Wednesday, July 9, 2014

“The Kanerva decision is a big boost for the fight against pension reform. But there remains a long fight ahead” by Executive Director Linda Brookhart, State Universities Annuitants Association

“…As you by now know, the State of Illinois is in a financial crisis and has responded by declaring war on public pensions.  This has included several legislative actions.  In 2012, Governor Quinn signed SB 1313 into law.  That measure started requiring SURS annuitants, among others, to start paying a portion of their health insurance premiums, something that the State had long since promised as part of their pensions.  In 2013, he signed SB1 into law which went directly at the heart of pensions by attacking the automatic annuity increases, retirement age, annuity formulas, the effective rate of interest and other things.

“The Kanerva case was filed to challenge the constitutionality of SB 1313, asserting that it violated Pension Protection Clause of the Illinois Constitution.  The case was immediately dismissed by the Sangamon County Court which found that the health care benefits were not part of pensions.  That ruling all but eliminated any hope of protecting health benefits of retirees.

“Meanwhile, SUAA and others filed similar actions challenging the constitutionality of SB1.  Those cases were not dismissed, but the State has argued both that some of the items challenged (such as the changes to the automatic annuity increases) do not constitute ‘pension’ benefits at all, and that it can violate the Pension Protection Clause for the greater good of the citizens of Illinois — the so called ‘police powers’ argument. 

“SUAA and the other Plaintiffs in those actions filed an immediate motion for judgment on the basis of the pension clause asserting that the police powers cannot be used to void the constitutional protections of the Pension Protection Clause.  The Sangamon County Court put that motion aside to permit the State to bring forth its evidence supporting its exercise of the police powers.  That constituted a significant stall in the fight against pension reform.

“On July 3, 2014, the Supreme Court of Illinois reversed the trial court in the Kanerva case.  In so doing, it breathed new life into a losing fight.  Some have even gone so far as to claim that the war is over.  That, unfortunately, is far from true.  The Kanerva opinion is limited to a determination that health coverage is a pension benefit.  It does not address the police powers defense at all.  And obviously it does not address it in the context of the pension case.

“Still, the Kanerva opinion provides some language which is very useful.  First, it provides that the term ‘pension benefit’ is expansive, covering all benefits that are ‘conditioned on membership in one of the State’s various public pension systems.’  That bodes very well for the Plaintiffs in defeating any argument the State may make that the automatic annuity increases are not ‘pension benefits.’  Indeed, even the dissent notes that Kanerva would be a different case if the health benefits were in the same code section as the pension benefits.  In this case, all of the benefits at issue are in the pension code itself.

“In the short run, the Kanerva decision is a big boost for the fight against pension reform.  But there remains a long fight ahead.  It may well be a turning point but it is not the end of the war. This is not the time for public employees to sit on their laurels, but rather a time to take advantage of the momentum and buckle down for the fight.”

Linda L. Brookhart
Executive Director
State Universities Annuitants Association


  1. Teachers and Retirees: what are you doing this summer?

    How about openly resisting the way in which the state's politicians (without moral conscience) have now chosen to “regulate public morals and welfare”? How about protesting against the liars and thieves who have manufactured a financial crisis and who have perpetuated a financial predicament through irresponsibility, mismanagement and corruption? How about protesting against the liars and thieves who have ignored moral responsibility and refused lawful remedy for the financial problems they have created? They have stolen part of the pension you have earned. They will continue to steal more of your pension in the future. You might begin by calling or visiting your legislators this summer and then call or visit your union leadership...

    from The Contract Clause and the State of Illinois’ “reserved sovereign powers” in Senate Bill 1 (June 12, 2014)

  2. Glen - I was pleasantly surprised to find that the Supreme Court using this case to telegraph its opinion on the current pension reform. However, the imbeciles at the editorial pages of both the Chicago Sun-Times and Tribune both confirmed my predictions as to what the response to an eventual decision in our favor would be and will be: get rid of the pension protection clause, restoring my lack of faith in humanity indeed. Of course, they also realize that won't help the accumulated debt much either, will it? Ultimately, if the final court case goes in our direction, the problem will absolutely remain precisely the same: Where do we get $100 billion dollars? No one wants to pay $100 billion dollar in taxes - whether is through a progressive, regressive or any kind of tax system. I am imagine if all 11 million citizens push for a bail out of some type from the Feds, we might see such an impossibility happen quickly.

    After all, the Federal Reserve has een buying $85-100 BILLION dollars in T-bills for years now in quantitative easing. Maybe we can get a bit of easing ourselves.

  3. "Florida politicians play the cruel game of taking public education money from education funds for disabled children and handing it to highly profitable private schools as vouchers. Those institutions are not required to have any staff members certified or qualified to teach children with disabilities. There is no accountability required for these institution to show that any help is actually being given to help disabled children."
    This greed driven process disguised as corporate education reform extends to disabled children and is nationwide. Schools and programs are "underfunded" and certified special education teachers are fired.
    In Florida the money is being "saved" by extending vouchers, grants, scholarships and other terms rendered meaningless because they are used and redefined by corrupt politicos. The company that redistributes the funds from schools whose disability programs are ended and from special needs schools that have been closed to public-private schools and programs. Orlando and the entire Opt-Out Orlando parents' organization recently had "Ethan's Law" twisted, distorted and passed as yet another redistribution of funds to "connected" schools and political cronies who suck the money out and deliver next to nothing for disabled children and their parents.
    Today, they (we) are working to re-write effective letters to opt-out their disabled children and running pro-rights-for-disabled-children candidates for school board and Orange County Commissioners. That group is working tirelessly to prepare for the beginning of the school year and the November elections.
    Needless to say, both political parties are undermining these efforts.
    (Yes, pensions for public employees are being targeted yet again in Florida by right-wing extremist and Tea Party darling Gov. Rick Scott. After all, Florida cannot afford blah-blah-blah.)