Getting on the same page about the facts on Illinois pensions is a necessary first step. Unfortunately, we have a way to go, thanks in part to errors in news and opinion articles.
The latest example is from an author we usually agree with in an article we otherwise like. It’s Jim Nowlan’s guest piece in Crain’s this week, “Police and fire unions must lead on pension reform.” He’s certainly right that it would be in their own interests for police and firefighter pensions to come to the bargaining table to fix an unsustainable pension system.
However, he claims that’s the only way to fix our pensions. Why? Because a state constitutional amendment to our pension protection clause won’t work under the United States Constitution, he wrote. “The state high court has said that benefits already granted are contractual, and a state constitution cannot override the U.S. constitutional right of contract.”
That’s dead wrong. We’ve often spelled out why that’s wrong, and we have plenty of company. While the issue might be litigated, it has become increasingly clear that federal constitutional objections would lose and a constitutional amendment would work, and that’s almost certainly true for the particularly distressed towns and cities Nowlan wrote about.
Just this June, the Rhode Island Supreme Court rejected what Nowlan called the “constitutional right of contract” as well as other federal constitutional objections to pension reform. They were applying the same federal law that would be applied if Illinois were to amend its constitution. See our article on that. Last week, James Spiotto, a nationally recognized legal expert on insolvency, wrote to the same effect. A growing number of newspapers, including Crain’s and the Chicago Tribune, have also endorsed an amendment, as has The Civic Federation.
Nowlan’s error undermines his own point about union cooperation. They won’t negotiate if they remain under the mistaken impression, propagated by their leadership, that the federal constitution guarantees their full pension. In contrast, Arizona unions have twice negotiated and agreed to amendments to their state constitution, which had a pension protection clause identical to ours. While some individuals dissented, nobody bothered to sue. More importantly, the world didn’t end.
For further information on the legal issues pertinent to amending our constitution to allow for needed pension reform, see the following:
- Rhode Island Supreme Court Shows Illinois The Way On Pension Reform, June 2019
- There’s No Legal Reason Not To Pursue An Illinois Constitutional Amendment For Pension Reform, April 2019
- Illinois Constitutional Pension Amendment Is Long Overdue – Crain’s, November 2018
- Arizona Amends Its Constitutional Pension Protection Clause. World Doesn’t End. November 2018
- Arizona is model for Illinois on pension constitutional amendment – Crain’s, November 2018