Illinois lawmakers moved closer this weekend to passing pension reform legislation that would require higher worker contributions to their retirements, would restrain annual COLA increases and raise retirement ages for current workers. Government worker unions in the state are trying to derail the legislation by arguing it is unconstitutional and threatening to take any reform legislation of this sort to court. That approach has worked in the past, but increasingly experts in
Illinois question whether the constitutional protection, which unions
argue prohibits any changes to pensions for current workers, is as
comprehensive as unions claim.
The legal protection for pensions hangs on a single sentence in the Illinois constitution, which describes membership in a state pension system as "an enforceable contractual
relationship, the benefits of which shall not be diminished or impaired."
Critics say it is time to challenge the idea that this clause protects workers from any change in their pension benefits once they start working for the state. Unions argue the clause not only protects current benefits but gives workers the right to continue earning benefits at the same rate for as long as they work for the state.
Last year the Civic Committee of Chicago, a good government group, commissioned the noted law firm of Sidley, Austin to offer an opinion on the meaning of the constitutional clause. The firm determined that the phrase 'contractual relationship' means that the state can't take away pension benefits already earned by workers, but that it can require changes in the system going forward, like raising the retirement age or asking for more contributions from workers.
Some legislators and legal observers, confronting the state's huge pension debt, which might simply not be fixable if Illinois can only change the pension system for new workers, are urging legislators to pass the new law and take the fight to court.
Earlier in the year a court had voided pension reform legislation in the state which required judges to contribute more to their retirements. The court argued that a section of the state's constitution prohibiting the legislature from cutting judges salaries made the pension legislation unconstitutional. So the Jersey legislature asked voters to amend the constitution to remove the stipulation from the constitution. Voters complied in November, allowing the state to pass new pension reform legislation that includes judges.
Either way, there's a big fight brewing in Illinois, where the pension numbers are so ugly that some kind of change is inevitable. It's just a question of who pays for it all.
Critics say it is time to challenge the idea that this clause protects workers from any change in their pension benefits once they start working for the state. Unions argue the clause not only protects current benefits but gives workers the right to continue earning benefits at the same rate for as long as they work for the state.
Last year the Civic Committee of Chicago, a good government group, commissioned the noted law firm of Sidley, Austin to offer an opinion on the meaning of the constitutional clause. The firm determined that the phrase 'contractual relationship' means that the state can't take away pension benefits already earned by workers, but that it can require changes in the system going forward, like raising the retirement age or asking for more contributions from workers.
Some legislators and legal observers, confronting the state's huge pension debt, which might simply not be fixable if Illinois can only change the pension system for new workers, are urging legislators to pass the new law and take the fight to court.
"At some point, we're going to have to find out where the line really is drawn, and the court is probably the one that is going to have to do that," Dawn Clark Netsch, an emeritus law professor at Northwestern University, told the state's press last year.Illinois does have another option. The state could change its constitution, eliminating the troublesome clause. Although that sounds far-fetched, it's already been done once in the last year, in New Jersey.
Earlier in the year a court had voided pension reform legislation in the state which required judges to contribute more to their retirements. The court argued that a section of the state's constitution prohibiting the legislature from cutting judges salaries made the pension legislation unconstitutional. So the Jersey legislature asked voters to amend the constitution to remove the stipulation from the constitution. Voters complied in November, allowing the state to pass new pension reform legislation that includes judges.
Either way, there's a big fight brewing in Illinois, where the pension numbers are so ugly that some kind of change is inevitable. It's just a question of who pays for it all.
ILLINOIS PENSION DEBT--ILLINOIS POLICY INSTITUTE
Quoting ..."It's just a question of who pays for it all."
It is VERY unlikely that the HUGE sums needed to fully fund the promised pensions will be forthcoming, so the the above quote must include "payment" from the workers in the form of SIGNIFICANTLY reduced pensions (likely by 50%), and clearly, a few % increase in contributions from those still working won't cut it.
The workers better start getting used to that idea.
Democratic Hustler Politicians + Corrupt Greedy Unions = BANKRUPTCY BABY!