Dear Ken Davis and Steve Rhodes. About the pension protection clause.

First, let me say that I love Steve Rhodes’  Beechwood Reporter blog.

And I love Ken Davis and his Chicago Newsroom. I have been a guest several times, although not lately.

What’s up with that?

Although to be fair, I was invited recently and had a scheduling conflict.

But watching this week’s show I let out a noise that caused Anne to come running down the stairs to see if I had suffered a stroke. Or worse.

Discussing the Illinois Supreme Court ruling that threw out Rahm’s attempt at pension theft, Ken wondered about the intent of those who insisted on the language that clearly says that pension benefits may not be diminished or impaired, a guarantee that starts on the day an employee is hired.

At 4:05 of the show my friend Ken Davis says he has always wondered about the intent of those at the 1970 Constitutional Convention when they included the language of the pension protection clause. And Steve wonders too. “Someone should write a story,” says Ken.

Someone has.

The Illinois Supreme Court, when they ruled SB1 unconstitutional, wrote:

Concern over ongoing funding deficiencies and the attendant threat to the security of retirees in public pension systems eventually led directly to adoption of article XIII, section 5, the pension protection clause, when the new constitution was adopted in 1970.

Delegate Green, one of the provision’s sponsors, introduced it to the Constitutional Convention by reminding his fellow delegates of the poor job governmental entities had done in meeting their pension obligations over time.

He pointed out that: “[i]n the past twenty-two years the unfunded accrued liabilities of these pension plans in Illinois have increased from about $359,000,000 to almost $2,500,000,000, and the unfunded accrued liabilities are real and are not theoretical obligations based upon service already rendered. Despite the consistent warnings from the Pension Laws Commission, the current budgeting of pension costs necessary to ensure the financial stability of these funds, the General Assembly has failed to meet its commitments to finance the pension obligations on a sound basis. In 1967 the General Assembly approved Senate Bill 515 which provided for the appropriation to one state university retirement system, to at least equal to an amount which would be necessary to fund fully the current service costs and to cover the interest on the past service; and despite this legislative mandate, the General Assembly refused to appropriate the necessary funds. Now, during this two-year period alone the appropriations under this system were $67,000,000 less than the minimum required by the senate bill. Now, what we are proposing is being carried out in some other states ***. Our language is that language that is in the New York Constitution which was adopted in 1938, really under a similar circumstance. In 1938 you were about at the end of the Depression, but there was a great consideration on the part of the New York General Assembly to really cut out some of the money that they were giving to the pension programs in New York; and it was for this reason that the New York Constitution adopted the language that we are suggesting. Since that time, the state of New York—the pension funds for public employees have been fully funded, and so I think we have good reason to believe that this type of language will be a mandate to the General Assembly to do something which they have not previously done in some twenty-two years.” 4 Record of Proceedings, Sixth Illinois Constitutional Convention 2925 (statements of Delegate Green) (hereinafter Record of Proceedings).

Delegate Green’s remarks were followed by statements from Delegate Kinney, who noted in further support of the provision that the proposed creation of broad home rule powers for municipalities had led to concerns that, unless they were constrained, municipalities who preferred to use retirement money for other public purposes such as street repair might abandon their pension obligations, leaving police officers, firefighters and other civil servants unprotected. Id. at 2926 (statements of Delegate Kinney).

Delegate Bottino, in turn, observed that: “participants in these pension systems have been leery for years of the fact that the—this matter of the amount the state has appropriated [for pensions] has been made a political football, in a sense. In other words, in order to balance budgets, you see, the party in power would just use the amount of the state contribution to help balance budgets, and this had gotten to the point where many of the so called pensioners under – 6 – this system were very concerned; and I think this is the reason that pressure is constantly being placed on the legislature to at least put a fair amount of state resources into guaranteeing payment of pensions.” Id. at 2930-31 (statements of Delegate Bottino).

The solution proposed by the drafters and ultimately approved by the people of Illinois was to protect the benefits of membership in public pension systems not by dictating specific funding levels, but by safeguarding the benefits themselves.

