Pension Foes Allied Against Constitutional Amendment

Pension-related amendment to state constitution on Nov. 6 ballot is confusing, catastrophic and fake reform, say foes and legal experts. What you need to know before you vote.

By Jayette Bolinski, Illinois Watchdog

SPRINGFIELD — Opposition to a proposed pension-related constitutional amendment that will go before Illinois voters Nov. 6 is creating strange bedfellows — from public employee unions to good-government groups that agree the question is not worthy of a change to the state’s constitution and does nothing to address the pension crisis.

 Groups opposed to the amendment are numerous and come from all walks of life. It’s no surprise that public-employee unions are opposed to the amendment, which requires a three-fifths majority vote before any public body can approve a pension benefit increase.

Good-government groups, such as the Center for Tax and Budget Accountability and the Illinois Policy Institute, also are against it. So are Protestants for the Common Good, the state’s League of Women Voters and the Illinois Green Party.

The groups usually don’t see eye-to-eye on how to achieve pension reform. But Constitutional Amendment 49 has turned adversaries into allies, each with an eye on a common goal – defeating the amendment.

“I wish I could say that it was because of shared principles that such diverse groups are coming together to oppose this,” Diane Cohen of the Chicago-based Liberty Justice Center said of the unexpected alliances. “We certainly just view this as fake reform. It does nothing to address the pension crisis in the state. But worse than that, it sort of pulls the wool over the voters’ eyes to try to pretend that the legislators are actually doing something in the face of this crisis.”

Pension Shortfall of $85 Billion to $200 Billion

Illinois has a pension-funding shortfall of at least $85 billion. New reporting requirements by investment groups put the liability in the neighborhood of $200 billion.

In April, the Illinois House unanimously approved a measure put forth by Speaker Michael Madigan, a Democrat, that would ask voters if approval of public-pension boosts in Illinois should require a supermajority vote of three-fifths (60 percent) instead of a simple majority vote. Madigan called it “tough medicine” for a state deep in debt.

The Illinois Senate also approved the measure, with only two lawmakers there voting against it.

Since then, critics have called the proposal “catastrophic,” “do-nothing,” “misguided,” “incomprehensible” and “diabolical and feckless.”

“The only people we’ve seen pushing this so far are the politicians themselves,” said Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees Council 31, which represents thousands of state workers. “It really validates our view that this is a politician-protection amendment. This is not a pension amendment. It should be defeated.”

Groups that support the amendment are difficult to find.  Others have found numerous reasons to object.

For example, the language is too long and complicated for average voters to understand, some say. The proposed Illinois constitutional amendment is more than 700 words — longer than the preamble to the U.S. Constitution and the Bill of Rights. Meanwhile, the diluted explanation of the proposed amendment that voters will find on the Nov. 6 ballot is just more than 200 words long.

This is what voters will see on the ballot:



Explanation of Amendment

Upon approval by the voters, the proposed amendment, which takes effect on January 9, 2013, adds a new section to the General Provisions Article of the Illinois Constitution. The new section would require a three-fifths majority vote of each chamber of the General Assembly, or the governing body of a unit of local government, school district, or pension or retirement system, in order to increase a benefit under any public pension or retirement system. At the general election to be held on November 6, 2012, you will be called upon to decide whether the proposed amendment should become part of the Illinois Constitution. If you believe the Illinois Constitution should be amended to require a three-fifths majority vote in order to increase a benefit under any public pension or retirement system, you should vote YES on the question. If you believe the Illinois Constitution should not be amended to require a three-fifths majority vote in order to increase a benefit under any public pension or retirement system, you should vote NO on the question. Three-fifths of those voting on the question or a majority of those voting in the election must vote YES in order for the amendment to become effective on January 9, 2013. For the proposed addition of Section 5.1 to Article XIII of the Illinois Constitution."

John Bambenek, a Republican candidate for state senate in the 52nd District, earlier this month joined a lawsuit filed in Champaign County against the Illinois State Board of Elections seeking to invalidate the ballot question, saying it’s deceptive and inaccurate.

