Supreme Court throws wet rag on pension plan

Written By By Mark Brown Posted: 07/05/2014, 08:30pm

That pre-holiday firecracker lobbed under the Statehouse dome by the Illinois Supreme Court has the potential to reverberate through the state for years to come.

By ruling that the subsidized health care benefits of retired state employees are protected by the Illinois Constitution, the court raised the unpleasant specter that there may be only one way out of the pension mess facing the state as well as local governments.

That is: come up with the money, no matter how painful.

Once the noise dies down and the shock wears off, we could even see public officials here start to seriously ask out loud whether we’re really all that much better off than the bankrupt city of Detroit.

It wasn’t just that six of seven justices sided with state retirees by preserving their right to free health insurance, it was how they did it that was sure to cause agita from the governor’s office to the 5th floor of City Hall.

At every turn and in the strongest of language, the high court seemed to go out of its way to uphold the ironclad sanctity of the 1970 Illinois Constitution’s “pension protection” clause for public employees.

That clause has always appeared straightforward on its face with its declaration 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.”

But that has never prevented lawyers from arguing otherwise or kept some political leaders from perceiving wiggle room that would allow them to pare down the state’s unwieldy pension obligations by reducing public employee retirement benefits over the objections of the unions that represent them.

That made Thursday’s court decision a huge victory for state and local government workers throughout Illinois but also a decided setback for taxpayers who would be stuck with the bill.

Neither did it do much for Gov. Pat Quinn or Mayor Rahm Emanuel, each of whom have pinned their hopes of stabilizing government finances on pieces of legislation pushed through this year to cut pension benefits.

Both political leaders issued statements through spokesmen minimizing the impact of Thursday’s ruling on their overall pension-reform efforts, but if they really believe that, I think they’re kidding themselves.

While the court did not directly address the question of whether there are circumstances under which pension payments could be cut, there was nothing in the opinion to encourage anyone to think they could.

Consider these telling quotations from the Supreme Court’s opinion:

“We may not rewrite the pension protection clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.”

“In light of the constitutional debates, we have concluded that the provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of funding to pay for them.”

“Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner.”

Observed Ann Lousin, a professor at John Marshall Law School and a staff lawyer at the Constitutional Convention where the pension provision was drafted: “It certainly does not make it look rosy for the [pension-reform] bills.”

Some tried to take encouragement from a lone dissent by Justice Anne Burke, who argued her colleagues had not only botched their decision but failed to actually decide the matter. The only problem is that she seems to be alone on that island of thought.

Others noted Thursday’s ruling did not directly deal with the two main legal arguments raised in defense of the state’s pension-reform legislation. One is that the state faces a financial emergency that allows it to do what it needs to protect the welfare of its citizens. The other is that state employees are receiving “consideration” for their reduced benefits in the form of lower contributions.

True, but if you re-read those quotes I gave you from the court’s opinion, it seems the justices may have been anticipating those lines of reasoning.

Over the last several years, one of the best arguments I’d heard in favor of cutting pension benefits instead of imposing the massive tax increases that would be needed to make the pension system whole was this: The Illinois Constitution is not a suicide pact.

Now I’m thinking, I’m too young to die.


Twitter: @MarkBrownCST

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