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The right of Illinois teachers to our pensions is as old as our system of laws!... Rockford Rep. tries to destroy Illinois teacher pensions with attempt to amend the Illinois Constitution

As those who have been following the pension fights in the Illinois General Assembly know, the attacks on public worker pensions have been escalating, behind a smokescreen of news and analysis that claims Illinois will be bankrupt unless so-called "pension reform" effectively abandons the state's legal commitment to the pensions of teachers and other public workers. As part of that attack on public worker pensions, Joe Sosnowski, the Republican State Rep from Rockford, has introduced legislation attempting to take out the part of the Illinois Constitution which guarantees public worker pensions. Below is one response to that attack.

Regarding Joe Sosnowski's proposal to abolish Article XIII, Section 5 (The Pension Clause) of the Illinois Constitution

HJRCA0011... Joe Sosnowski. Proposes to amend the General Provisions Article of the Illinois Constitution. Repeals a provision that specifies 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. Effective upon being declared adopted.

To Mr. Sosnowski:

By legal definition, a contract is "an agreement creating obligations enforceable by law." The law provides remedies if a promise is breached or recognizes the performance of a promise as a duty. Contracts arise when a duty does or may come into existence because of a promise made by one of the parties. To be legally binding as a contract, a promise must be exchanged for adequate consideration. Adequate consideration is a benefit or detriment that a party receives which reasonably and fairly induces them to make the promise/contract. (Legal Information Institute at Cornell University Law School). Accordingly, the State of Illinois has a long list of antedated court rulings upholding the rights and benefits (contracts) of its public employees.

The Pension Clause [Article XIII, Section 5 of the Illinois Constitution] not only makes a public employee's participation in a pension system an enforceable contractual relationship, but also constitutionally protects the pension benefit rights contained in the Illinois Pension Code when an employee joins a pension system, including employee contribution rates.

The Clause also safeguards pension benefit enhancements that are later added during employment. Further, the Clause ensures that pensions will be paid even if a pension system defaults or is on the verge of default... While the Clause bars the General Assembly from adversely changing the benefit rights of current employees via unilateral action, these rights are contractual in nature and may be modified through contractual principles...

Welching on public pension promises is not an option for Illinois as some legal and civic commentators have suggested, legitimate contract principles provide a solution to mitigate this crisis. (Eric M. Madiar is the Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate).

As stated by Alicia H. Munnell, Director of the Center for Retirement Research at Boston College, Illinois is one of seven states where accruals are protected, and the legal basis for protection of public pension rights is under state law (State and Local Pensions). To possess a right to a promised deferred compensation, such as a pension, is to assert a legitimate claim with all Illinois legislators to protect that right. There are no rights without obligations. They are mutually dependent. Fulfilling a contract is a legal and moral obligation justified by trust among elected officials and their constituents.

According to philosopher David Hume, the idea of keeping a promise depends upon creating rules of justice; that rules of contracts, for instance, have to be considered morally desirable as well. In other words, a "contract" or promise between the State of Illinois and its public employees must be viewed as a moral commitment and requirement of justice. Justice demands we keep our "covenants" with one another. In regard to public pensions, keeping an agreement means a concern to promote the well-being of public employees and the need to secure their rights. All citizens have rights that must be protected. When legislators swear an oath to uphold the state and federal constitutions, then citizens of Illinois and the United States have also acquired the right to expect that they will uphold that pledge. This is also a matter of important moral concern for all citizens of a state, for all legal claims will be validated by a moral framework since the concept of justice is grounded in ethics. If citizens' legal rights are abused, then their dignity and humanity will also be violated.

Like all other citizens, public employees' legal rights are derived from past political constitutions, legislative enactments, and case law. All citizens of Illinois have a fundamental right to oppose a General Assembly that imposes a violation of their constitutional rights and earned benefits. Any statute which [is] imposed upon [public employees] in order to redistribute resources and thus benefit some persons at the expense of others [extends] beyond the implicit boundaries of legislative authority. Such laws violate natural rights of property and contract, rights lying at the very core of the private domain (Laurence H. Tribe, American Constitutional Law). Mr. Sosnowski, your resolution is without legal and moral justification.