“I get that Madigan and his Chicago friends want to stick it to us, but could they do us the courtesy of doing it in a way we can understand,” Bambenek said. “This ballot question and the amendment itself are incomprehensible gibberish.”

No Need to Put This in Constitution

The Illinois League of Women Voters opposes the amendment, saying the three-fifths majority vote requirement removes control from a majority and gives it to a minority. The organization also says the requirement does not belong in the state constitution.

“The Illinois Constitution is not the place for a provision that is this specific to a single issue and to one remedy for a larger problem,” the organization writes on its website. “If the legislature determines this needs to be done, a statute which can be modified more easily is the appropriate course to take.”

The Center for Tax and Budget Accountability opposes the amendment, saying it’s a misguided attempt to address the state’s pension problems but, most important, does nothing to reduce Illinois’ multi-billion-dollar unfunded pension liability.

Amanda Kass, a pension expert with the center, said it’s also impossible to know the full implications of the amendment until after it’s in place.

“There’s no reason this constitutional amendment can’t be part of state statute,” she said, urging voters to read the various analyses of the proposal that can be found online, including one she wrote for the center.

“But also ask themselves what’s the fundamental purpose of a constitutional amendment – What’s the purpose of the constitution, and is it appropriate to have a provision in the constitution about pension benefit increases?” she asks.

Ann Lousin, a law professor at the John Marshall Law School in Chicago and an expert on the Illinois constitution, described the amendment as “catastrophic,” noting that it is “very long and includes a number of  new concepts and terms which have not been interpreted by anyone.”

Certain to Inspire Lawsuits

She also noted that it probably would lead to an onslaught of lawsuits and that it would require a new level of bureaucracy “to monitor, referee and record countless votes, meetings and issues” for 7,000 governmental entities across the state.

“… (T)his proposed constitutional amendment does nothing for the state’s pension-funding problem,” she wrote. “However, it creates many new problems and, if approved, would, in my opinion, be a catastrophe for Illinois.”

Cohen of the Liberty Justice Center said the amendment presents a conundrum for voters.

“If you support the amendment, you’re kind of furthering this fallacy that it would actually mean something. But opposing it sends the signal to local decision-makers who already are spending beyond what the taxpayers can afford to just spend more,” she said.

“Really, the bottom line is it’s not worthy of the constitution, and we need to stand up and say this is fake reform and we simply can’t support it.”

Illinois Watchdog covers the Illinois General Assembly and state government and is sponsored by the Franklin Center for Government & Public Integrity. Contact Jayette Bolinski at jayette.bolinski@franklincenterhq.org. Find Illinois Watchdog on Facebook and follow its journalism on Twitter @ilwatchdog.

This post is published on all Patches in the suburban Chicago network. Have an opinion on this constitutional amendment? Share your views with readers throughout the Chicago area.

