Bob Lyons: The Illinois Supreme Court did give them a road map: DON’T GO HERE, THERE ARE RULES.

Bob Lyons, right. Bob is one of two retirees elected to the TRS board.

– By Bob Lyons. Bob is one of the two elected annuitant representatives on the TRS board of directors.

The day in early December 2013 that saw SB1 pass both houses of the legislature witnessed a second bill become law that mandated the Illinois Attorney General would represent the state pension funds in any suit that they were involved.  When then the Illinois is One coalition sued the state and the pension systems over pension benefits being cut Lisa Madigan’s office issued an edict that the boards and staffs of the pensions systems should say, “No comment” when asked about the merits of the legal action.  From that point I restricted what I said about the suit in anything that I would email out, especially if it would have a wide distribution.  When talking to people I would say what I thought.

Those of you that heard me speak on this issue know that I thought the state’s actions were wrong, clearly unconstitutional, and that I was  convinced that the Illinois Supreme Court would in time rule that the Illinois Constitution means exactly what it says that pension benefits cannot be diminished nor impaired.  There were those that called me naïve, reminding me that Speaker Madigan had even bragged that he had four judges in his pocket, that the judges needed Madigan’s money to get reelected, and “He who pays the pipers calls the tune.”   Well, I had over the years occasionally taught law and specifically taught the Illinois Constitution.  I believed the justices would follow the rule of law and that there was no chance that they would allow the state to break a contract that was protected by the constitution.   Based on their decision in the Kanerva health insurance case last July, I predicted that when the court did make their decision on our case that they would rule 7-0 that SB1 was unconstitutional.

Over the last year and a half I have talked to a number of legislators, some that thought the law might be constitutional, others unsure, and some that knew it would be thrown out, but many of them also said that their hope was that the Supremes would give them a road map of what they could do to cut costs by cutting benefits or restricting the future benefit of benefits.

The Illinois Supreme Court did give them a road map:  DON’T GO HERE, THERE ARE RULES.

From the Decision:

The financial challenges facing state and local governments in Illinois are well known and significant. In ruling as we have today, we do not mean to minimize the gravity of the State’s problems or the magnitude of the difficulty facing our elected representatives. It is our obligation, however, just as it is theirs, to ensure that the law is followed. That is true at all times. It is especially important in times of crisis when, as this case demonstrates, even clear principles and long-standing precedent are threatened. Crisis is not an excuse to abandon the rule of law. It is a summons to defend it. How we respond is the measure of our commitment to the principles of justice we are sworn to uphold.

 While we celebrate the rule of law, remember the five pension systems have over a combined $111 billion in unfunded pension liability that is due over the next thirty years.   Unfortunately the state may next waste some more time trying to change the constitution to remove our protection in a futile effort that tries ignoring the ex post facto clause in both the Illinois and United States Constitutions.  Hopefully the day will soon come when the governor and legislators realize they need their collective wisdom to look at trying to raise revenue in a way that Illinois can pay all of its bills and still increase prosperity.

From the Decision:

One alternative, identified at the hearing on Public Act 98-599, would have been to adopt a new schedule for amortizing the unfunded liabilities. The General Assembly could also have sought additional tax revenue. While it did pass a temporary income tax increase, it allowed the increased rate to lapse to a lower rate even as pension funding was being debated and litigated. ¶ 68 That the State did not select the least drastic means of addressing its financial difficulties is reinforced by the legislative history. As noted earlier in this opinion, the chief sponsor of the legislation stated candidly that other alternatives were available. Public Act 98-599 was in no sense a last resort. Rather, it was an expedient to break a political stalemate.