"(W)e have concluded that the provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them."
— Illinois Supreme Court, ruling that the Illinois Constitution says even a retiree health benefit cannot be reduced, July 3, 2014.
We've turned the Illinois Supreme Court majority opinion upside down and held each of its 20 pages to a Windexed mirror. But nowhere can we find the essential truths of Thursday's 6-1 ruling that the Illinois Constitution guarantees subsidized health care premiums to retired state employees. The candid passage we're trying to find would have the majority saying something like this:
"We realize our ruling probably makes it all but impossible for citizens who care about Illinois' future to stanch the bleeding of retirement costs that threatens the futures not only of state government, but of thousands of local governments. This ruling is about medical premiums. In these pages, though, we've all but ruled on the much bigger question now making its way to us: The pension reform bill that legislators passed and the governor signed into law last December? We won't actually say 'Dead On Arrival' today, but.
"Hey, don't blame us. Blame the people who wrote such broad pension protection wording into the 1970 Constitution that if back-scratchers were a freebie benefit for public retirees, taxpayers would have to keep supplying those, too. And blame the lawmakers of both parties who in succeeding decades cut sweetheart deals that enormously expanded pension and other retirement obligations. Who did they think would pay for all this? Oh, and for those legislators who thought they could promise to pay public workers' retiree medical premiums as a trade-off or "consideration" for reducing future pensions, fuhgeddaboudit: Those retiree medical premiums are already guaranteed to retirees."
For lack of such candor, all of us citizens who care about Illinois are doomed to a bracing reality: The question now isn't whether the justices got this right or wrong, any more than tornado survivors can profitably wonder whether the funnel should have veered south. No, the question now is how to begin saving Illinois from the at-first-blush devastating impact of this ruling on many of Illinois' 7,000 governments.
If you've hoped your state and local governments would find more dollars for your children's school, or for your loved ones' health care, or for just about anything other than paying retirement benefits to public employees, your hopes aren't dashed just yet. There are long-shot chances that Thursday's ruling on health premiums doesn't presage the court's eventual rejection of the pension reform law, too. But if you had to bet ...
This is terrible news for Chicago Mayor Rahm Emanuel, Cook County Board President Toni Preckwinkle, leaders of Chicago Public Schools, university administrators — for all public officials in Illinois who've counted on lawmakers to reduce their future retiree benefit costs. They learned Thursday that they're stuck with a constitutional mandate that is headed in a bizarre direction, no matter how financially unrealistic for taxpayers:
The Supreme Court has come close to declaring that whatever retirement benefits were in place on the first day of a worker's public job can't be reduced for however many decades he or she is alive.
How to intelligently react? One option, which we reject despite its temptations, is to surrender to defeatism — to murmur that, as a practical matter, this will be the death of Illinois. The plot line:
The politicians whose deals with public employee unions created these unaffordable retirement benefits (yet who didn't fund them) surely won't blame themselves, or accept blame from taxpayers, for awarding generous benefits in return for votes, campaign contributions and muscle on Election Days. Instead they'll keep raising taxes and spending ever more of that revenue on retiree benefits. So they'll drive away employers, drive away families, and thus cheapen the worth of every home, business and farm. That is, they'll keep pushing jobs, and people, into Indiana, Michigan, Wisconsin, Iowa, Missouri and other states that are making themselves more competitive even as Illinois becomes less competitive. Who will grow jobs here? Who will invest in bigger shares of Illinois taxpayer obligations that are rising, not falling?
A better option is for the politicians who own — sorry, we should say run — Illinois governance to declare right now that they will put before us an amendment to refine the state constitution's retiree benefits protection wording.
The pols also should guarantee that they finally will take budget pressure off taxpayers by eliminating layers of costly Illinois bureaucracy. Seven thousand governments? More than 800 school districts?
And the pols should finally adopt the structural budget reforms and massive cost-cutting that civic watchdog groups and other constructive voices have impatiently advocated for eons.
Because without swift and genuine assurances from our political class that Illinois governments won't have to bankrupt themselves and their taxpayers, that's the fate that many smart citizens will anticipate. Anticipate, and find ways to avoid — even if doing so means abandoning Illinois to the insiders whose self-serving politics catalyzed this crisis.