Brian's Column 11-26-2014

Last Friday, Judge John Belz of Sangamon County Circuit Court ruled that Illinois Pension Reform Bill, SB 1, was unconstitutional.  Both my predecessor, former State Representative Jim Sacia, and myself voted against the bill—Jim voted against it in May of 2013, and I voted against it when it came up in veto session the following December.

Judge Belz ruled the law unconstitutional based on The Pension Protection Clause in the Illinois Constitution which states that “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.” In his ruling, Judge Belz writes that the bill diminishes and impairs the pensions by reducing the compounded automatic annual increase amounts that some pension members receive, by reducing annuity payments, and by raising the retirement age.  Judge Belz goes on to say that “the Act without question diminishes and impairs the benefits of membership in State retirement systems” and that “protection against the diminishment or impairment of pension benefits is absolute and without exception.”  While the defendants argue that the State has the right to exercise police power in a fiscal crisis, Judge Belz writes that “the Pension Protection Clause contains no exception, restriction or limitation for an exercise of the State’s police powers or reserved sovereign powers.”  He concludes by saying that “the State of Illinois made a constitutionally protected promise to its employees concerning their pension benefits.  Under established and uncontroverted Illinois law, the State of Illinois cannot break this promise.”

While I couldn’t put those statements in as eloquent legalese as Judge Belz does, those statements sum up my thoughts on the pension bill pretty well.  The state made a promise, and it doesn’t matter how good or bad you think that promise is, it’s a promise, and the state owes it to its hard working employees to keep its promises.  This isn’t a new issue, either—according to Eric Madiar the Chief Legal Counsel to Senate President John Cullerton, it’s been going on since 1917.  Madiar says that “in 1917, the Illinois Pension Laws Commission warned State leaders in a report that the retirement systems were nearing ‘insolvency’ and ‘moving toward crisis’ because of the state’s failure to properly fund the systems.”  Illinois has had almost a century to fix the problem.  The State has known about it since 1917, and little has been done to remedy the snowballing debt.  It has consistently neglected to fund pensions that it promised to its employees.

So where does the court’s ruling leave us?  First, the bill will need to be tried in the Illinois Supreme Court, and hopefully that will happen sooner rather later.  If the Supreme Court upholds Judge Belz’s ruling, expect a credit downgrade for the state.  The court ruling is in favor of employees, but it still leaves the State in a fiscal mess of its own making.

All is not gloom and doom, however.  The pension system needs to be fixed, and soon, but I fully believe that the new governor-elect and the leaders from both the Illinois House and Senate can work together to create a bill that remedies the State’s pension debt and still fulfills promises to State employees.  Such a bill will mean all hidden agendas are left out of the mix and both legislators and the governor work together for the good of the people, not for the good of their own desires.  I could see a pension reform bill that revamped pension plans for new hires, possibly even offering a 401K type plan.  Current employee plans would remain the same, or they could be given the option of choosing to switch to the new plan if they thought it would be beneficial.  Retiree plans would remain unchanged.

“[The Constitution] is an instrument for the people to restrain the government—lest it come to dominate our lives and interests,” Patrick Henry once said, referring, of course, to the United States Constitution, but the sentiment can be applied to the Illinois Constitution.  It is an instrument for we the people of Illinois to restrain the government and hold them to their promises.

As always, you can reach me or Sally at 815/232-0774 or email us at repstewart@gmail.com. You can also visit my website at www.repbrianstewart.com or follow me on Facebook, Twitter, and Google Plus.

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