Lisa Madigan: We Are One is Responsible for Illinois Fiscal Mess!

Lisa Madigan: We Are One Did It!

In the opening of A New Leaf, one of my favorite Walter Matthau films, an angry and non-repentant Matthau is castigating his financial advisor for a bounced check, one that has made the one-percenter Matthau look like “some kind of indigent.”  His advisor tries cautiously to explain to Matthau that he has been overspending his inheritance annuity for the last so many years, and he has now exhausted his capital. 

Matthau refuses to accept this scenario; instead, he blames the advisor. 

Used to be funny.  Not now…

Attorney General Lisa Madigan in her “Police Powers” rebuttal to Judge Belz of Sangamon County, also fingers the victim in the first few opening pages of the refutation, blaming the We Are One Coalition for leading the legislators on and intentionally charming them into additional fiscal misfortunes.

Indeed, Madigan’s office responds, “(we) allege that the labor organizations comprising the We Are One Illinois Coalition, aware that the state had limited revenues each year, repeatedly urged state legislators to allocate greater appropriations for state employee salaries and salary increases at the expense of contributions to the state-funded retirement systems, knowing that a result of this would be both an immediate reduction in the assets in those retirement systems and long-term increases in their liabilities.”

Perhaps a Governor Walker of Wisconsin could nod in agreement with this convoluted proposition in contradiction of collective bargaining, but the historical reality of “at the expense of contributions to state-funded retirement systems” in Illinois begs some historical accuracy:

·      In fact, it was pension holidays taken by the legislators over nearly half a century that created the dizzying pit of unfunded debt to the retirement systems, not a COLA here or an ERO there.  In nominal dollars, the money not paid into the TRS retirement fund alone would be $15 billion.  Had it been paid as expected and planned for by an honorable and future-looking General Assembly, the fund would stand at approximately 86% funded ratio, not the 41% the State has created.  (http://teacherpoetmusicianglenbrown.blogspot.com/2013/04/total-state-contributions-to-teachers.html)

·      Since 1995, the state has faced limited revenues by strapping itself to an ill-conceived and foolish payback scheme for the mountain of debt it faced in paying back earlier ignored pension obligations.  Instead of amortizing the debt, the General Assembly decided to design (with the help of business interests) a balloon mortgage heading into the Great Recession.  Moreover, the General Assembly still refuses to consider amortizing the debt as one would a home mortgage, and Illinois will face exponentially increasing debt payments for its reluctance in the next decade(s).

·      Collective bargaining provides for better working conditions as well as for improvements in retirement security.  Often, students are the recipients of such efforts by unions – not just employees.  Agreements in improvements that went beyond the classroom and into the arena of fiscal security were matched by increased contributions on the part of actives working in the public sector.  These contributions jumped during my professional career from 7.5% to 9.4% of my salary by the time I retired.  Furthermore, public workers, including teachers, paid 100% of what was expected and the escalations with increased benefits.  (http://teacherpoetmusicianglenbrown.blogspot.com/2013/03/the-proposed-increases-of-trs.html)

Taking this kind of perplexing illogic a bit further, We Are One becomes culpable for acting as a union in the first place.   This is circular: you’re wrong for being who you are.

In addition, I also recall the furor that erupted when We Are One revealed Cullerton’s SB2404, and the IRTA quickly threatened to take legal action on the unconstitutionality of the bill if it were to pass.  SB2404, if you remember, was the bill that offered an additional 2% in contribution by actives as well as a forced selection between health care and a COLA for retirees.  Madigan eventually killed the bill, and categorized it as another one bringing in much too little in monetary relief. 

Pension bloggers, as I remember, were extremely wary of any deal with the members of the General Assembly, especially one that promised “to pay the normal costs from now on or you can take us to court.”  An identical promise included now in SB1 (PA98-0599 ) and one that even pension-committee-member Representative Elaine Nekritz (D-Northbrook) admitted was hollow or more likely able to be changed at the discretion of another, later General Assembly. 

And, not surprisingly, Lisa Madigan’s opinions do not end with just placing blame for fiscal irresponsibility on the We Are One Coalition.  Actually, the Attorney General is also so bold as to suggest that We Are One’s promotion of SB2404 is an indication of the collective unions’ own culpability and acknowledgement of responsibility in the state’s fiscal morass.  In her rebuttal to Justice Belz, she asserts that the We Are One Coalition tries to deny an earlier affirmation of complicity. 

“Defendants allege that We Are One Coalition and the unions comprising it publicly declared that a reasonable component of a valid solution to the State’s enormous pension liabilities and related financial crisis was a 2% increase in contributions by active members of state-funded retirement systems, but have now insisted that all of the sacrifice   necessary to solve this crisis must be borne by the State’s taxpayers and recipients of other state services and benefits.” 

This last argument is laughable if it were not representative of the moral and ethical vacuity, the complete disregard of historical truth, and disturbing conduct beneath the office of an Attorney General. 

In the end of her “Affirmative Matter” or call for Reserved Sovereign Powers in defending PA98-599 as legally acceptable before the court, Attorney General Madigan  declares the Act’s “presumption of constitutionality includes the reasonableness and necessity for its provisions in light of circumstances faced by the State and the General Assembly when it was enacted.”

Reasonableness and Necessity?

There is no mention of the usual and accepted tenets of the use of “Sovereign Powers”: public health, morals, safety, the general well-being of the State.  This is Police Power at its most raw and least altruistic – the identification of a class or group of individuals who have suffered through the political misappropriation and diversion of what was contractually owed them and now would be punished for being victims to begin with.