Wednesday, January 27, 2016

Re: Pensions (from Illinois Governor Rauner’s 2016 State of Address on January 27th)







“…One of the most critical actions we can take to save taxpayers’ billions of dollars, while offering state workers a fair deal that protects their retirement, is to enact Constitutional pension reform. Nearly everyone in this Chamber today understands the need for it. We have the worst unfunded pension liability in the nation and because of that nearly one in four dollars we spend in the state budget goes towards making pension payments. Over the last 10 years, we’ve gone from contributing $1.4 billion per year to a scheduled $7.6 billion payment this year. 

“Over the summer, our administration developed a pension plan that would provide more than $2 billion in relief to cities, counties, universities and school districts, in addition to the state.  And while it remains my hope that the General Assembly is interested in providing more comprehensive help to every community, we cannot wait any longer to help the state. 

“So as a first step toward bipartisan compromise, President Cullerton and I have agreed to support his pension proposal that will save $1 billion/year from four of the state pension plans. I have instructed Administration attorneys to work with the Senate President’s staff to finalize language as soon as possible. When they do, I urge both chambers to pass it without delay…” (Rauner). 

Commentary (redux):

“On its face, the Pension Protection Clause is absolute and contains no exceptions: ‘Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.’ See Ill. Constitution, Art. XIII, § 5. 

“The Pension Protection Clause does two distinct things. First, it deems membership in State and certain other public pension systems to be a contractual relationship with the employee that is ‘enforceable’ by the courts. Id. Second, it restricts legislative power to modify the benefits of that contractual relationship by mandating that such benefits ‘shall not be diminished or impaired.’ Id. That second provision has independent significance and must be given effect (from Brief of ISEA RSEA Heaton and Harrison Plaintiffs-Appellees, Opening Argument against State’s Sovereign Powers). 

“When the drafters of the Illinois Constitution adopted a stand-alone clause specifically protecting public pensions…, they wanted to ensure that public workers would receive promised pension benefits, regardless of fiscal circumstances. To that end, the drafters included within the Pension Protection Clause a provision prohibiting the legislature from diminishing pension benefits…

“[Rauner’s plan] would diminish public pension benefits in disregard of that constitutional limitation on legislative power. [Rauner] seeks to justify [his plan] on the ground that it will save the State [1 billion dollars a year]. According to [Rauner’s plan], those billions of dollars will come from the pockets of [public sector employees and retirees].

“That particular method of managing the State's finances is expressly prohibited by our State's Constitution. This appeal thus raises an issue of fundamental importance: the primacy of the Illinois Constitution over considerations of political expediency… 

“The Pension Protection Clause was specifically designed to prohibit the diminishment of pension benefits based on precisely the claim of fiscal necessity that [Rauner/Cullerton] now advance. 

“The drafters of the Constitution knew that the State had historically failed to adequately fund its pension systems, and they were concerned that fiscal exigencies would be used as a justification for reducing pension benefits unless those benefits received constitutional protection. 

“The delegates who supported the Clause recalled that ‘civil service employees who retired never had their pension altered or amended, even during those trying times during the days of the Depression,’ and explained that the Clause was intended to protect pensioners ‘irrespective of the financial condition of a municipality or even the state government.’ Record of Proceedings, Sixth Illinois Constitutional Convention, Verbatim Transcripts (July 21, 1970) ("Record of Proceedings"), at 2926 (SA 7) (remarks of Delegate Kemp). 

“[The Courts have] repeatedly recognized that the Pension Protection Clause means what it says, [most recently in the Illinois Supreme Court ruling on May 8, 2015]... 

“The language of the Pension Protection Clause is ‘plain’ and may not be rewritten ‘to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.’ Id., ¶ 41. 

“In light of the Clause's plain meaning and intended purpose, ‘[the courts have] consistently invalidated amendments to the Pension Code where the result is to diminish benefits.’ McNamee v. State, 173 III. 2d 433, 445 (1996)… 

“[T]he Clause is a valid limitation on the General Assembly's authority. Like other constitutional limits on legislative power, it cannot be overcome by [Rauner’s] claim of fiscal necessity. 

“In the final analysis…, the Illinois Supreme Court upheld the promise of the Pension Protection Clause and, with it, the supremacy of the Illinois Constitution over [any future] legislation, however... politically expedient, that exceeds the constitutional bounds of legislative power…” (Illinois Pension Litigation Brief, February 20,2015).


Instead of protecting public pension rights and benefits, which have a legal basis under Illinois State Law; instead of restructuring the state’s revenue base to pay for the state’s growth in expenditures and its recklessly-accumulated debts and obligations, current policymakers like Rauner  and Cullerton still choose to diminish the public employees’ constitutional rights and their benefits, even though revenue restructuring and pension debt re-amortization are the legal and moral solutions. 

No doubt, ethics and laws do not matter to liars and thieves in Illinois government. It is important to recognize that continuous, insidious attacks on public employees’ pensions are also aligned with the undemocratic, corporate dismantling and closing of public schools for privatization through unaccountable, biased charter and bogus simulated schools. These assaults are concomitant with the dictatorial Race to the Top and unreliable value-added modeling for rating schools and teachers’ effectiveness and students’ learning, and with counter-productive merit-based pay knotted to standardized test scores. These onslaughts are also related to the oppressive stripping of collective bargaining and due process rights, the despotic destruction of public employees’ unions, the propagandized demonization of teachers, and the disparate distribution of wealth.

—Glen Brown



1 comment:


  1. It is time my fellow public employees on February 15 we will have a mass demonstration with picket signs at Fullerton and Rauner's offices and we will continue to demonstrate every day until this pension is resolved and payments are made on time . Got picket signs will read not honoring the Illinois Constitution, cheating the public employees , Breaking the law, ect ect

    ReplyDelete