It’s Cullerton vs. crowd on pensions
RICH MILLER firstname.lastname@example.org March 22, 2013 9:34AM
Updated: March 22, 2013 9:37AM
What we have in Springfield right now is an epic legislative stalemate over an issue of absolute importance.
On one side we have the Senate president, John Cullerton, who says he wants to make sure that any pension reform legislation has a chance of being constitutional. On the other side, we have pretty much everybody else.
And I’m not sure why.
Cullerton came up with a plan that makes a whole lot of sense. His legal team was dubious at first that any public worker pension benefit could be reduced because our state constitution expressly forbids it:
“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.”
The transcripts of the constitutional convention clearly show that the language was concocted to make sure that the General Assembly adequately funded the state pension systems or risk certain calamity when the whole thing crashed and burned. Like now.
Eventually, Cullerton’s lawyer applied a legal theory known as “consideration.” The pensions are contracts, so to alter those contracts you have to offer something of value in exchange for taking something else away. Offering continued access to government-subsidized health insurance premiums in exchange for taking away annual cost-of-living adjustments was what they came up with.
Almost immediately, though, the super-duper elite Civic Committee claimed that the idea would “lock in” billions of dollars in retiree health-care obligations. It would actually do no such thing. Illinois law allows the government to raise or lower retiree premiums based on the state’s fiscal condition, and a judge recently threw out a constitutional challenge to the statute.
The Civic Committee, a group of wealthy business executives headed up by former Republican Attorney General Ty Fahner, also has claimed that Cullerton’s proposal wouldn’t save enough money. But last year, Fahner supported a bill that actually would have increased state costs in the short term and saved the state just a few billion dollars over the long term.
Fahner has been all over the place. He supported a pension bill sponsored by House Speaker Michael Madigan last year, then claimed a few months later that the pension problem was “unfixable.” He demanded that cost-of-living increases be eliminated altogether, but now backs a plan that allows COLAs on the first $30,000 of pension income.
Cullerton took the plan endorsed by Fahner and grafted his own pension reform language onto it. Cullerton’s “consideration” proposal wouldn’t take effect unless and/or until the courts ruled that the Fahner-backed proposal was unconstitutional.
Fahner didn’t like that idea, either. And he and lots of big-business types lobbied hard against it, along with a certain editorial board down the street, and forced Republicans off the bill. That killed the proposal, and the Fahner-backed bill was defeated as well.
Meanwhile, the House has passed a few bills that will save some significant money, including a proposal approved Thursday that caps COLAs at $750 a year or 3 percent, whichever is less. The House has already approved legislation increasing the retirement age and capping pensionable income at $113,000.
What the House hasn’t done is take up Cullerton’s “consideration” idea, but the Senate president adamantly refuses to back off what he considers to be the only constitutional way forward.
And that, in essence, is what’s behind this doozy of a stalemate.
Somehow, this problem has to be resolved. I expect we’ll see lots of public bashing of Cullerton over the next several weeks to force him to back down. He doesn’t deserve it.