Pro Life Crusader + November 01, 2012 at 03:10 PM
Jeff here's part of one of your comments and you are so wrong!! Jeff says, You still fail to recognize that your pension is something the majority of us do not have and you are not entitled to it - you do nothing the rest of us do not do day in and day out and in many cases you do less Do you think Police and Fire fall in that category from your comment? Believe me it's a "NO"
Ernie Knight November 01, 2012 at 04:22 PM
Yeah, Gerard except the parasites are the corrupt politicians, not the line level public employees Municipalities in the '90s lobbied for and got passed legislation that allowed them to greatly DELAY payments into pension funds. That required a ramped up schedule of payment. Now that those payments are due, they are claiming the system is unsustainable. The system was NOT unsustainable until corrupt politicians abused it.
Jeff November 01, 2012 at 04:49 PM
Notice I said many and not all - this was by design, nice try though. If you put your life on the line like military, police or fire I believe certain concessions can and should be made for that sacrifice and the risk. I believe that is why Scott Walker did what he did in Wisconsin and I think most private working class individuals would agree with that approach. Military aside as that is a different animal, Fire and Police are a very, very small component of this public pension debacle. An city/state accountant, a park manager, a teacher, etc. do not deserve nor are the entitled to the same treatment. I would also add that depending on your location (South Side of Chicago vs. Oakbrook) I believe more equitable annual compensation would also work instead of a pension package if funds were tight and communities couldn't afford pension arrangements. If you offer me 100K to be a cop in Oakbrook with no pension just show me where to sign. The government spends money like its someone elses and not their own and that is the problem - each dollar should be respected and intelligent compensation packages implemented across the board.
BUTCH November 01, 2012 at 11:03 PM
BIll I November 02, 2012 at 12:08 AM
There are companies out there today, General Electric, Boeing etc who still offer a defined benefit plan. I have no issues whatsoever with switching over public sector employees to a 401k style plan. But that would need to occur at the inception of employment where they could benefit the same way as those in the private sector by dollar cost averaging over a career. We will see in court, but short of that is in my opinion a violation our Constitution. It's also worth noting a two tier system is in place for those starting work today. "it is also not guaranteed." One little detail Jeff. When a pensioner dies so does the benefit. Not quite the flexibility of a 401K which becomes part of ones estate. "You still fail to recognize that your pension is something the majority of us do not have and you are not entitled to it - you do nothing the rest of us do not do day in and day out and in many cases you do less." As I was saying Jeff, it's comments like this that show your bias and unworthy of any more of my time beyond this response. "The costs of these plans put undue burden on the private, working class individuals." I feel the same way about Social Security. Don't much care the Gov't spent the money elsewhere and in a jam. "Insulting me is your protection against the lack of a platform to stand on in this debate but if you ever want to compare IQ's I am always available.' I just did. But once again in a very non insulting way. Good luck Jeff
Pro Life Crusader + November 02, 2012 at 01:36 AM
ag in the case of a pension for a Police or Fireman , when they die the wife still collects the full pension unless she remarries.
Pro Life Crusader + November 02, 2012 at 01:58 AM
Edward you have no clue about pension plans. It was clearly the responsibility of the Town or Cities to place taxes collected into the plans, but neglected to do so and now they are on the hook to make up the difference . Also they borrowed against the plans and failed to put the money back. Watch your taxes go up now. Plus it's up to the Illinois Dept. of Insurance to enforce that Towns/Cities are placing money into the funds.
BIll I November 02, 2012 at 03:19 AM
Pro Life, Never heard of anyone collecting a full pension when a spouse passes. I know the railroad retirement system has a provision for the spouse thats pretty favorable. All ive seen or read for others is a 50% payout at best. What happens if your not married and die? Thanks for the correction and educating me.
Pro Life Crusader + November 02, 2012 at 03:25 AM
If not married and die, the pension dies too. No problem.
Jeff November 02, 2012 at 10:51 AM
