Happy anniversary to Illinois’ public employees!
It is almost four years to the day that the Illinois Supreme Court ruled that the state’s constitution meant what it explicitly said: Pensions are an enforceable contract which the state that cannot diminished or impair.
May 8th, 2015.
The heads of corporate capitalism who would normally hold a contract sacrosanct and conservatives who normally would argue that each letter of the constitution cannot be left to contemporary interpretation were appalled.
This same sort of hypocrisy is visible again as those who scream about welfare for the poor are cheering on a two billion dollar tax subsidy for the Sterling Bay Lincoln Yards public housing project designed exclusively for the wealthy.
It appears that Governor JB Pritzker, who ran on a promise of a progressive and fair state income tax, is now following up.
There is an actual bill. Or rather a constitutional amendment, SJRCA1.
Put in a witness slip as a PROPONENT for a constitutional amendment to allow a graduated income tax (the Fair Tax!), SJR1, to be heard in committee tomorrow (Wed.) a.m: http://my.ilga.gov/WitnessSlip/Create/114006…
The corporate funded Better Government Association has now weighed in.
David Greising is president and CEO of the group.
In yesterday’s Crain’s Chicago Business he calls on Springfield to hold a fair tax hostage in exchange for the pension protection language of the Illinois constitution.
The Illinois Constitution’s best-known codicil is the one that declares pensions are a contract that can never be “diminished or impaired.” Those words have stood in the way of several fair-minded reform plans, including one passed by the Democratic-led Legislature in 2013 that the Illinois Supreme Court later killed.
Adding a change to the pension clause, alongside the plan for reform of the tax system, would constitute a classic negotiating strategy: The progressive tax appeals to liberals and the pension fix to more fiscally conservative voters.
The pension fix also makes good policy in its own right. Chicago Mayor Rahm Emanuel even called for it late last year, in the waning days of his mayoralty.
Well. As long as Rahm thought it was a good idea.
No. It is a stupid idea.
The Governor and legislature should move ahead with the fair tax. It should end a state revenue system in which those who are the most wealthy and those who are the working poor pay the same rate of income tax.
But a constitutional amendment erasing the pension protection clause?
Just no. And here’s is why.
Ending the pension protection clause would do nothing to erase the $133 billion dollar pension debt that the state currently owes. It would still have to be paid.
All current employees and current retirees would still have their pension benefits protected. A change in the language cannot legally be applied retroactively.
Members of the state pension systems would continue to receive their 3% compounded yearly post retirement increases.
Could the contractual pension arrangement with future hires change? Yes. But they don’t need a constitutional language change to do that.
The legislature has already done that with Tier I and Tier II.
The Governor and the legislature need to focus, focus, focus.
Don’t be distracted by the stupid theories of David Greising and the misnamed Better Government Association.
Pass a fair tax.