Who Can Fix State’s Public Pension Crisis? Try H.G. Wells

Read the BGA’s recent three-part investigation: “Sticker Shock: Illinois’ Public Pension Crisis”

The best way to fix to Illinois’ deteriorating public pension system would be to hitch a ride on a time machine that would allow lawmakers to roll back decades of mistakes and mismanagement that produced a system at least $80 billion in the hole and going under fast.

But while the Illinois General Assembly is known to take the occasional flight of fantasy worthy of sci-fi master H.G. Wells, nobody in that legislative body has invented such a device—leaving them to concoct their own solutions to the public pension crisis.

So let’s look at some of the government pension issues and repairs being proposed by lawmakers and whether any have a chance to make it out of the General Assembly and onto the governor’s desk for a bill signing into law.

New Legal Opinion Slices Into Critics’ Efforts to Cut Ill. Worker Pensions

Another voice is heard in the ongoing debate over Illinois’ ailing public pensions but it won’t be the last one to speak out on this controversial issue.

Attorney Eric Madiar, chief legal counsel to Illinois Senate President John Cullerton, today weighs in with a comprehensive analysis about whether the Legislature can chop into the pension benefits of current public employees.

Madiar’s conclusion: No way.

In his analysis, Madiar argues any attempt by the Legislature to reduce current employee benefits in the public pension system would violate the state’s Pension Clause, which was adopted when the Illinois Constitution was drafted and approved in 1970.

Madiar’s analysis concedes the pensions are in financial straits while taking direct aim at arguments made by public pension critics and Chicago law firm Sidley Austin LLP, which contend the state is acting more like Santa Claus when it comes to funding public pensions with tax dollars and that reducing current state workers’ benefits is totally legal.

The Civic Committee of the Commercial Club of Chicago often cites Sidley’s argument when discussing the public pension fund crisis. The state’s five major pension funds are projected to be underfunded $80 to $100 billion—money the taxpayers are on the hook to eventually pay.

The Chicago Tribune editorial board has also echoed Sidley’s argument, calling for reducing the benefits of current state employees.

(The state has approved a law to reduce the pension benefits of new state employees.)

It’s unlikely that Madiar’s analysis will put to rest the issue of whether it’s legal to cut into current state workers’ pension benefits. Nor will it stop opponents from advocating huge benefit reductions.

Indeed, critics could dismiss Madiar’s analysis as a partisan interpretation on behalf of the heavily Democratic and pro-labor Illinois Senate.

Nonetheless, Madiar’s report will provide additional legal cover for those politicians who don’t want to take on the labor unions or tackle such a highly contentious issue.

By the way, Madiar does not say it’s impossible for the state to cut the benefits of current state workers.

Instead, he asserts that the only way to do so is through collective bargaining—an issue that’s ignited a firestorm of controversy between public employee workers and the governor of neighboring Wisconsin.

Statewide Update—Feb. 17, 2011

Photo courtesy lilhelen/Flickr

State Journal Register—Pension changes likely to be decided by state Supreme Court, “It will be up to the Illinois Supreme Court to decide whether changes to pension benefits for current state employees are constitutional, House Speaker Michael Madigan, D-Chicago, said Wednesday.”

• Bloomington Pantagraph—Lawmakers: Quinn’s proposal mostly falls short, “Although most lawmakers found at least a little to like about the governor’s relatively brief, broadly themed speech, all agreed it will be tough to reach an agreement on how to pay a mountain of old bills while financing current programs.”

• SouthtownStar—Editorial: Better, but Quinn’s budget still falls short, “We wholeheartedly agree that Regional Offices of Education are a waste of money—we learned that firsthand when we uncovered the corruption taking place at the Suburban Cook County office under the beleaguered Charles Flowers, who is charged with stealing $376,000 in public funds.”

• Daily Herald—Illinois EPA asks state to act against salt discharge in Bartlett, “The Illinois Environmental Protection Agency released a statement saying Bluff City Materials Inc. stored as much as 50,000 tons of salt at one time at 1950 Vulcan Blvd. in Bartlett and asking the attorney general’s office to take steps to make sure the salt is stored in an environmentally safe way.”

• Rockford Register Star—Rockford, Winnebago County leaders back school board review, “Mayor Larry Morrissey and Winnebago County Board Chairman Scott Christiansen said an independent review of the School District’s financial state could help settle the disagreement between the district’s money experts and its teachers union.”

Statewide Update—Jan. 31, 2011

• The Southern—Public takes advantage of changes to open government laws, “Instead of filing a lawsuit, members of the public can ask the Public Access Bureau in the Illinois Attorney General’s Office to review withheld documents or meetings complaints, to make sure government bodies are not violating the Freedom of Information Act or the Open Meetings Act.”

• Chicago Tribune—Rules let educators cross state line for new jobs while collection pensions, “A Tribune investigation has found that crossing state lines is one of the most lucrative ways for retired superintendents to collect multiple government checks without breaking pension rules…”

• (AP) Rockford Register Star—Pat Quinn to sign historic civil unions legislation, “Five states already allow civil unions or their equivalent, according to the Human Rights Campaign. Five other states and Washington, D.C., let gay couples marry outright, as do countries including Canada, South Africa and the Netherlands.”