Private companies that can make ends meet have every right to offer pensions to their employees if they choose. If they stay profitable more power to them but if they dont, well, they go bankrupt, have to let people go and have to eliminate the plans because they are not financially viable. Much different than the public pensions system we are faced with where they just go out and take more money that doesn't belong to them. Many cannot retire on 401Ks even at 67 which still is a much later retirement than most all pensioners. My parents were just told they would run out of money at 85 after both having life long careers in the medical field. I guess I would rather not place the burden of having to care for me financially while I am alive on my children than leaving them with something when I am dead. Of course my chidlren will get my assets (home, etc.) and nothing is stopping any public employee from contribution to an IRA last time I checked or any other tax deferred savings plan if they are concerned about how much they will be leaving their children. Guess what, Social Security, which pays out a small fraction of what a pension pays out, ends when you die as well. They will actually adjust the benefits of Social Security to keep the program from going bankrupt, what do they do if they cannot meet pension payouts? Most of us do not count on Social Security either - there are no guarantees. Trying to act intelligent and insult others isn't a game your good at.
Jeff November 02, 2012 at 10:56 AM
The more you comment, the worse it gets. Proof positive it isn't necessarily the best and brightest among us collecting pensions but rather the opposite which just adds fuel to the fire.
Kerry November 02, 2012 at 01:13 PM
You are wrong. You just did not pay attention.
Jim R November 02, 2012 at 01:45 PM
There has been a very long intelligent discussion among many of us except for one bizarre exception. Bottom line is there are 2 groups who feel they are being used unfairly, those who want their pensions with no modification and those who are only paying taxes for something that cannot be afforded. The only fair solution is to continue with pensions but to modify them. The absurdly high pensions, anything over 100,000 needs to be brought down immediately. Those below 100,000 need to be adjusted downward but as 40,000 is approached reductions should be decreased with nothing below 30,000 receiving no deductions. Medical insurance will need to be partially paid by the retiree with a progressive payment with those making a larger pension paying more. Retirement ages need to be raised across the board, with somewhat earlier pensions for police and firement if they are not able to perform their work. Even in the latter case I think fireman's earliest retirement should be 55 and police 60 without a penalty if there is no other work they can be assigned. If they can be assigned other work, they will have to accept it. TO BE CONTINUED>
Jim R November 02, 2012 at 01:49 PM
CONTINUATION- There are desk jobs and community assignments and other government jobs that can be performed at a later age which should be done by older policeman and fireman and not new hires outside of these fields. Pensioners will not like this change, but they must keep in mind that taxpayers are picking up a burden they can no longer afford. Without such changes there will be a bankruptcy and nobody will win. Future workers may be taken from less qualified workers after a bankrupcy at much lower salaries and possibly no pensions. All need to agree that the first step is to get rid of much of our government that has helped to make this mess. Getting rid of Madigan and Quinn would be a good start by voting them out of office or setting up a recall procedure.
Pro Life Crusader + November 02, 2012 at 02:18 PM
Jim R one problemI see why 60 for Police and 55 for Fire?
Jack November 02, 2012 at 02:50 PM
Obviously everyone here is entitled to their opinion. If you don't believe teachers and other public employees are worthy of the current pension system, by all means express that opinion. However, there are certain basic FACTS that many of us need to be reminded of: 1. Teachers DO NOT pay into Social Security and ARE NOT ELIGIBLE to recieve Social Security. (the 6.2% SS payment from "after-school" jobs is also lost to them) 2. Roughly 9.2% of a teacher's paycheck IS automatically deducted and paid to TRS. (Teacher Retirement System) [this means that Pro-Life Crusader + is totally wrong that local school boards have somehow failed to pay. However he/she is correct in that local school boards DO control payroll of higher level administrators who make 6 figures and thus get much higher pensions] 3. Many teachers are regular people who make a idealistic career choice in their early twenties and have not real understanding of how this TRS system works. Many are suprised to find out that they have NO CHOICE about joining unions. Even if a teacher chooses to NOT BE PART OF THEIR LOCAL UNION, they must still PAY DUES to both the NEA and the IEA, and CANNOT Bargain with management for their OWN WAGES. (in other words, blame the system but don't villify the teachers!)
Pro Life Crusader + November 02, 2012 at 03:01 PM
Jack if you read very carefully, I was speaking about Police and Fire pension plans in which the Towns/Cities short changed their pension plans and now the tax payeers are on the hook for it.
Jack November 02, 2012 at 03:01 PM
