 Gov. Bruce Rauner’s plan calls for a distinction between benefits already earned
and “new” benefits, or benefits earned after a new pension law were passed.
Because benefits already earned would not be decreased, the Rauner
administration contends its proposal would not violate the 1970 state
constitution’s pension protection clause, even in light of a state high court
ruling that last week tossed out a 2013 pension reform act.
“We don’t think the court clearly answered what benefits are protected,” said
Kim Fowler, chief lawyer for Rauner’s budget office.
The Republican governor’s pension plan, which he says could save the state $2.2
billion in fiscal 2016, relies on paying out benefits at existing levels, Tier
1, for work already performed by state employees. But it would pay less-generous
benefits, Tier 2, for all state employees starting in the fiscal year that
begins July 1.
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Gov. Rauner’s plan to tackle Illinois pension crisis got a cool reception from
Democrats.
Rep. Scott Drury, D-Highwood, did not agree Rauner’s plan would pass
constitutional muster. He cited a portion of the Illinois Supreme Court decision
issued Friday:
“The protections afforded to such benefits by (the pension protection clause) …
attach once an individual first embarks upon employment in a position covered by
a public retirement system, not when the employee ultimately retires,” the court
wrote.
“Accordingly, once an individual begins work and becomes a member of
a public retirement system, any subsequent changes to the pension
code that would diminish the benefits conferred by membership in the
retirement system cannot be applied to that individual.”
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Drury, a former assistant U.S. attorney, said that to him means the
contractual relationship starts on the date of employment, and the
state can’t lessen benefits from that day forward.
“The holding is not nearly as ambiguous as you’re making it out to
be,” he told Rauner staff members. “That proposal isn’t realistic
anymore in light of what the court did.”
Rep. Mike Zalewski, D-Riverside, concurred: “There is no reading of
that decision that squares with your testimony today,” Zalewski
said. “I’m sorry to have to say it that way.”
Rep. Jeanne Ives, R-Wheaton, said she didn’t think Rauner’s proposal
is necessarily invalidated.
“I think the governor’s proposal is absolutely fantastic,” she said.
“I’m all for it.”
No one shows up today at General Motors or AT&T and believes they’ll
be getting pension benefits that people earned in the past, Ives
said.
The committee seemed less chilly to the governor’s desire for a
constitutional amendment ballot question in time for the 2016
general election.
Fowler said the proposed amendment language would make clear that
benefits already accrued under the law in effect during a period of
service must be protected. With that said, the amendment also would
make clear the General Assembly and governor have the right to alter
pension statutes through new legislation, she said.
A three-fifths vote of each chamber of the Legislature could place a
constitutional amendment question on the 2016 general election
ballot. To be enacted it would also need approval by three-fifths of
voting on the question or a majority of those voting in the
election.
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