THE CONSTITUTION AND THE PENSION PROPOSAL > Capitol Fax

26 Apr
Illinois’ Constitution is pretty darned clear about public employee pension benefits. They “shall be an enforceable contractual relationship,” according to the document, “the benefits of which shall not be diminished or impaired.”

So, then, how is Gov. Pat Quinn’s plan to change the current pension plan to forbid basing pension benefits on future pay raises constitutional?

Well, the answers are kinda vague.

Senate President John Cullerton believed, at first glance at least, that the proposal is constitutional because it offers employees a legitimate choice: Either stay in the current plan and face the loss of a higher pension and receive no government subsidy of their health insurance, or move to another, lower tiered plan that has fewer benefits, a higher retirement age, larger contributions and continued subsidized health insurance.

But doesn’t imposing a choice on employees from above violate that sacred contractual relationship demanded by the Constitution? If that was the case, then couldn’t the state just say, “Hey, you’ve got a choice between a 401(K) and a 401(K) plus a thousand bucks,”? Obviously not. So, what about this choice?

According to the governor’s office, “legal principles allow you to amend the contract.” And since the structure of the new plan provides that “each active member receive consideration to the Stabilization Benefit Changes in exchange for the new funding plan, future pensionable wage increase; and future retiree health benefits” then it should pass constitutional muster.

I’m not sure if anyone really believes that or not. So far, several states with far less stringent constitutional language have watched their unilateral pension reforms go down in flames once the courts got ahold of them. Perhaps that’s why the governor’s office isn’t ruling out a negotiated settlement with the unions.

Senate President Cullerton’s spokesperson said that her boss was attempting to be supportive of the governor’s plan last week without explicitly saying he believed everything in it was totally constitutional. Cullerton’s statement last week strongly indicated that he thought it was constitutional.

House Speaker Michael Madigan’s spokesman was careful not to issue a blanket endorsement of the plan yesterday, saying only that elements of the proposal would come under review.


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