Yes You Can, part 3

Wednesday, May 5, 2010

We've written twice recently on the legality of reducing pension benefits that current state employees earn going forward. Legislative leaders who pretend that isn't possible had better hustle up their own remedy, and fast: Joshua Rauh, a public finance expert at Northwestern University's Kellogg School, calculates that Illinois' pension plans could run out of money as early as … 2018.

The more citizens realize that curbing future benefits is a necessity, the less many lawmakers want to hear about it. Official Springfield, full of people accruing public pensions, would rather delay and deny: Their notion of pension reform has started and stopped with less generous payouts in future decades to people who haven't yet been hired. The more than $2 billion a year that could be saved right now with lower benefits for current workers evidently is money the lawmakers think Illinois can live without.

Gov. Pat Quinn, House Speaker Michael Madigan, Senate President John Cullerton: If this is the legacy you want, keep delaying reforms that would cut costs today. But the denying just got more difficult. On Tuesday, the number of world-class Chicago law firms that say this reform is constitutional grew to four.

The background: Democrats who run Springfield long have said the state constitution guarantees workers the pension scheme that was in place on the first day of their careers. So the Dems were grumpy when Sidley Austin lawyers researched that point for the Commercial Club of Chicago and concluded: "(S)tatutory pension rights are not frozen in place for all eternity and may be amended to alter the parties' relationship on a prospective basis — meaning to alter benefits to be earned in the future."

But the Dems grew warm and fuzzy again when two former judges, Abner Mikva and Gino DiVito, disagreed with Sidley's opinion. And maybe the judges are right. But the crowd of smart thinkers who say they're wrong is growing. Three more heater firms now concur with Sidley: Jenner & Block, Mayer Brown and Sonnenschein Nath & Rosenthal. Read the agreed-upon thinking at chicagotribune.com/pension. (One twist: It appears that future benefits can be trimmed for all employees except for the relatively small number of judges and state officials whose salaries and tenures are constitutionally protected.)

For lack of repairs, Illinois' pension crisis worsens. Northwestern's Rauh warns that already-promised benefits threaten to empty the pension funds of seven states before 2020: Oklahoma, Louisiana, Illinois, New Jersey, Connecticut, Arkansas and West Virginia.

Yet lawmakers seem interested only in preserving unaffordable pension benefits of employees. Which makes us wonder if legislative leaders are running from this fight not because they think curbing benefits is illegal, but because they fear it's as legal as can be.