The significant issue of your resolution and pension reform is its attack on public employees' rights to constitutionally-guaranteed, earned compensation and the legislators' obligation to safeguard those promises. An unconscionable constitutional challenge of those rights and earned benefits generates a serious threat to their secure sense of worth as citizens and creates the unfair possibility for an economic disadvantage for a particular group of people and their families. This can never be legally or morally justified, especially when legislators have stolen money that was supposed to be paid into the public pension plans for decades.

Public employees are promised certain retirement compensation. It is earned; it is not a gratuity. They expect and plan their lives based upon these promises. "The very idea that [the state can] hold [public employees' lives], or the means of [their] living, or any material right essential to the enjoyment of life, at the mere will of another has been thought intolerable in any country where freedom prevails" (John Locke, Two Treatises of Government).

State governments must respect vested rights in property and contract (Tribe).

We should be able to assume most legislators in Illinois understand this concept of justice and that lawfulness demands that people keep their "covenants" with one another. Regarding your resolution, no justice is accomplished when subordinating or diminishing public employees' rights and earned benefits because of past legislators' negligence, irresponsibility, and corruption.

All citizens of the State of Illinois have legal justification for their rights. As stated, the foundation of their rights is the State and U.S. Constitutions that directly support any claims against them. State contracts are protected by the federal government. Understandably, the 5th and 14th amendments of the United States Constitution protect due process of law. The legal bases for protection of past-and-future public pension rights are established in both constitutions. It is shameful and reckless that a representative who has sworn an oath to uphold the State and U.S. Constitutions would propose a resolution that ignores and challenges a legal contract. Breaking a contract threatens the integrity of all laws that govern and protect the citizenry, for the values of the United States Constitution (Article I, Section 10) and the Illinois State Constitution (Article I, Section 16 and Article XIII, Section 5) are dependent upon the understanding and integration of all of the articles and amendments in totality; �the strength of the constitution[s] would not be proven by considering each article or amendment in isolation from the others� (Tom Beauchamp, Philosophical Ethics).

As citizens, we are advocates of a unification of the Bill of Rights in the United States Constitution, which protects all of us from any violations of human rights and contracts, as much as we would wish others to be motivated by a way of life that is also governed by a complete moral system of thinking. There are no good reasons for legislators� attack on public employees� rights and earned compensation and their attempt to equate their lives to an exchange rate in dollar amounts. The General Assembly cannot justify pension reform in accordance with fundamental, constitutional principles of reason and morality and neither can you, Mr. Sosnowski, justify your resolution.

What we call rights of individuals is bound up with the theory and precepts of social and political justice we adopt (John Stuart Mill, On Liberty). All citizens of the State of Illinois have legal justification for their rights and earned compensation, for rights and obligations are logically correlative, and a citizen�s rights imply or complement the legislators� obligation to guarantee them. The keeping of promises is the General Assembly�s legal duty. It is something the United States Constitution requires them to do whether they want to or not. Unfortunately, many legislators are willing to act without moral or ethical principles, even though �claims of rights [are] prima facie or presumptively valid-standing claims� (Beauchamp). What is at stake is not a potential adjudication of conflicting claims that public employees will have against policymakers like you who want changes to public employees� earned compensation and rights, but to respect the public employees� contractual and constitutional promises because they are legitimate rights and moral concerns not only for public employees, but for every citizen in Illinois: for any unwarranted acts of cheating a person�s guaranteed rights and earned compensation will violate interests in morality and ethics and the basic principles of both the State and United States Constitutions that protect every one of us. For that reason, it is imperative that policymakers and stakeholders examine their own ethical and moral principles and their conduct in view of the fact that they will have to justify their decisions to the citizens of Illinois.

It can be inferred that if policymakers (like you) do not take individual rights and contracts seriously, but prefer to challenge them in a court of law, then we can assume legislators (like you) will not take any of their other laws seriously either.

--Glen Brown

Please write or call Mr. Sosnowski regarding House Joint Resolution Constitutional Amendment 0011: repsosnowski@gmail.com 1-815-547-3436 (Rockford District Office), 1-217-782-0548 (Springfield)



Comments:

February 10, 2013 at 9:32 AM

By: Rod Estvan

Default the greatest threat

I doubt that the proposal for a Constitutional amendment will go anywhere fast. HJRCA0011 currently is stuck in the House rules committee and I don’t expect it to get out of that committee. As some of you know I am a registered lobbyist that works on education issues for students with disabilities, but the issue of pensions is so pervasive in Springfield that it comes up in relation to every appropriation, even HB 190 supplemental appropriation that just passed and was signed into law last week.

