Pension funding "reform" is going to wind up here, regardless of what route it travels in coming years |
For
the Illinois Retired Teachers Association managed to get their arguments
against the pension funding reform measure the General Assembly managed to
approve this year – and the teachers couldn’t even wait until the new year.
THEIR
LAWSUIT IN Cook County Circuit Court got slipped into the legal process before
Janet Davies could do her annual “sayonara” to 2013. Of course, there will be
other groups representing various political interests who also will file
lawsuits to make sure they’re represented in this political fight.
All
of the groups that hate what the state Legislature did concerning pensions are
going to want to claim it is their lawsuit that took down the law that is
desperately needed.
All
the people who are desperate to believe that the state is trying to resolve its
financial problems at the expense of its retired employees aren’t going to care
if their success in court winds up tossing Illinois government into an even
bigger financial jam!
And
all of those who just want to cause mischief for state government? They will be
the big winners.
THIS
IS ALL caused because of the fact that for many years going back to the 1940s,
state government short-changed the amount of money it should have been putting
into funds to cover the costs of providing pensions in the future to its
retired employees.
Short-changing
an expense works if you only do it briefly, then immediately come back and put
a surplus of cash into the accounts to make up for the brief loss.
But
as many people find out when they try doing the same thing to pay their own
bills, the short-changed expense often does not get replenished in a timely
manner. As time passes, it becomes more and more difficult to cover the cost.
In
the case of state government, the debt had grown so large that it was eating up
state funds that government officials would prefer to spend on other areas –
such as education, health care, public safety or other programs.
THE
COST-OF-living adjustments meant to account for inflation were causing the debt
to grow so large. Something had to be done; something desperate and drastic.
Such
as the limits on the adjustments in future years. The increases written into
law won’t be as big. EXCEPT, …
The
lawsuits are all going to find various ways of claiming that such a cut
violates the clause in the state constitution that says public pensions are a “contractual
relationship” whose benefits “shall not be diminished or impaired.”
They
are taking such a literal, hard-lined interpretation that I suspect the masses
of Illinois will become incredibly disgusted if they actually prevail in court.
THIS
MAY BE one of those times when the fact that the courts have their own moments
of being politicized may wind up giving us a benefit.
Because
the perception by some political observers is that Illinois House Speaker
Michael Madigan’s influence over the courts is such that there isn’t a judge
alive who would be willing to have his (or her) name on a court order that
struck down the pension funding reform measure.
This year's issues will carry over into future |
I’m
not about to guess how this issue will eventually be resolved – other than to
say that if “pension reform” does wind up getting struck down, any future
attempt at reform by the Legislature will likely be even more punitive.
And
we may someday see the organized labor interests that are desperately fighting
against this version of pension reform wishing they had accepted it while they
had the chance!
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