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SPRINGFIELD  –  Illinois lawmakers are no longer talking about being fair to public employees with pension reforms. Instead, with about a month to go in the legislative calendar, lawmakers are focusing on the courts.

By Benjamin Yount

SPRINGFIELD  –  Illinois lawmakers are no longer talking about being fair to public employees with pension reforms. Instead, with about a month to go in the legislative calendar, lawmakers are focusing on the courts.

A new wave of pension reform proposals, all from Republicans, got a Tuesday hearing in the Illinois Senate.

Two of the plans, from Sen. Bill Brady, R-Bloomington, and Sen. Jim Oberweis, R-Sugar Grove, would move public workers out of their current defined benefit plans and into defined contribution plans.

“I do think it’s constitutional,” Brady told a Senate panel. “It doesn’t reduce anything that anyone is earning right now, or at any age that they are entitled to earn it.”

Brady’s plan would freeze Illinois’ five retirement systems on Jan 1 2014, meaning workers would be able to keep what they have already earned. But would be moved to a defined contribution plan after that.

Oberweis’ plan is similar to Brady’s proposal, but would be tougher on cost of living adjustments for public workers. Oberweis worked with the Illinois Policy Institute to craft his proposal.

“We have to pass the boldest reforms in the nation, because we have the worst pension crisis in the nation,” Ted Dabrowksi a pension policy analyst for the Illinois Policy Institute said. “Not to put a Band-Aid on the problem, or even pass what some people might think are decent reforms that will only have us back here five years from now.”

Democrats, who control the Illinois General Assembly, quizzed the GOP architects on their pension reform plans, but remain skeptical.

“If we pass Sen. Oberweis’ bill and it is litigated. It takes a year. If the court throws it out, then your savings are exactly zero…and we would have wasted a year to pass some kind of reform,” Senate President John Cullerton, D-Chicago, added.

Cullerton has been trying for months to get lawmakers on-board with his pension reform plan that would offer public workers a choice between higher pension payments or lowered pension benefits.

Cullerton said the key to ending Illinois’ pension crisis is to pass a constitutional law.

“I’m not trying to block a bill like your, I’m trying to pass it,” Cullerton explained to Oberweis. “So that we can get it in front of the court and they can tell us if it is constitutional. But if they find it unconstitutional, we need a back-up.”

The Illinois Constitution protects public employee pensions, but no one is sure to what degree.

“You would have to make the case that there are no other options,” Kent Redfield a professor of political science at the University of Illinois at Springfield said of how to get around the Illinois Constitution. “Simply saying we would have to not share tax revenue with local governments or Illinois would have to cut education spending may not be enough.”

House Speaker Mike Madigan, D-Chicago, seems to be making that case in a pension reform proposal he unveiled Tuesday.

Madigan methodically details Illinois’ dismal fiscal condition as part of his revamped reform that would tweak COLA’s, cap salaries that pensions are based on, but guarantee state pension funding.

Lawmakers have set a May 31 deadline to pass some sort of pension reform.

Contact reporter Benjamin Yount at Ben@IllinoisWatchdog.

Related story

Madigan makes pension move, submits own plan (Chicago Business)

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1 Comment

  1. And the courts have said!

    The Illinois Constitution says that public pensions are contractual relationships whose benefits cannot be diminished or impaired.

    The U.S. Constitution's contract protection clause says that no state shall pass a law that impairs the obligation of contracts.

    Basically, Speaker Madiigan is counting on bill passing Constitutional muster because of financial emergency necessitating police powers that can over-ride the Illinois and U.S. Constitution, as well as other existing Illinois laws.

    I am not an attorney. But, according to Westlaw, the most cited case about the U.S. Constitution’s contract protection clause and states powers is the case, U.S. Trust Co. of New York v. New Jersey, 97 S.Ct. 1505. In that case, the U.S. Supreme Court stated:

    “Contract Clause of [U.S.] Constitution limits otherwise legitimate exercise of state legislative authority, and existence of important public interest is not always sufficient to overcome that limitation……..”.

    also:

    “If a State could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose, the Contract Clause would provide no protection at all.”.

    Additionally, the Illinois Supreme Court’s ruling from Jorgensen v. Blagojevich stated, “No principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem.”.

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