• State Journal-Register—Lawmakers seeking more money from state retirees for health care, “The legislature’s Commission on Government Forecasting and Accountability will meet Wednesday to talk with two Quinn administration officials about how the state can craft an income-based formula for how much retirees will have to pay.”

• Daily Herald—Law firm donates to DuPage board members, wins contract, “Nine of the 15 DuPage County Board members who approved a no-bid contract for an Itasca law firm to help redraw the county’s electoral boundaries have accepted campaign contributions from the group or its attorneys, a review by the Daily Herald and the Better Government Association shows.”

• Chicago Tribune—CTA puts brakes on talk of closing Red Line stations, “The agency is in the early stages of soliciting feedback for an overhaul of the north branch of the Red Line and the Purple Line, from about Belmont north through Evanston and to Linden in Wilmette.”

• Peoria Journal Star—TIF board going back to beginning on East Bluff proposal, “At-large City Councilman Gary Sandberg noted that the Joint Review Board ratified the TIF district with only five of 11 members attending a meeting, which he said lacked a quorum.”

• Rockford Register Star—Lawsuit for Harlem Township records nears its end, “The township also has called the Freedom of Information Act requests by Mullins unduly burdensome and argues that some of the records she requested simply are not on file at the township.”

Statewide Update—Jan. 26, 2011

• Peoria Journal Star—Agency Director: I was told to get rid of Republicans; Court testimony comes in lawsuit filed by 16 former IDOT workers, “The former director of the state Historic Preservation Agency testified Tuesday that representatives of former Gov. Rod Blagojevich told him in 2003 to “get rid of Republicans” in his agency.”

• Daily Herald—DuPage hires remap consultant, spikes confidentiality clause, “Schirott, Luetkehans and Garner, P.C. will be paid up to $125,000 to serve as a consultant to the county board committee charged with configuring the future legislative map.  However, the firm won’t need to comply with a confidentiality clause that had DuPage County Board Chairman Dan Cronin raising concerns about lack of transparency.”

• Southtown Star—Quinn signs Medicaid reform into law, “Gov. Pat Quinn signed major reforms to Medicaid into Illinois law Tuesday, calling it a “landmark achievement” as he was flanked by a bipartisan group of state lawmakers who said the changes aim to reduce costs, pay bills sooner and target fraud.”

• (AP) State Journal-Register—Illinois Supreme Court will hear Rahm Emanuel appeal, “About the only thing abundantly clear after a chaotic and unprecedented day at the Chicago Board of Elections: Voters only get to vote once, even if their ballots are wrong.”

• The Southern—Overdue bills still an issue for Illinois, “The state’s stack of unpaid bills will soon double despite an income tax increase, according to state Comptroller Judy Baar Topinka.”

• Trib Local (Arlington Heights)—Taxpayers organize to influence politics, “Fed up with rising tax bills, residents have organized a watchdog group to  try and influence local politics and keep taxes down.”

• (AP) Peoria Journal Star—SEC reviewing Illinois pension predictions, “The Securities and Exchange Commission is reviewing the Illinois pension systems and state officials’ statements about how much future savings the state will get from reforms enacted last spring, Gov. Pat Quinn’s administration said Tuesday.”

• Rockford Register Star—Sheffields savings ideas: Close 8 Rockford schools, reduce staff, “Eight schools will close, gifted and several other programs will relocate to other schools, and kindergarten will shrink to a half-day program if the Rockford School Board adopts cost-cutting recommendations from Superintendent LaVonne Sheffield.”

Statewide Update—Jan. 5, 2011

• Chicago Tribune, Editorial—Legislators should look at cutting state spending first, “If you cut deeply and still don’t have enough revenue to balance the budget, then you can talk with the people of Illinois about more taxing and borrowing. But only then.”

• Bloomington Pantagraph—Death penalty vote near for lawmakers, “Lawmakers could vote to abolish the death penalty in Illinois as soon as Wednesday.”

• Southtown Star—State democrats nearing vote on tax increase, “Illinois Democrats are edging closer to a possible vote on raising income taxes during a lame-duck session of the state Legislature.”

• State Journal-Register—Plan to limit pension sweeteners advances in Illinois House, “A state constitutional amendment aimed at making it harder to sweeten public employee pensions moved to the floor of the Illinois House Tuesday, but its sponsor, House Speaker Michael Madigan, couldn’t answer key questions about the measure.”

• Bloomington Pantagraph—State lawmakers sign off on redistricting roadmap, “The proposal, approved on a 67-46 vote, requires lawmakers to hold a minimum of four public hearings about new legislative districts.”

• Herald-Review—City primary puzzle shows need to reform law, “The Illinois General Assembly has plenty on its plate right now, but it might be time to update municipal election laws.”

• Daily Herald—Lake County Laborers agree to concessions, “Laborers working for the Lake County Forest Preserve District have agreed to shave raises under a proposed two-year contract extension.”