th and 14th 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 (Illinois Pension Reform Is without Legal and Moral Justification).    

-Glen Brown

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