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Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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Mark, you called for pension reform( aka. pension cuts) notwithstanding the constitution. You tried to barge into the front door with pension cuts but the Supreme Court barred the door with the law. Now….you want to break into the back door with pension cuts by way of a Constitutional amendment. You will find that the contracts clause, U.S. and Illinois is guarding that door too. Instead of trying to find ways for Illinois to back out of thier contracts…..why not use your intelect to find ways for Illinois to HONOR its contracts. Surely thier has to be a part of… Read more »
I don’t know how other viewers may have reacted to it, but when I saw Gov. Rauner reacting on TV yesterday to the IL Supreme Court’s decision regarding the December 2013 ill-fated attempt to “reform” IL public pensions I was appalled at his take on it, so ill-informed as to their reasoning and legal justifications as to seem uninterested or simply not well briefed. Basically, while he agreed that benefits already earned are untouchable as to reduction or diminishment he then immediately went into the same, well-rehearsed talking points he’s been giving on that topic for weeks now, stating that… Read more »
Paul- I said repeatedly, before and after the decision, that SB-1 DOES violate the state constitution, that the court was right to invalidate it, and that an amendment is required to achieve benefit reductions needed. All state constitutional issues, including the contract clause and the ex post facto clause, can be disposed of by a properly broad amendment. It’s oxymoronic to think that a constitutional amendment would be unconstitutional as a matter of state law. You are wrong to think that the U.S. Constitution’s contract clause is an impediment. Much has been written on that. Most recently, the Fourth U.S.… Read more »
Mark, the court in Cherry jr. V. Mayor and city council of Baltimore City said the U.S. contracts clause did not bar pension cuts in the Baltimore pension case BECAUSE the pensioners had a STATE remedy. That state remedy was for guess what? Breech of contract. Your reading Cherry way to broadly to think that after amending the Illinois Constitution and thereby, potentialy, closing any State remedy that a federal Contracts clause problem would not then be ripe. Even if the Illinois Pension Clause is changed you still have the Illinois contracts clause as a barrior. State breech of contacts… Read more »
You are quite right on one point, that Cherry is premised on existence of s state contract claim, and I did not mean to imply that it eliminates the issue. But there’s a big question about what a contract claim really means for pensioners, especially as to unearned benefits. If the state ever had the will to amend the constitution, it would likely also have the will to do a number of other things to help it’s situation, such as granting liens to favored creditors ahead of pensions, which some other states are doing. Unsecured creditors would not be in… Read more »
Mark, I marvel at the mindset behind the thought you’ve expressed to Paul: “All state constitutional issues, including the contract clause and the ex post facto clause, can be disposed of by a properly broad amendment.” Maybe you know what you are talking about here, but to me it sounds as if you might be inhaling the same fairy dust that all those Chicago business club leaders and state legislators were using when lauding, promoting and eventually voting for the now-defunct SB 1. I’m not a lawyer, but surely if it “sounds like a duck, looks like a duck and… Read more »
On that comment I made to Paul about an amendment disposing of state law issues, you don’t need to be a lawyer, but you do need to understand what an oxymoron is. A state constitutional amendment cannot be unconstitutional in that state if it is broadly drafted enough. Nothing could be more obvious. It would, however, be challenged in Federal court under the US Constitution, as I said. I am open to seeing any authority that people have on that issue, though it appears to me so far that reform would be upheld, as happened in Colorado.
Hallelujah! Who would have guessed that despite the bloviating and parsing of the 1970 IL Constitution’s “Pension Clause” in its entirety, by its separate clauses and even by its individual words from lawyers, governmental officials and business leaders of all stripe the IL Supreme Court has declared that the clause means exactly what the everyday meaning clearly states? Its a win for those who believe in, and have spent entire careers depending upon, the enduring sanctity of the law versus the political expediency of the moment.
Um, James, you’ve apparently are not a regular reader here. I, for one predicted this, as did most everybody. And I happen to think this decision was properly decided, at least as to earned benefits, which I also wrote. But you are about have a lesson in something the private sector knows: Pigs get slaughtered. A constitutional amendment is now almost certain. Hopefully, the reform that follows will still protect those with reasonable pensions who need them, but those who have been grubbing for their lousy 3% automatic COLA, spikers, double-dippers, etc. will get dinged.
Mark, I don’t see how the IL legislators and governor can now do anything whatsoever to “diminish or impair” benefits accruing from past or present membership in any of the state-supported public employee pension systems, contrary to the last thought you’ve expressed above. Now, for future hires I’d agree that’s another matter entirely, I’d bet. Still, no one can doubt that extra taxes of varying amounts and types will be required to dig IL out of the massive financial hole the long-standing underfunding of the state’s pension systems has created. So, public employees and pensioners will be expected to take… Read more »