Carbonatix Pre-Player Loader

Audio By Carbonatix

The
Illinois Supreme Court heard arguments last week on whether a controversial law
cutting public pension benefits was constitutional.

The
high court’s decision will play a pivotal role in determining how Illinois
deals with its growing unfunded public pension liability, especially as Gov.
Bruce Rauner seeks to further cut pensions to close a massive budget hole in
the coming fiscal year.

On
March 11, Illinois Solicitor General Carolyn Shapiro defended the law before
the seven-justice panel on behalf of the state. Shapiro said the language in
the Illinois Constitution’s pension clause assigns public pensions the same protection
as contracts, but no more.

“(The)
plaintiff’s ask the court to say that the pension clause goes far beyond
elevating public pensions to contracts, and instead turn them into an unheard-of
public right,” Shapiro said. “That it not what the clause says. That is not
what the clause was intended to do.”

Shapiro
said that Illinois has a right to use its “police powers,” afforded to states
by the 10th amendment to the U.S. Constitution, to alter contracts
under extreme circumstances. She said the current budget shortfall is one of
those circumstances.

Lawyers
Gino DiVito and Aaron Maduff, who argued on behalf of state employees and
retirees against the landmark pension legislation, watched as the justices
argued against the law for them. Justice Robert Thomas questioned Shapiro whether
siding with the state would mean giving lawmakers license to change all of its
contracts at will.

“Isn’t
that, in fact, exactly what we would be doing?” Thomas asked. “If the court
holds that the state can invoke its police powers to violate core constitutional
guarantees to respond to an emergency that – at least arguably – the state
itself created, then aren’t we giving the state the power to modify its
contractual obligations whenever it wants?”

Shapiro
contended that invoking police powers is not that simple.

“Invoking
the police powers is not something that the state can do willy-nilly,” Shapiro
said. “It can only occur in the context of the need to address an important
public purpose.”

However,
Shapiro tried to steer the argument away from the police powers issue, instead asking
the court to send the case back to Sangamon County Circuit Judge John Belz so
she could make her case there, a move that would result in further stretching
out the court proceedings. That request appears to conflict with the state’s
position that Illinois’ fiscal situation is a crisis in need of immediate and
decisive action.

Shapiro
said the court’s decision was needed quickly to guide the General Assembly in
making future pension changes.

“We
of course hope and expect that our arguments will be persuasive to you and that
you will in fact remand (the case to the circuit court),” Shapiro told the
justices. “But if you were not to, it would be very important for the General Assembly
to know that as soon as possible.”

If
the case is referred back to the lower court, the state must then prove that
the fiscal situation is in fact a crisis, one worsened by the fact that the
income tax increases of 2011 were allowed to expire. Gov. Rauner’s proposed
budget for fiscal year 2016 relies heavily on a savings of $2.2 billion from
his own version of pension reform, which would undoubtedly go through its own
constitutional challenge. The Governor’s Office of Management and Budget did
not respond to a request for comment on whether a delay would have any impact
on the next fiscal year’s budget.

Aaron
Maduff, one of the lawyers for the state retirees who sued the state, likened
Shapiro’s argument to the “Lizzie Borden defense,” saying state lawmakers
created the pension underfunding problem by skipping mandatory payments, and
now the legislature wants state pensioners to pay for the fix.

“I killed my parents; have mercy on me,” Maduff
mocked. “I’m an orphan.”

Contact Alan Kozeluh at intern@illinoistimes.com. 

Leave a comment

Your email address will not be published. Required fields are marked *