“As state courts across the nation prepare to referee numerous public pension reform disputes, a gaggle of interested parties — from major corporations to the Koch brothers — will next week sponsor an expenses-paid conference on public pension reform for judges who may decide the cases’ fates.
“Conference funders, which include ExxonMobil, Google and Wal-Mart, could benefit from efforts to slash benefits for public employees. Alternative approaches to shore up state budgets would likely require higher corporate taxes, fewer corporate subsidies and reduced government services, all of which would be bad for business.
“The three-day gathering in a Charleston, S.C., hotel is hosted by George Mason University’s Law & Economics Center. The ‘Judicial Symposium on the Economics and Law of Public Pension Reform,’ according to a George Mason event description, is intended to ‘comprehensively outline the underlying structure of pension systems, address the differences between public and private pensions and detail the unfunded liabilities and potential bankruptcy issues arising from this crisis.’
“In all, about three dozen corporations — Ford Motor Co., General Electric Co., ConocoPhillips, drug maker Pfizer and the Dow Chemical Company also among them — are sponsoring the conference. Other funders include trade associations such as the American Petroleum Institute and the U.S. Chamber of Commerce, and conservative foundations such as the John William Pope Foundation and the Charles G. Koch Charitable Foundation.
“Dozens of individuals are also helping bankroll the gathering; some state and federal judges themselves are listed sponsors, including Utah Judge Samuel D. McVey and Harris L. Hartz of the 10th U.S. Circuit Court of Appeals…
“What is clear from the conference’s agenda is that attending judges will spend most of their time inside Charleston, S.C.’s Francis Marion Hotel listening to lectures and panel discussions led mainly by advocates of public pension reform…
“Two of the conference’s featured lecturers — Todd Zywicki, a George Mason University law professor, and Eileen Norcross, a senior research fellow at George Mason University’s conservative Mercatus Center — co-wrote a 2010 op-ed headlined ‘How public worker pensions are too rich for New York’s — and America’s — blood.’ The column decried unions’ efforts to thwart pension reform efforts…
“For a session on ‘Legal Questions Raised by Pension Reform,’ judges will listen to Amy Monahan, a University of Minnesota law professor. Monahan, who did not respond to requests for comment, has published research disputing court rulings that state statutes establishing a pension contract between states and employees cannot legally be broken. She wrote in a 2012 paper that ‘changes to future pension accruals should be legally permissible absent clear and unambiguous evidence that the legislature intended to create a contract.’
“Peter Kiernan, a New York attorney who co-wrote a recent report on public pensions, says arguments like these are exactly what judges will have to grapple with as pension reforms face legal challenges. In some states and cities, reforms have already reached the courts.
“Illinois, for example, passed legislation in late 2013 that cut retirement benefits for public employees. Unions have since filed several lawsuits, claiming that the pension changes violate the Illinois Constitution, which explicitly states that contractual pension benefits ‘shall not be diminished or impaired.’ Now the fate of Illinois’ pension reform efforts rests in the hands of the courts. How they rule could have nationwide implications.
“‘If the Illinois Supreme Court says that what the Illinois legislature did is constitutional and legal, then the logjam has been broken,’ [Attorney Peter] Kiernan said, stressing that judges will be ‘enormously important’ in resolving the pension reform dispute. ‘And you’re going to see all of those states attempt reforms with respect to current employees.’
“[There is a] corporate push for public pension reform.
“To be sure: Public pensions across the nation are in rotten shape… ‘Reform is necessary because it is creating an unsustainable burden on taxpayers,’ said Todd Maisch, executive vice president of the Illinois Chamber of Commerce. In Illinois, ‘I don’t think you fix the mess without pension reform,’ he said.
“Government officials find themselves left with difficult choices: Raise taxes and cut services to help increase their annual contributions to beleaguered pension funds, change the terms of public employee pensions to help lower the burden on state and local budgets, or do a little of both.
“Reform advocates contend that public employees are enjoying lavish retirement benefits that are handcuffing states and bankrupting cities. They argue that states and municipalities should cut pensions for current and future employees. In some cases, that means shifting workers from employee-friendly defined-benefit plans to plans that more closely resemble private-sector 401(k) plans [Rauner's plan for public employees].
“Public workers and their unions, too, have cried foul, arguing that their retirement benefits are far from extravagant and that attempts to change the terms of their pensions violate agreements they previously reached with state and local governments.
“David Sirota, a liberal writer and commentator, wrote an [outstanding] 2013 report [that should be read] called ‘The Plot against Pensions,’ which argued that ‘conservative activists are manufacturing the perception of a public pension crisis in order to slash modest retiree benefits and preserve expensive corporate subsidies and tax breaks.’
“…‘We are having a debate over pension shortfalls, calling them an emergency, when in fact they are in aggregate far smaller than what is spent each year on subsidies to business,’ Sirota told the Center for Public Integrity. ‘And business likes that imbalance.’
“With so much at stake for businesses, some worry what kind of influence a corporate-funded conference might have on judges whose rulings could resolve the pension debate.
“…Sirota, for one, said the conference hosted by George Mason’s Law & Economics Center is ‘an effort to lobby judges.’
“‘It’s crossing a line that’s not supposed to be crossed,’ he said. ‘What’s next? Is a company going to be able to hire a lobbyist to go lobby a judge in chambers?’ Probably not. But what’s next for judges certainly includes another conference on public pension reform sponsored by George Mason’s Law & Economics Center. It’s scheduled for September in San Francisco.”
For the complete article by Chris Young at the Huffington Post, Click Here.