Sorry, but I have a few more points to make: 4. Teachers also pay local property taxes just like everyone else. [What I think many of you SHOULD be discussing is whether or not teachers make enough money to LIVE in the school districts they work in. Trust me, that is not always the case. In addition, check out the teacher parking lot versus the student one. You'll find far nicer automobiles in the student spots than the teacher lot. (more opinion than fact I'll grant you, but my experience. This may not mean much to you but I think it is worth mentioning when so many here seem to be suggesting that teachers are living this ostentatious lifestyle at taxpayer expense) 5. There is ONE MAJOR difference between teachers and those who work in the private sector. In business, your boss is NOT your customers. Yes, it is important to keep your customers happy, but ultimately your boss is someone either chosen by ownership or the owner him/herself. A teacher's boss is a DEMOCRATICALLY ELECTED RESIDENT. There are NO QUALIFICATIONS for local school board members WHO MAKE decisions. AND THEY ARE ELECTED BY A VERY SMALL MINORITY OF VOTERS. These board members have been known to hold someone's job over their heads for such capricious reasons as their son didn't make the freshman baseball team, their daughter got a suspension for bullying someone on Twitter, and so on and so forth.
Jim R November 02, 2012 at 03:09 PM
Pro Life Crusader + There are many more jobs in police work that an older policeman can perform than an older fireman. There are traffice patrol on foot and a car. They can still patrol neighborhoods and do not need to run after a suspect and they can perform investigations and do more of the paper work for other officers. It is easier for a 60 year old policeman to keep a criminal at bay then it is for a firemen to keep a fire at bay with a firehose. But even here I provided a qualifier "...earliest retirement should be 55 and police 60 without a penalty if there is no other work they can be assigned."
Pro Life Crusader + November 02, 2012 at 03:20 PM
Jim R what you fail to see is that the Towns/Cities would then have to create more positions at a cost to the tax payeers and on top of that hire more Police to fill the street patrol left vacant by putting the older officers into other positions. Sorry from my experience your plan would not work.
Jim R November 02, 2012 at 03:28 PM
Yes I did consider that issue which why I said: "There are desk jobs and community assignments and other government jobs that can be performed at a later age which should be done by older policeman and fireman and not new hires outside of these fields." The idea is these positions would be replaced by current workers and replacing others. Additionally I was referring to those who would have retired and replaced anyway.
Jim R November 02, 2012 at 03:42 PM
"4. Teachers also pay local property taxes just like everyone else. [What I think many of you SHOULD be discussing is whether or not teachers make enough money to LIVE in the school districts they work in. " This is true of many of us and really has no relevance. Teachers in some areas are living at a much higher life style in some areas they teach also, but would you hold that relevant. "5. There is ONE MAJOR difference between teachers and those who work in the private sector. In business, your boss is NOT your customers. " I do not see this as relevant as a person's boss may be just as capricious as you suggest, but being out of the public sector there is even fewer options for the employee since going to the public does not have much affect.
Pro Life Crusader + November 02, 2012 at 03:45 PM
Jim R it still wouldn't work and isn't cost effective. Towns/Cities encourage the older Police/Fire to retire early to save money. They want to get rid of the higher salaries and hire new with the lower base salary which takes years to top out. Plus Town/Cities are all trimming desk jobs and inside positions to keep more men on the street.
Jeff November 02, 2012 at 04:15 PM
To make the math simple given your comparison of SS vs. Pension, assuming someone working in the private workforce makes 100K and they pay 5% into Social Security (actually more like 6%+) they would receive in 2012 if they retired approximately 10K annually. Take the same 100K as a teacher and they contribute 10% of their salary into their pension plan - the payout for retirees averages 65K annually (as of 2010 - not sure what it is today - source illinoispolicy.org) subsidized by the tax payer. If private workforce individuals were asked to pay 10% into social security and assuming the benefit went up commensurately they could expect to collect a maximum of 20K annually. Do not compare SS to your pension because they are not even close to being comparable in terms of benefit - SS only pays out what it takes in vs. pension which pays out more than it takes in and if it cannot make that payment they take make more to pay for it. Lastly, your comment about teachers are not responsible for the actions of the union – seriously? Look at the strikes and all the teachers standing around talking about the children when what they really want is more money, more benefit, less performance measures. Do they not take a vote on striking or does the union rep just decide to do what he/she wants to do? Do teachers not elect union delegates? Teachers are the system and if they were as idealistic as you say they would be more concerned with doing what is right vs. trying to get more.
Jeff November 02, 2012 at 04:32 PM
Regarding property taxes - yes we all pay property taxes. Assume I pay $8000 in property taxes, you pay $8000 in property taxes and they continue going up like they have been. When I retire I am out $8K annually for the duration I live here (20yrs - $160K), when you retire the net result might be that you paid nothing since such a large portion applies to pensions. You get this money back, its like an investment account for you while it is a hardship for the rest of us.
