Chicago Sun-Times
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Speaker Madigan scolds unions for "no cooperation" on pensions, state's fiscal plight

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SPRINGFIELD-Scolding his union allies, House Speaker Michael Madigan Wednesday rejected a push by organized labor for a "summit" to talk about pension reform, saying the unions' request was "not timely."

The biting, two-page letter to Illinois AFL-CIO President Michael Carrigan carried a stern tone and accused labor of offering "no cooperation" on the pension front or on other financial pressures facing the state.

The timing of the Madigan letter coincides with last week's downgrade of the state's credit rating so Illinois now is considered by Standard & Poor's to be the least credit-worthy state in the country. That action factored into Gov. Pat Quinn's decision Wednesday to pull the plug on a $500 million bond issue.

In his open letter, Madigan jabbed Carrigan and the labor leader's call for a Feb. 11 pension summit with Quinn and legislative leaders and took particular umbrage at the unions' notion that "pension reforms faltered because the concerns of labor were not considered."

"In my view, the positions of organized labor were taken into account during the 2012 legislative session. I recall no fewer than eight high-level meetings that took place with labor, legislative leaders and the governor," wrote Madigan, who also is chairman of the Democratic Party of Illinois.

"At that time, I felt there was little willingness from representatives of labor to draft a comprehensive, common-sense solution," he said.

Madigan went on to point out that government workers in Illinois have the fourth highest state worker pay among the 12 most populous states, and that public employees here pay "significantly less for their insurance premiums than those in the private sector."

"It is time for labor to come to the table with an honest proposal that recognizes the state's serious fiscal condition and puts government employees on par with those in the private sector relative to a benefits package," Madigan wrote.

In an understated rebuttal to the speaker, Carrigan expressed "regrets" at Madigan's unwillingness to participate in a pension summit and pointed to a union plan already on the table that would hike employee pension contributions, cut corporate tax breaks and guarantee no future shortchanging by the state in required contributions to the pension systems. That plan also had the potential to avert a protracted legal battle, he said.

Carrigan's harshest language for the speaker was directed at his assault on the salaries and benefits Illinois' public workers now get.

"We were particularly surprised and disappointed that the speaker singled out state employees from our coalition--which includes teachers, police, fire fighters, nurses, caregivers and many others--and decried their efforts to maintain decent wages and affordable health care," Carrigan said.

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CULLERTON’S PUBLIC PENSION HOBSON’S CHOICE IS UNCONSTITUTIONAL.

An Illinois appeals court has previously held that Cullerton’s “Public Pension Hobson’s Choice” idea is illegal:

“As the Illinois Appellate Court explained in a similar context, ‘the [government] cannot whipsaw citizens into ‘voluntarily’ choosing one of two means by which they will be divested of an existing property interest.’”

See Boonstra v. City of Chicago, 214 Ill. App. 3d 379, 387, 574 N.E.2d 689, 695 [1st Dist. 1991]. Link:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1774163

An interesting article on Cullerton’s Unconstitutional Hobson’s Choice:

“The Choice Between Two Unconstitutional Options is Not Constitutional.”
http://businesspublicpolicy.com/?p=2327)

Politicians will go to great lengths to lower the tax and debt burden of their constituents . . . including the breach of public sector contractual obligations. Would it not be simpler to just pay our public debts? Consider facilitating this through the issuance of federally tax-subsidized public pension funding bonds, similar to Build America Bonds. Consider new, dedicated public pension funding sources. Consider the prospective, legal pension reforms adopted by other state legislatures.

Support public pension contractual rights and the rule of law in the United States. Friend Save Pera Cola on Facebook! Contribute to the cause at saveperacola.com!

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