The Sosnowski amendment as of today does not have any co-sponsors and since Joe Sosnowski is a Republican his caucus lacks the constitutional three-fifths vote for this proposal to pass even the House. I also at this time do not believe Speaker Madigan would even consider supporting this proposal because even he could not get enough votes for this proposal to pass.

The greatest threat to Article XIII, Section 5 is likely to be a revisionist interpretation of the section by Illinois Courts in the situation of a default. Each of the separate pension funds have a different projected collapse date, one of the first to go will be the pension fund for members of the Illinois General Assembly itself. If it comes to the point of default that body could determine not to fully honor its own pensions and any former member who is a recipient could litigate to defend their payments. At that point the Courts would have to determine whether or not to issue a direct order to the General Assembly and Governor to fully honor the pensions.

Currently all bills seriously being considered in the Assembly try to play with the language of the Constitution to reduce the overall pension debt. Most unions in the We are One coalition believe these proposals as currently drafted are unconstitutional and have stated they will litigate if the bills pass. I suspect in the abstract the Courts will agree with the unions and strike down the bills if it comes to that and I think Speaker Madigan believes so too. This is why he is pressuring the unions to support a grand pension reform plan. But in the situation of an actual default the entire situation I think becomes more complex.

Rod Estvan

February 10, 2013 at 12:41 PM

By: Glen Brown

IL Public Employees' Pensions

What happens if the Illinois public pension funds are "on the verge of bankruptcy"?

"Contrary to Sidley [Austin's] Claim, the State Must Make Pension Benefit Payments from Its General Fund If a State Pension System Defaults or Is on the Verge of Default. [W]elching by the State is not an option, contrary to Sidley's suggestion. The Clause stands as a constitutional guarantee that pension recipients will receive their pension payments when due even if a pension fund defaults or is on the verge of default. Any state pension participant placed in such a position would have a cause of action in circuit court to enforce this guarantee and obtain payment directly from the State's General Fund. A participant need not pursue payment before the Illinois Court of Claims and depend upon the largesse of the General Assembly.

"Sidley claims that the obligation to pay annuities rests solely with the "State's employee pension funds" and that the "State itself is not a guarantor of that obligation." (530) Sidley asserts that this result stems from Section 22-403 of the Illinois Pension Code, which provides that "[a]ny pension payable under any law hereinafter referred to shall not be construed to be a legal obligation of the State . . . but shall be held to be solely an obligation of such pension fund, unless otherwise specifically provided in the law creating the fund." (531)

"Sidley advances this claim even though the Pension Code Article of each of the State's five retirement systems contains a provision that states in nearly identical terms. (532) The provision states in pertinent part: "Obligations of State. The payment of the required department contributions, all allowances, annuities, benefits granted under this Article, and all expenses of administration of the system are obligations of the State of Illinois to the extent specified in this Article." (533)¦ "The Clause makes the State a Guarantor based on its plain meaning, Convention history, Illinois court decisions, and common law understanding of pension payments as creating a debtor relationship. Sidley's "guarantor" argument ignores the Clause's plain language and common meaning.

"Sidley's position is untenable for several reasons. First¦, the Clause contains prohibitory language that pension benefit rights cannot be ‘diminished’ or ‘impaired.’ (541) Illinois courts have interpreted the word ‘diminish’ under both the 1870 and 1970 Illinois Constitutions as a mandate to pay an obligation when due. (542) As a consequence, Illinois courts will presume that the word ‘diminishment’ as used in the Pension Clause imposes an identical mandate that pension payments be paid when due, especially since the term has a settled legal meaning. (543)

“This conclusion is bolstered by Delegate [Helen] Kinney’s statements at the Convention. Delegate Kinney explained that the term ‘impair’ ‘meant to imply and intend that if a pension fund would be on the verge of default or imminent bankruptcy, a group action could be taken to show that these rights should be preserved.’ (544) She further explained that while the Clause ‘was not intended to require 100 percent funding or 50 percent or 30 percent funding,’ it would trigger funding if a court ‘determine[d] that imminent bankruptcy would really be [an] impairment’ in that pension payments could not be made. (545)