Jack November 02, 2012 at 04:52 PM
Jeff: I am not trying to say that all teachers are always powerless in the face of union leadership. I am trying to explain that college grads who enter into a teaching career have no clue what it is all about. Also, as far as the NEA and the IEA (national teacher union and IL teacher union respectively) regular every-day teachers have virtually no influence or effective way to effect decisions of these unions. Trust me, I am in NO WAY defending these large scale national or state entities. 95% of a teacher's union dues go to these unions with or without the teacher's consent. In terms of electing union officials: Its is a joke. There is a big difference between a local teachers' union and these large powerful unions. I recognize that many conservative minded people don't believe that public employees should be allowed to collectively bargain. I also recognize that many people don't believe that unions should exist at all. I will not try to change anyone's opinions on that matter at this time. I'm also not trying to cast teachers as plaster saints; but making teachers out to be parasites and villians is irresponsible and misleading.I fully understand how angry and helpless people can feel when they see the amount of taxes they pay in property, IL income, Federal income, SS, and Medicare. But remember: we pay that stuff too. (except SS) And I'm NOT trying to say that TRS and SS are anywhere near the same. I recognize that TRS has far higher payouts, I'm not naive.
Juvenal November 02, 2012 at 05:07 PM
The actual SS contribution for a private worker is 10.4 % (and is usually 12.4% exept the last two years) because the employer is required to pay another 6.2% of your salary that you never see. Local school districts pay less than 1% into TRS for their employees, so these dumbass school boards can overpay their teachers without feeling the costs of the pensions -- trying to fix this doomed pension reform earlier this year because of course property taxes will go up when schools have to behave like every other employer. No one blames teachers but the teachers unions are so unyielding when it comes to any solution to the pension crisis (other than "raise taxes so we get ours") that they make the tea party look as accomodating as neville Chamberlain. Their solution will never work, you could never raise IL taxes enough to pay all these pensions because as the business climate here worsens and taxes skyrocket all the jobs and people will flee to other states, so the tax base will shrink so fast you could never make it up with higher rates and fees, which only promote more flight, etc....
Jack November 02, 2012 at 06:23 PM
Jeff: An interesting way of looking at the issue of local property taxes. I see the logic of your argument, but I still don't see what we are really arguing. At the end of the day, do you oppose just the current teacher pension system? Or do you oppose current teacher pay as well? I want to be clear on this. (some of the following facts are from the top of my head so correct me if anyone sees something out of line): The TRS system as it was designed in the 1970's was that teachers pay a certain percentage (approx. 9.2% today) from their check to the pension. In return, the state government would match the amount that teachers pay with a like amount from IL income tax. Teachers would then earn somewhere in the neighborhood of 80% of their salary once they retire. (No one can doubt that this is a very attractive pension plan!) Lots of questions arise from this. Why would the state government back in the 1970's do this? More importantly, why didn't more people react with outrage back then? Is this pension policy truly unacceptable? Or is the conservative attack on teacher pensions more of a symptom of the recent econmic recession? The "pension crisis" that everyone is talking about right now has arisen because the state government for years DID NOT contribute its required amount. Instead, they chose to ignore these payments in order to make up for budget shortfalls in other areas. I'll go on later, first I need to know if we disagree on this.
Paul L. November 02, 2012 at 06:34 PM
Here's a link....enjoy! http://usnews.nbcnews.com/_news/2012/11/02/14881090-teachers-unions-in-ohio-try-to-get-educators-elected-to-state-offices?lite
DG Guy November 02, 2012 at 09:51 PM
I don't think it's fair calling this a "conservative attack on teacher pensions". The system has blown up and in Illinois liberals and conservatives are coming to the same conclusions. You're right that the state did not contribute for several years. They took a "pension holiday". The unions. for some reason, signed off on this. Even if they had not taken that holiday, there would be a problem (albeit a smaller one.) The contributions that both parties paid into the system over the past 40 years were not sufficient to fund payouts. Actuaries typically decide how much needs to be contributed to a pension to keep it going. Instead of letting actuaries decide in Illinois, politicians just dreamed up a percentage to contribute. It was not nearly enough.


More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something