Illinois Justices Press State's Lawyer On Pension Overhaul
From the Associated Press
Illinois Supreme Court justices asked the state's lawyer to explain Wednesday how the government can seek extraordinary power to reduce public pension benefits in the face of a fiscal crisis when the government itself is culpable for the financial mess.
Justice Robert Thomas peppered solicitor general Carolyn Shapiro during oral arguments over the constitutionality of a 2013 law that cuts retirement benefits in a 30-year plan to slay a $111 billion deficit.
State employees and retirees challenged it, arguing that the state constitution prohibits action to "impair or diminish" the benefits of the contractual pension agreement.
The state counters that it can resort to "police powers" to trump the constitution in moments of economic peril. The peril, they say, can largely be traced to the recession of 2008, which battered the value of the pensions' portfolios and caused other problems.
But until questioned about it, Shapiro didn't mention that for decades, governors and legislators have given short-shrift to annual contribution obligations — including as recently as 10 years ago, well after the crisis was widely recognized, by skipping $2.3 billion in payments.
"If the court holds that the state can invoke its police powers to violate core constitutional guarantees to respond to an emergency that at least arguably the state itself created, then aren't we giving the state the power to modify its contractual obligations whenever it wants?" Thomas asked Shapiro. "For instance, the state could simply fail to fund the pension systems and then claim an emergency."
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From the Associated Press
Illinois Supreme Court justices asked the state's lawyer to explain Wednesday how the government can seek extraordinary power to reduce public pension benefits in the face of a fiscal crisis when the government itself is culpable for the financial mess.
Justice Robert Thomas peppered solicitor general Carolyn Shapiro during oral arguments over the constitutionality of a 2013 law that cuts retirement benefits in a 30-year plan to slay a $111 billion deficit.
State employees and retirees challenged it, arguing that the state constitution prohibits action to "impair or diminish" the benefits of the contractual pension agreement.
The state counters that it can resort to "police powers" to trump the constitution in moments of economic peril. The peril, they say, can largely be traced to the recession of 2008, which battered the value of the pensions' portfolios and caused other problems.
But until questioned about it, Shapiro didn't mention that for decades, governors and legislators have given short-shrift to annual contribution obligations — including as recently as 10 years ago, well after the crisis was widely recognized, by skipping $2.3 billion in payments.
"If the court holds that the state can invoke its police powers to violate core constitutional guarantees to respond to an emergency that at least arguably the state itself created, then aren't we giving the state the power to modify its contractual obligations whenever it wants?" Thomas asked Shapiro. "For instance, the state could simply fail to fund the pension systems and then claim an emergency."
Read more in our daily News Update...