Selections
from the recent Oral Arguments:
“…During oral arguments on the city’s
appeal, several Illinois Supreme Court justices made it clear through their
questioning that they do not buy the city’s central arguments: that Chicago
reforms painstakingly negotiated are different than state reforms imposed ‘arbitrarily’
and that the city’s commitment to ‘preserve and protect’ the two funds amounted
to a ‘massive net benefit.’
“‘This court has often recognized that
the framers [of the Illinois Constitution] were very clear that this pension
protection clause would not control funding. Rather, the purpose of the clause
was to ensure public employees receive their promised benefits,’ said Supreme
Court Justice Mary Jane Theis.
“‘You point us to the statute that was
adopted before the Constitution and you argue that, in fact, there has never
been an obligation to pay for those benefits. How do you reconcile those very
different ideas?’
“Corporation Counsel Stephen Patton
countered, ‘I didn’t say there was not an obligation to pay for the benefits.
The question is, who’s on the hook to pay for those benefits?… Under the
pension contract here, that obligation to pay was limited to the funds. What
this act does is it not only specifies the who, but the what. And for the first
time, it creates a back-stop that, yes, the city is responsible for paying
those benefits — not just the fund. And it is responsible for doing so through
an actuarial funding obligation.’
“Theis pressed on: ‘You’re saying that
the constitutional guarantee that promised benefits will be paid is limited by
whatever amount there is in the pension fund and, if the pension fund runs out
of money, that guarantee no longer applies?’ she asked the corporation counsel.
“Patton replied, ‘No. Not necessarily.
It depends on the particular pension contract. This court has held time and
time again that the pension clause doesn’t create the terms of the pension
contract. That’s for the General Assembly to do.’
“The deal that Emanuel painstakingly
negotiated with scores of union leaders raised employee contributions by 29
percent — from 8.5 percent currently to 11 percent by 2019 — and ended
compounded cost-of-living adjustments for retirees ineligible for Social
Security that have been a driving force behind the city’s pension crisis. The
city started collecting the higher payments on Jan. 1.
“On Tuesday, Patton noted that
Chicago’s annual contribution to the two funds facing insolvency in 10 and 13
years respectively will quadruple over five years. ‘It’s why 27 of 31 unions
that we negotiated with for two-and-a-half years stepped up with us to try to
solve this problem. These folks are better off. They will have a pension fund.
In just the first few years, our contributions are going to increase from $177
million in 2014 to more than $650 million and keep going up from there. This is
a huge financial obligation,’ he said.
“‘All of that money is going to be
pouring into these funds earning a return to ensure that, when these folks
retire, it won’t just have an empty promise. They will have a fund with
billions of dollars in it that will pay their benefits.’
“Justice Bob Thomas was not impressed.
He asked Patton what the ‘overwhelming benefit’ was to retirees and how it compared
to, ‘what would seem to be an overwhelming benefit in the Constitution that
says the pension funds can’t be diminished or impaired.’
“‘You talk quite a bit about the
agreement between the city and the unions. But, you would agree we’re dealing
with a statute — not a collective bargaining agreement, right?’ Thomas said. ‘Any
agreement between the city and the unions is simply part of the history of how
the statute came to be.’ Thomas added, ‘From our standpoint, if the statute is
clear and unambiguous on its face and if we believe … how the pension benefits
were diminished, why would this court even consider the act’s history?’ As for
the insolvency threat, Thomas said: ‘Let’s follow through with your 10-to-13
years. So, there’s no money in there. Are the pensioners any less entitled to
what they were promised?’
“John Shapiro, an attorney representing
retired city workers, poked giant holes in the city’s argument that the deal
that forced retirees to pay more and get less amounted to a ‘net benefit.’ ‘The
question is whether pension diminishments coupled with new funding can shield
those diminishments from the pension protection clause. And the answer clearly
is no. Setting aside money to pay what is already a constitutional guarantee is
not a benefit new or net. Funding provisions cannot justify pension benefit
reductions in Illinois,’ Shapiro said.
“‘The funding mechanism for employer
contributions simply has not matched known fund obligations. Now that the
result of that disconnect is intolerable, they just don’t want to pay for the
benefits. But, that’s precisely what the pension protection clause precludes.
This act is little more than an attempt to end-run the court’s recent
confirmation that the police power cannot be used to justify pension
diminishment.’
“Plaintiffs’ attorney Clint Krislov
agreed that the ‘net benefit theory’ was a ‘re-jiggering’ of the police powers
theory shot down in the state case. The argument is now, ‘We haven’t funded
these. We have allowed them to get to the point of maybe insolvency over the
next ten years and, because of what we’ve done, the sky is falling,’ Krislov
said. ‘We’ve created a situation where the guaranteed benefits might not be
paid. So here’s what we’re going to do. We’re going to now say: Here’s how
we’re going to fund it, but you have to reduce your benefits…’”
From Justices' questions signalbad news for Emanuel's pension fund deal
A Commentary written on July 13, 2014:
We cannot mistake the
meaning of words such as “shall be an enforceable contractual relationship, the
benefits of which shall not be diminished or impaired” because we understand
and speak the English language. If words in our State Constitution are to refer
or mean anything, they must be commonly understood and accepted as they have
been for decades. Moreover, if words are to refer to
anything, they must also be understood through their use, role, employment and
past agreements.
We have before us “the validity of decades of judicial
precedents” that provide “the binding nature of legislation establishing
pension commitments to government employees”
(Defending and Protecting Public Employees’ Pensions
against the Legislative Siege).
If there is anything else
we might examine regarding the “Pension Clause” and its relationship to a
reality that reveals repeated attempts by the wealthy elite, their politicians
and the media to steal constitutionally-guaranteed pension benefit rights,
perhaps we should also dispute the relentless attacks on
the very intelligibility of the English language by these liars and thieves. We know the “Pension
Clause” is valid because it is understood to be a contractual right and
guarantee that public employees have earned.
Though incompetent,
corrupt politicians and their wealthy benefactors continue to ignore legal and
moral terminologies and court precedents, logical and ethical people understand
the essential history and necessity of the “Pension Clause” and know what it
also means to uphold the State and U.S. Constitutions.
Glen Brown
Glen Brown
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