“She also stated that ‘if the word ‘impairment’ bothers people, I suggest, if it is the wish of the Convention, that word could be deleted, and the rest of the [Clause] could stand’ via the word ‘diminish.’ (546) In addition, the Illinois Supreme Court concluded in Lindberg [People ex rel. Illinois Federation of Teachers v. Lindberg, 1975], McNamee [v. State, 1996], and Sklodowski [People ex rel. Sklodowski v. State, 1998] that the Clause guarantees that pension recipients will receive pension payments when they become due. (547) Relying on the statements of Delegates [Henry] Green and Kinney, the court explained in McNamee that the Clause was ‘intended to force the funding of pensions indirectly, by putting the state and municipal governments on notice that they are responsible for those benefits.’ (548) As a result, Sidley’s search for the ‘magic’ (549) word ‘guarantor’ in the Clause is unnecessary given the meaning of the terms ‘diminish’ and ‘impair.’

“The Pension Code sufficiently manifests intent to make pension payments the obligations of the State when due… [T]he Illinois Pension Code Article of each of the five state-funded pension systems contains a provision with sufficient language binding the State to pay pensions even if a system defaults. Each provision states in pertinent part that ‘[t]he payment of the required department contributions, all allowances, annuities, benefits granted under this Article, and all expenses of administration of the system are obligations of the State of Illinois to the extent specified in this Article.’ (550)…

“[E]ven if Sidley’s interpretation of the Pension Code were correct that the State is not a guarantor or that pension recipients only have a right to moneys in their respective funds, this conclusion cannot overcome what the Pension Clause requires. Section 9 of the Transition Schedule of the 1970 Illinois Constitution provides in pertinent part: The rights and duties of all public bodies shall remain as if this Constitution had not been adopted with the exception of such changes as are contained in this Constitution. All laws, ordinances, regulations and rules of court not contrary to, or inconsistent with, the provisions of this Constitution shall remain in force, until they shall expire by their own limitation or shall be altered or repealed pursuant to this Constitution. (559)… [E]ven if Sidley’s narrow interpretation of the Pension Code was correct, that interpretation would conflict with the demands of the Pension Clause and be invalid pursuant to Section 9 of the Transition Schedule of the 1970 Constitution. After all, the General Assembly cannot impair a constitutional guarantee by legislation. (564)

“In addition, the Supreme Court would most certainly reject Sidley’s public policy argument that the State somehow retains a reserved police power to abscond on its obligations to pension recipients should a pension system default. (565) As discussed above, Illinois courts have concluded that the Clause affords the legislature no such reserved power. (566) Relying on Kraus [v. Board of Trustees of the Police Pension Fund of the Village of Niles (1979], the Supreme Court explained in Felt [v. Board of Trustees of the Judges Retirement System (1985)] that to accept the Attorney General’s argument ‘we would have to ignore the plain language of the Constitution of Illinois, reject the New York decisions on the constitutional provision which was the model for section 5 of article XIII, and overrule this court’s decision in Bardens [v Board of Trustees of the Judges Retirement System (1961)].’ (567) As a New York court noted, ‘[a]lthough fiscal relief is a current imperative, an unconstitutional method may not be blinked.’ (568)

“A pension recipient would most likely obtain relief in circuit court through a mandamus action against the State Comptroller… [This writ is used when all other judicial remedies have failed or are inadequate]. Sidley is incorrect that a pension participant would need to seek relief before the Illinois Court of Claims should a State pension system default or be on the verge of default. Again, while the Illinois Supreme Court has held that the Pension Clause does not provide pension participants with a constitutional right to a specific funding percentage, (569) it undoubtedly guarantees them the right to receive the money due them at the time of retirement. (570)

“In addition, the Supreme Court has recognized, per the statements of Delegate [Helen] Kinney, that if a pension fund were ‘on the verge of bankruptcy or imminent bankruptcy’ and ‘benefits [were] in immediate danger of being diminished,’ then pension participants would have a cause of action in circuit court to enforce their right to receive payments. (571) Since the Clause acts as a restriction on legislative power, it is enforceable by the courts. (572)

