Monday, September 29, 2014

Excerpts from the Illinois Public Employee Relations Report: Illinois Public Pension Reform... by Eric M. Madiar, Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate



The following quotations are from the report:


Madiar chronicles the “history of public pension funding in Illinois to give proper context to the Illinois Constitution's Pension Clause, the General Assembly's recent legislation, and the pending legal challenges to that legislation...”



Madiar also recounts the “aggressive lobbying efforts by Illinois’ business community, principally the Commercial Club of Chicago (the ‘Club’) to cut the benefits of current and retired employees…; public employees and retirees’… different perspective and view [of] Public Act 98-0599 [Senate Bill 1]…; Illinois’ long history of underfunding public pensions…; [that] chronic underfunding continued after the Pension Clause’s adoption in 1970…; [that] pension underfunding was further aggravated during Governor Thompson’s tenure…; the 1995 Funding Plan by design increased unfunded pension liabilities…; [and] the lack of proper pension funding stemmed from a flawed fiscal system…

“[T]he Plaintiff’s claim that Public Act 98-0599 violates three provisions of the Illinois Constitution: the Pension Clause, the Contract Clause, and the Takings Clause… The Pension Clause claim is the main argument against Public Act 98-0599 with the Contract and Takings Clause claims pled as alternative legal theories as to why the legislation’s benefit changes improperly interfere with plaintiffs’ contract or property rights…

“[T]he ‘We Are One’ and SUAA plaintiffs also assert a Taking Clause claim that the State’s failure to properly fund the State’s pension systems has resulted in a taking of private property… [T]wo State employee groups assert that the legislation violates the Illinois Constitution’s Equal Protection Clause by not applying the benefit reductions to current and retired judges…

“[T]he notion that the Pension Clause is subject to a police powers exception has already been rejected by Illinois courts on two occasions… [T]he State’s police power is not superior to the Pension Clause; rather it yields to the Clause, just as it yields to other specific constitutional prohibitions and positive mandates.

“Also, the Pension Clause cannot be equated with the Bill of Rights to the U.S. Constitution as inherently containing or being subject to exceptions based on notions of necessity… The Pension Clause, in contrast, does not have such a history or intent to accommodate exceptions based on claims of necessity…

“[T]he likelihood of a police power defense succeeding to vindicate Public Act 98-0599 should be at best an extremely remote outcome, especially because of the Clause’s plain language, drafting history, and purpose, and because of Illinois’ long-standing and conscious failure to fund the pension systems…

“‘Let it not be said, however great disasters may befall us, however much we may be impoverished, how heavy the burden imposed upon us may be, we will, for relief, destroy the constitution, or disregard its requirements. Our safety, in the midst of perils, is in a strict observance of the constitution—this is the bulwark to shield us from aggressions. Trifling with it, treating it lightly, dispensing with this or that provision of it, is the sure precursor of the direst calamity which can befall the people, the end of which cannot fail to be, anarchy and ruin’ (1861 Illinois Laws at 208)…’”

To read the complete 43-page report, Click Here.



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