So, Ken and Steve. It is no secret what the Constitutional Convention delegates meant or what the voters approved.

They simply did not trust the legislature and politicians to do what they were entrusted to do.

They were smart men and women who lived in Illinois.

They knew.

They wrote with unequivocal clarity that the promised pensions must be paid, no matter what.

In fact, they pretty much knew exactly that what has happened would happen.

And still they said that the promised pensions must be paid.

The writers of the Illinois Constitution wrote it down.

And the voters of Illinois approved it.

And the highest court in the state confirmed it.

Again.

13 thoughts on “Dear Ken Davis and Steve Rhodes. About the pension protection clause.

  1. Why woudll anyone trust gov’t to do anything?
    Having said that a financial guarantee has no place int he constitution. Why not have a guarantee for payment of the light bill?

  2. Jane Adams (yes, one in the same), implored the Illinois legislature to fund pensions at a better rate. Even then, 100+ years ago, government was stiffing public workers.

  3. Hi Fred. As I recall the discussion, neither Ken nor I were confused at all about the intent of the pension protection clause. Ken even read it on the air. It seemed obvious to us that diminishment and/or impairing pensions were clearly prohibited, and that the “solutions” offered by the city and state that reached the Illinois Supreme Court were obviously unconstitutional – so much so that we marveled at how much time (and money) was lost waiting for these cases to be heard.

    Perhaps you are referring to another part of the discussion – why this clause is enshrined in the state constitution (and since 1970, not the beginning of statehood, at the behest of pols – including Richard M. Daley – whose motives should surely be questioned) instead of, say, part of collective bargaining. I understand the historical concern with pensions being underfunded; maybe those responsible for that could have been held accountable in some sort of way, including being charged with dereliction of duty, or even fraud. Maybe the state shouldn’t have made it all but impossible to open pensions up to negotiation in the case of, say, a natural disaster or nuclear bomb that leaves the state in a post-apocalyptic condition. Or maybe this was the way to go. Ken and I made clear that we support workers getting the pensions they were legally promised. As far as I’m concerned, I say, stop the games and simply “Pay up!” Better: find a way to get the money to do so by tracking down every pol and crony (and union official) who benefited from the state not contributing its fair share. At the same time, it’s okay to wonder what the pols were thinking in 1970 and to suspect that the motives of each and every one of them wasn’t as pure as the excerpt you provide seems to suggest.

    • Yes, Steve. I appreciate that both of you agree that we public employee pension members are entitled to our promised pensions. I was referring to the section in the video in which you and Ken addressed the “framer’s” intentions. Ken recalled that he always wanted to track it down and that someone should do a story on it. I was simply pointing out that it was no mystery. Their intentions are spelled out in many places. If you want, I can cite them for you. But why question what you called the purity of their concerns? They were clear enough about why they included such concise language in the constitution that the ISC chose to include it in their decision. What other reason would you suggest?

  4. I don’t understand why a mandate to fund pensions was not included in the law. They mandated payment, but not funding. Doesn’t make sense.

  5. Steve,
    “It only matters insofar was we were wondering why the clause was there to begin with. Historical curiosity.”

    The answer is simple. Funding pensions in Illinois had a problematic history before the new constitution was adopted in 1970. The legislators in 1970 tried to correct the practice of underfunding by past General Assemblies and governors through indirectly putting pressure on our lawmakers. They reasoned that through the “pension clause” in Article XIII, Section 5, our legislators and governors would now be forced to fund pensions properly because pension payments to retirees as of 1970 became a constitutional mandate. Unfortunately, it didn’t take lawmakers and governors long to do end runs around their responsibility to fund because they also lacked the revenue to run the State. Revenue was and still is the responsibility of the General Assembly and governor. Illinois’ reliance on a regressive tax structure that fails to produce sufficient revenue has been and is still the root of not only underfunding pensions, but also of the shortfalls that we see in the state’s responsibility to fund public safety (including infrastructure), health, environment, and education.

    For more information, go to the TRS (Teacher Retirement System) webpage for a history of pension funding. Another source of funding info is the webpage of the Illinois Retired Teachers Association.

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