“This conclusion comports with the drafters’ original intent, (573) and the voters’ understanding that pension recipients would receive their full benefits. (574) In addition, the Attorney General conceded and counsel for TRS in Sklodowski argued in its briefs that the Clause guarantees that pension participants could enforce their pension benefits in court and continue to receive pension payments from the State. (575) Sidley’s contention that no such arguments were made is simply untrue. (576)

“In sum, if the Illinois Supreme Court were confronted with a circumstance where a pension fund was on the verge of default and pension payments were diminished, then the court would most likely permit a mandamus action to proceed and resolve that action in the same manner as Jorgenson v. Blagojevich [2004]. (577) In that case, the court held that where a constitutional or statutory provision ‘categorically commands the performance of an act, so much money as is necessary to obey the command may be disbursed without any explicit appropriation.’ (578) The court applied this principal to compel the State Comptroller to pay judges from the State Treasury, without an appropriation, the cost of living increase that was part of their constitutionally-protected salaries under Article VI, Section 14 of the Illinois Constitution. (579)

“As noted, that provision bars the diminishment of judicial salaries just as the Clause prohibits the diminishment of pension benefit rights. Accordingly, the Supreme Court would most likely grant pension participants the same relief provided in Jorgenson by compelling the Comptroller to pay the needed funds from the State General Revenue Fund, especially since the State Pension Funds Continuing Appropriation Act requires automatic appropriations be made from the Fund to the five State pension systems. (580)…”

from IS WELCHING ON PUBLIC PENSION PROMISES AN OPTION FOR ILLINOIS?

AN ANALYSIS OF ARTICLE XIII, SECTION 5 OF THE ILLINOIS CONSTITUTION by Eric M. Madiar, Chief Legal Counsel to Illinois Senate President John J. Cullerton and Parliamentarian of the Illinois Senate, (pages 65-70).

http://teacherpoetmusicianglenbrown.blogspot.com/2013/02/what-happens-if-illinois-public-pension.html

February 11, 2013 at 12:38 PM

By: Rod Estvan

Yes... we all have read Madiar's analysis

Yes almost all the lobbyists in Springfield have read Madiar's legal analysis. It was posted on Rich Miller's blog the day it was released. It still does not mean the Illinois Supreme Court will rule in manner consistent with that legal opinion.

Based on a 1989 law after Emil Jones Jr. retired from the Illinois Senate in 2008, his annual pension was $122,334 a year. More than a third of all retirees in the legislative pension fund make more money now than they did when they served in government. Ten percent of them receive more than $100,000 in pension payouts every year, benefits that come on top of the free or deeply discounted health insurance for life.

The legislative pension fund is the state's worst-funded plan, with just 21 percent of the assets needed to cover what the legislature has promised itself over the years as of May 2012. According to an up dated report it is now at 17 percent.

It is my opinion that the Assembly may let its own fund fail first and refuse to provide funds to make good retired Senator Jones' full pension. So the cases that could go to court could be for people recieving pensions in excess of $100,000 a year, people recieving multiple state supported pensions, and on and on. The Court will have to deal with the reality of ordering the people to pay up for these crooks and this case could establish the prescient for all the other funds.

Things are more complex than they seem at first glance.

Rod Estvan

February 11, 2013 at 4:54 PM

By: Glen Brown

Defaulting on contracts (for Public Employees)

Rod, I will remain optimistic, nonetheless.

“[Any] attempt to denigrate the validity of decades of judicial precedents about the binding nature of legislation establishing pension commitments to government employees and to motivate state courts to overturn long-settled premises about these commitments would impose its own, unjustifiable costs. The states and their instrumentalities have promised pension benefits to their employees; those employees have relied on those long-standing promises; and as a result the citizens of the states have benefited from the services provided by those employees.

“There is no sound public policy reason to conclude that these promises – based on the reasonable expectations of the contracting parties – should not be fully protected by the laws prohibiting or limiting the impairment of contracts” (p. 15-16).

Greenfield, Douglas L., Lahne, Susan G. (2012). How Much Can States Change Existing Retirement Policy? In Defense of State Judicial Decisions Protecting Public Employees’ Pensions. National Council of State Legislatures Legislative Summit, 1-16. Retrieved December 9, 2012 from http://www.ncsl.org/documents/fiscal/DGreenfield_Presentation.pdf

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