Staggering debt obligations of House’s pension reform should require 60% approval
EDEN MARTIN firstname.lastname@example.org May 22, 2013 6:46PM
Updated: May 23, 2013 2:23AM
Representatives of organized labor in Illinois contend that the pension-reform bill recently passed by the House would be unconstitutional because it diminishes or impairs the claims of retirees. I think it’s probably unconstitutional for a very different reason.
Our Legislature can spend money by simply passing an appropriation — by majority vote of both houses and with the approval of the governor.
However, the framers of our state Constitution realized that the incurring of debt was more dangerous to the future of the state. So they provided that debt may not be incurred for general purposes except under tight limits in amount and duration, and that debt “for specific purposes” may not be incurred — “or the payment of State or other debt guaranteed” — except by a vote of three-fifths of the members of both houses.
The Madigan pension reform bill passed by the House (though not the Senate) would impose a new “contract obligation” on the state, mandating annual funding. This funding obligation is declared by the House bill to be “protected and enforceable under” Section 16 of Article I (prohibiting any law impairing the obligation of a contract) and Section 5 of XIII (the pension clause) of the state Constitution. If the state should fail to pay the “amount guaranteed,” a special judicial “mandamus” mechanism is made available to compel payment.
This is a column — not a legal opinion. But it doesn’t take a lawyer to read the guarantee language that would make the pension funding payments a “contract obligation” of the state, and that refers to these annual payments as the “amount guaranteed.” This funding commitment would bind future legislatures to appropriate billions of dollars each year for decades. The total value of these funding obligations would be vastly more than any amount of debt ever previously assumed by our state.
If ever there were a moment of monumental importance to the future of the state — one when the extra protection of a super-majority vote should be required — this is surely it.
The drafters of the Madigan bill may argue that their bill only guarantees annual funding of the debt. But that annual funding is precisely the means by which “payment of” the “other debt” — the pension fund debt — is being “guaranteed.”
Why raise this point now, when the Senate hasn’t even voted yet? In part to assure that the super-majority requirement will be honored. In part to underscore the extraordinary seriousness and immensity of risk to the state represented by the proposed guarantee.
If Springfield hangs this fiscal albatross around our state’s neck, we can be sure Chicago’s pensions and CPS’ won’t be far behind. Who will be asked to guarantee those obligations?
Moreover, if the state were to guarantee funding of these obligations — including those of the K-12 school districts and state universities and community colleges — what would be the point of Speaker Madigan’s gradual “shift” of funding responsibility back to the school districts and colleges? If they fail to fund, would the state still be the guarantor?
We ought to make sure that at least 60 percent of our legislators in each house think this is a good idea. And if they do, we ought to remember.