OP-ED: PENSION RULING WILL DEVASTATE STATE AND LOCAL BUDGETS
By State Rep. Ron Sandack (R-Downers Grove) -
Severe cuts to services, raising taxes significantly or amending our IL Constitution might be our only options for fixing Illinois' financial crisis after the Illinois Supreme Court ruled on July 3 that health insurance premiums are a benefit that is protected by the Illinois Constitution. It is a devastating blow to the State, which was relying on retiree contributions to their health care costs as a means for helping shore up the massively-underfunded state pension systems.
The 6-1 ruling relates to a legal challenge that stemmed from the 2012 health care reform bill passed in the General Assembly and signed into law by Governor Pat Quinn. The reform bill included a provision that allowed the state to collect a portion of the cost of premiums from retirees for their state-subsidized health care. Prior to the approval of the 2012 pension reform legislation, retired state workers with 20 or more years of service were entitled to receive free health insurance.
In the majority opinion, written by Justice Charles Freeman, the court held that the constitution supports the conclusion that health insurance premium subsidies are part of a contractual relationship with retirees that cannot be diminished:
"We conclude that the state's provision of health insurance premium subsidies for retirees is a benefit of membership in a pension or retirement system within the meaning (of the Constitution) and therefore the General Assembly was precluded from diminishing or impairing that benefit."
Many believe Thursday's ruling sets the stage for the recently passed pension reform bill, SB01, to be found unconstitutional. While I fully respect the court's decision, I was admittedly surprised by the justices' expansive interpretation of the constitutional language as it relates to health care and how it will likely relate to our pension reform bill.
With this ruling guiding future decisions, I believe the ultimate ramifications will be nothing short of financially devastating for the State and for municipalities that also must provide for employee pensions.
Rep. Sandack is a state representative and former mayor of Downers Grove, IL. The above opinion editorial was distributed in Rep. Sandack's weekly newsletter.Severe cuts to services, raising taxes significantly or amending our IL Constitution might be our only options for fixing Illinois' financial crisis after the Illinois Supreme Court ruled on July 3 that health insurance premiums are a benefit that is protected by the Illinois Constitution. It is a devastating blow to the State, which was relying on retiree contributions to their health care costs as a means for helping shore up the massively-underfunded state pension systems.
The 6-1 ruling relates to a legal challenge that stemmed from the 2012 health care reform bill passed in the General Assembly and signed into law by Governor Pat Quinn. The reform bill included a provision that allowed the state to collect a portion of the cost of premiums from retirees for their state-subsidized health care. Prior to the approval of the 2012 pension reform legislation, retired state workers with 20 or more years of service were entitled to receive free health insurance.
In the majority opinion, written by Justice Charles Freeman, the court held that the constitution supports the conclusion that health insurance premium subsidies are part of a contractual relationship with retirees that cannot be diminished:
"We conclude that the state's provision of health insurance premium subsidies for retirees is a benefit of membership in a pension or retirement system within the meaning (of the Constitution) and therefore the General Assembly was precluded from diminishing or impairing that benefit."
Many believe Thursday's ruling sets the stage for the recently passed pension reform bill, SB01, to be found unconstitutional. While I fully respect the court's decision, I was admittedly surprised by the justices' expansive interpretation of the constitutional language as it relates to health care and how it will likely relate to our pension reform bill.
With this ruling guiding future decisions, I believe the ultimate ramifications will be nothing short of financially devastating for the State and for municipalities that also must provide for employee pensions.
Rep. Sandack is a state representative and former mayor of Downers Grove, IL. The above opinion editorial was distributed in Rep. Sandack's weekly newsletter.
PREDICTION: The State of Illinois will file for bankruptcy protection. It will soon be followed by Chicago, Cook County, and dozens of villages, school districts and park districts.
Everyone is going to get that haircut. It all starts after the November election.
Some of these would be pensioners are suggesting that government services be severely cut back just so past pension obligations can be met. All I can say is the past is the past. Did you people really think you were going to get that money? After all, it was promised to you from politicians.
ReplyDelete1. I'm not sure states can file bankruptcy.
ReplyDelete2. Bankruptcy is for cities and counties that have debts and no way to pay them. Chicago and Cook County do have a way to pay their debts. They have a viable tax base and Chicago has TIF money put away. Raise taxes. Spend the TIF money. Chicago's property tax rate is the lowest in Cook County. It's not unreasonable or impossible to raise taxes to pay debts incurred by elected representatives.
I'm sure we will find out soon enough. Meanwhile, pensioners should begin to make other arrangements.
DeleteYeah, some of us believe a contract is a contract. I'd like to see all elected officials carry some sort of errors and omissions insurance. All government employees contributed their end to the pension funds. The negligence and arrogance of politicians deciding that these employee funds would be the piggy bank for various entitlement programs was willfully dishonest. Municipalities and other government agencies that failed to satisfy their legal obligations to contribute to the funds just pisses me off when they start talking about how employees are greedy, expecting their employers to live up to their end of the bargain. But my favorite character in this fiasco has to be the former Mayor, who when asked about his nephew dipping into the funds for real estate investments that went south claimed not to know anything about it. Last time I looked, the mayor has 2 members of his cabinet that sits on each of the city's pension fund boards. You'd think one of them might have mentioned that his nephew stopped by to borrow a few million. What shit.
ReplyDeleteA contract is a contract and must be enforced. An ill gotten contract is an ill gotten contract and needs to be rewritten.
DeleteWell in this instance the toothpaste is already out of the tube. Those that are finding fault with the legislation that defined the terms of government pensions come in after employees have contributed 9% of their earnings for upwards of 20 years, some contributing for 30 and 40 years. To come in after the fact is like playing poker, dealing the cards and saying Aces and deuces wild, and after seeing the cards, saying 3's and 9's are wild. The cards were dealt and government employees kicked in their fair share. They don't qualify for social security and rely on pensions for income after retirement. For politicians to all of a sudden say oops, we goofed doesn't cut it.
Deletetell it to the bankruptcy judge
DeleteDON"T CUT MY PENSION!!
ReplyDeleteRule number one, ACT ALONE tell NOBODY, EVER. Don't say cutesie innuendos at the bar.
Plan. Make it quick and decisive. Know the risks. Do it. Shut your mouth. Repeat keep your
mouth SHUT. Conscience may bother you on occasion and give you doubt about your actions. Ignore
it, it'll pass. Remember you did civilization a solid.
I do not think we are going to lose our pensions all together.
ReplyDeleteJust 30 to 40 per cent off the top.
DeleteChicago and Cook County have valuable assets that can be sold to pay off their financial OBLIGATIONS:
ReplyDeleteairports, lakefront real estate, park land, forest preserves, etc.
Great idea, lets sell everything to the scape dealers. Screw the future generations just so the greed of the past generation can be satisfied.
DeleteWhoever wrote the above is a moron.
We should sell the assets of these politicians that are getting 2, 3 or 4 government pensions.
DeleteHow would you like to pay off a 30 year mortgage and discover that, instead of a house in Hinsdale, you actually own a house in Robbins?
ReplyDeleteUnion officials and anyone else whose job it was to protect the pensions need to be rounded up.
ReplyDeleteAttention pension crybabies. Don't worry, this too will pass. In 20 years enough of ya'll be dead and buried. The system will be solvent again.
ReplyDeleteWe need a state law that says only 1 public pension per person.
ReplyDeleteThey're going to try to tax their way out of this. state income tax 50% increase right after election. temporary of course. The damage will be irreversible. Chicago = next Detroit.
ReplyDelete