Senator Daniel Biss
9th District – Illinois
[“By far and away, the main reason the state’s contributions to its pension systems are increasing so much annually is the unrealistic, heavily back-loaded schedule the legislature set back in 1995 for repaying the debt the state owes to its pension systems. Of the $6.19 billion General Fund contribution to the five pension systems for FY2014, about $1.02 billion is attributable to the normal cost of the benefits being earned by current workers, while $5.17 billion constitutes debt repayment” (Analysis of FY2014 Illinois General Fund Budget from the Center for Tax and Budget Accountability). Furthermore, impairing a constitutional contract does not “strengthen and preserve it for those who rely on it the most”; breaking a contract with public employees will not address the revenue and debt problems in Illinois]…
[“Leaving the judges out of pension reform: ‘I would call this buying off the judges…’” (Ann Lousin, a professor at the John Marshall Law School in Chicago who helped draft the Illinois Constitution in 1970)]…
Very few of us were prepared to do something like this to teachers, state workers, and university employees unless we were prepared to do it to ourselves as well.
[Approximately 80 percent of public employees have only one pension. How many pensions will the average Illinois legislator have?].
As an example, in 2010, Illinois created a new “Tier 2” of benefits for employees hired after January 1, 2011. It’s a relatively stingy plan. This bill didn’t change anything for those workers at all. The only exception is that the bill did have a cut for Tier 2 legislators. I just couldn’t look myself in the mirror and sponsor a bill that left me off the hook.
[Regarding Tier 2: Illinois legislators have failed to address the flaws in the newly-hired public employees’ pension plan. The “Tier 2” benefit structure for employees faces problems because the benefit is worth less than employees are paying for it. Tier 2 is a looming issue that must be resolved, but SB 1 will possibly create the same problem for the Teachers’ Retirement System (TRS) and, likely, the State Universities Retirement System (SURS)].
[“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…” (Eric M. Madiar, Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate)].
[“The significance of any modification of the “Pension Clause” is “the extent to which [retirees] will be deprived of the benefit [they] reasonably expected; the extent to which [retirees] can be adequately compensated for the part of that benefit [COLA] of which [they] will be deprived; […and] the extent to which the behavior of the party [Illinois General Assembly] failing to perform or to offer to perform [or] comports with standards of good faith and fair dealing… The promise to honor commitments and pay for the public employees’ pension is of ‘sufficient importance’ to all citizens of Illinois. To pass pension reform is ‘an unequivocal manifestation of intention not to perform… legal duties…under a contract… When there is a duty of immediate performance of a promise, failure to perform in full is a breach’” (Professor of Law, Emeritus, Claude D. Rohwer and Professor of Law, Emeritus, Anthony M. Skrocki, Contracts in a Nutshell)].
[No consideration was given to public employees in Senate Bill 1: reducing the contribution rate for current teachers by one percent was not a consideration. It was not negotiated; furthermore, modification of contract principles for retirees was also without consent. “It is well settled that a contract, once made, must be performed according to its terms, and that any modification of those terms must be made by mutual assent and for consideration” (Ross v. May Co., 377 Ill. App. 3d 387, 389 (2007)].
For the entire class, there is a significant new right in the form of additional funding. The Supreme Court has said the Constitution has protected the right to a benefit, but we’re also creating a new right to fund the benefit properly and therefore guarantee its fiscal health and stability. We’re not only going to an actuarially funding schedule, we’re going above and beyond that. All of this is money going to the retirement system and therefore to the employees.
[Illinois legislators who challenge constitutional contracts can never be trusted. As a matter of fact, according to Representative Elaine Nekritz: “The so-called pension payment guarantee has wiggle room. If the state fails to make a pension payment, a retirement system could file action in the Illinois Supreme Court to compel the state to make the required payment. But if the state faces a crisis, it could simply vote to change what the required payment would be; [thus], effectively working around that guarantee”].
[“… [T]here are those among us who want to abandon] the fundamental principle that the rules of the game for contracting parties are not to be changed midstream… This is especially hard to comprehend when public employees have diligently and faithfully paid their contributions while their government employers have failed to pay their required share. Indeed, for decades, states have treated pension systems as a credit card to pay for government services and avoid tax increases or service cuts (p. 194)... For lawmakers, it is simply politically more palatable to unilaterally cut pension benefits for public employees and retirees than to raise taxes, cut services, or both…” (Eric M. Madiar (2012). Public Pension Benefits under Siege: Does State Law Facilitate or Block Recent Efforts to Cut the Pension Benefits of Public Servants? ABA Journal of Labor & Employment Law, V. 27, no. 2, 179-194. Retrieved December 7, 2012 (Defending and Protecting Public Employees’ Pensions against the Legislative Siege)].
[“…One thing we cannot do [Daniel Biss]… is ignore the Constitution of Illinois… No principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem…” (from Ann B. Jorgensen et al., Appellees, v. Rod R. Blagojevich, Governor, et al., Appellants).]
“[The Pension Protection Clause was approved by the Constitutional Convention and ratified by the people of Illinois. Over the years, the Illinois Supreme Court has had several occasions to interpret the Pension Protection Clause. The Illinois Supreme Court’s decisions have been consistent: ‘[T]his court has consistently invalidated amendments to the Pension Code where the result is to diminish benefits.’ McNamee v. State, 173 Ill. 2d 433, 445 (1996). That is because, under the Pension Protection Clause, the ‘contractual relationship’ between a retirement system member and the State of Illinois is ‘governed by the actual terms of the Pension Code at the time the employee becomes a member of the pension system.’ McNamee, 173 Ill. 2d at 439.
“[In a strikingly similar context, the Illinois Supreme Court also has warned: ‘No principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem.’” (Jorgensen v. Blagojevich, 211 Ill. 2d 286, 316 (2004) (from the 12-page legal document recently filed by the law firm of Tabet, DiVito & Rothstein on behalf of the plaintiffs named from the IRTA and IASA)].
[Your oath of office, Senator Biss: “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)].