Sunday, March 17, 2013

Statute? (I Don't Need to Give You Any Stinking Statute!)

Laurence Msall

Statute?  What Statute? (I don’t have to show you any stinking statute)

Lately, many of the corporatists in Chicago who wield influence and the monetary power to re-elect in Springfield have been pushing back against the addition of a “promise to pay statute” in several of the new pension reform bills presently floating in the General Assembly. 

SB 2404, now with nearly 20 sponsors, offers a statutory promise to pay pensions or resultant courtroom litigation.  In fact, SB2404 grants each retirement plan participant the power to bring a writ of mandamus against the State if any representative organization (TRS, for example) does not.  In other words, any specific person for any specific reason of being denied benefits may seek litigation.  Despite the many sponsors, the aforementioned pension reform bill is not a favorite of the corporatists: the Civic Federation, the Illinois Policy Institute, or the Civic Committee of the Commercial Club of Chicago.  Their leaders – Lawrence Msall, John Tillman, Ty Fahner – find little to endorse in the one bill that signifies a collaborative effort between We Are One (the collective public sector unions) and the legislators. 

Senator Daniel Biss
Instead, the well-heeled executives of Chicago are backing a much more draconian bill that offers many cuts to benefits of public employees – both active and retired.  SB0035 would eliminate many of the benefits of current and retired teachers, but even those who crafted the bill (Senator Dan Biss & Rep. Elaine Nekritz) recognize some State culpability for the loss of many billions of dollars diverted/taken/stolen from the public employee pension funds by earlier state legislators for decades.  They are not alone.

Augmenting past fiscal impropriety, a recent action by the SEC accuses the State of Illinois as fraudulent in the selling of bonds while whitewashing the exact nature of the state’s extraordinary debt for non-payment to the pensions (and the state’s later weaseling out of payments back to the funds from those bond sales)( ).  
Ty Fahner of the Civic Committee

Think pension holidays.  Even the Tribune was compelled to publish a nearly accurate article, which made them consider even ex-governor Jim Edgar as culpable.  On the other hand, the Tribune carefully avoided looking any further back; otherwise, still living and in some cases paroled ex-governors would take center stage.  And this would force them to correct earlier sensational stories that Dixon’s comptroller Rita Crundwell was the biggest thief of municipal funds in Illinois history – and the Tribune hates to make corrections. 

Back to SB0035, a bill that would cap pensionable salaries, increase contributions to the highest in the nation, diminish cost of living increases, and increase retirement age.  Now, in its latest editorial, the Tribune follows the lead of Ty Fahner and other business leaders who decry the inclusion of such a statute in any bill, although they have unanimously decided that SB0035 is the optimal outline for pension reform (,0,7659593.story ).  

Fahner, a long time good-friend and political partner to Governor Jim Thompson, has suggested that just having a solvent pension system is more than enough for those of us who have been given a contractual guarantee by the State of Illinois.  In other words, after they eviscerate our benefits and force us all to pay for the billons owed us, they (Fahner and the General Assembly) have no reason to provide any statutory promise to pay again.   
IPI's John Tillman

Even though its logic is lacking, the Tribune dresses Fahner’s sentiments in more serious and solemn pontification: “One Caveat on Biss’ bill: It includes unfortunate language that would put the state on the hook for regular payments into the pension funds as a contractual obligation. That’s a worthy commitment but also one stronger and more enforceable than what’s now in state law.  Which makes it a precarious requirement that we hope the House will eliminate.  Why so?”  The Tribune goes on to lecture that many things can happen between now and 2045.  They also suggest the state should – “not tie its own hands.”  

In other words, as Ty Fahner, John Tillman and Lawrence Msall would bluster, “Just getting a pension is your benefit, and keeping it solvent (for however long) is our temporal gift.  Take it or leave it.”  In actuality, the Tribune is endorsing the same set of loose interpretations, empty promises and partial payments that historically created the mess in which the State of Illinois now finds itself.  Some opinions are indeed better than others.
Speaker Madigan and Representative Nekritz

And why are the captains of industry and Zell’s pet paper project so frightened of this particular piece of the possible – bad-and-not-as-bad - bills before the legislature in Springfield?  Once, when Representative Nekritz was asked about a bill or law to force payment to the pension funds, she replied honestly and cynically, “We (the General Assembly) can undo any bill that we make after we make it.” 

Countering her unsettling comment, some of the equally honest and cynical representatives of veteran retirees have sarcastically reminded us all that the State has promised to make payments before, but we should trust them now because they promise in writing?  Wink, wink.  Nod, nod.

Others who strongly support SB2404 point to the statuary pomise as "ironclad" and "historic."

When asked about the actual permanence or enforceability of such a statute a few months ago at a Jobs for Justice meeting, Mr. Nigro from We Are One responded that any sudden or swift alteration in a promissory statute to pay to the Illinois pension funds would be unlikely as it would cause the blatant loss of credibility on the part of the General Assembly.  In other words, despite Nekritz's warning, once passed, it would likely remain; although the question of what kind of General Assembly would be seated in 2040 remained an issue.  Just as those who created the pension mess have departed the General Assembly (except for Madigan?), so too might the culture of the General Assembly change considerably in the next few years, and Mr. Nigro and several of the legislators in the room agreed that mutations could occur. 

On the other hand, the real answer may lie somewhere in the middle.  When asked, an Illinois contract lawyer and one Illinois Senator both agree that a law could be changed, but the precedence of its existence would remain. That is to say, according to the Senator, once installed as a member of the General Assembly, an individual (or body) could hardly refuse to follow the established legal commitments made as a body entire in the past.  In other words, he suggested, “I can hardly say that I or we will not pay those kinds of bills anymore since I was not here to make that original promise.  When we sign up to be part of something like the General Assembly, we take on those responsibilities – past and present and future.”  While it might be an arguable point, it would nevertheless present an interesting reference for any judicial review of an attempt to evade a due bill or responsibility.

Back to the extremists.  What the Tribune and their friends in Chicago business would have instead is business as usual.  What remnants of retirement security are left after their hopeful passage benefit destruction SB35 would be simply “enough.”  That is your pension, or what’s left of it.  There will not be a promise to pay for even that much – or that little. 

Thank you, sir.  May I have another?

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