"Legislators Propose Innovative New Legislation on State Pension Reform"

Title: SUAA Mini Briefing:"Legislators...
Date: December 5, 2012
Link:http://tinyurl.com/a4mbt6b

HB6258 was introduced this morning with a 10:00 a.m. press conference led by Representatives Nekritz (D-57) and Biss (D-17). These two Representatives were not alone in the unveiling of yet another but possibly more comprehensive bill to address pension reform. Others standing up before the audience were Representatives David Harris (R-66), Chris Nybo (Lame Duck R-41), Kelly Burke (D-36), Kelly Cassidy (D-14), William Cunningham (D-35), Robyn Gabel (D-18), Ann Williams (D-11), Linda Chapa LaVia (D-83), William Davis (D-30), Sara Feignholtz (D-12), Jehan Gordon (D-92), Greg Harris (D-13), Elizabeth Hernandez (D-24), Charles Krezwick (Lame Duck D-37), Karen May (Lame Duck D-58), Deborah Mell (D-40), Cynthia Soto (D-4) and Michael Zalewski (D-21).

From the first it was made clear that this is not a perfect piece of legislation however it offers new ideas and it is a new start for continuing the pension reform talks. The leaders complimented themselves on being bold and pragmatic. Everyone in four of the five state funded pension systems would have to sacrifice; judges are omitted. In return the benefits would be sustainable and affordable. However, there is no actuarial support at this time.

The bill will be refined over the next month - everyone's input is welcomed.

It is believed that more Republicans will become co-sponsors. The interest for some in the audience was who was not in appearance to show support of this legislation. That too could come over the course of the next month.

The most obvious question that provided a bit of a stumble and with no clarification was the COLA on the first $25,000 (or $20,000). However, the answer seems to be that the COLA will be compounded. Therefore, on the first year COLA would be $750; the second year would be 3% of $25,750 or $772.50; third year would be $26,522.50 or $795.68 additional and so on.

The best part and most notable of this new legislation is (bravo for the Representatives recognizing) the omittance of the choice between COLA and access to health insurance.

Concerns are how the higher pension contributions will change the defined benefit amounts upon retirement. What is the actual impact on reducing the state's unfunded liability?

Rep. Nekritz believes the "plan . . . will survive a legal challenge because it contains a guarantee the state will make its obligated pension payments in the future. The major reason for the current pension debt is the state's failure to make payments into the system."

HB 6258can be found (all 228 pages) on the General Assembly's website. There will be several analysis's coming over the next month.

In addition you can review the following for certain focuses of the bill:

Overview: House Bill 6258 aims to end the years-long quagmire over pension reform at the state Capitol by combining the best parts of previous reform plans with some new ideas. The bill puts in place necessary limits on pensions to preserve the health of the systems moving forward, but it also provides historic new protections to help ensure the state does not again shirk its funding obligations.

Tier 1 Members (state employees in the current state pension systems)

Cost-of-living adjustments would apply only to the first $25,000 of the employees’ pension
o That limit is set at the first $20,000 for employees eligible for Social Security
COLAs will take effect as of the effective date of the bill when the employee turns 67 or five years after they retire, whichever comes first
o This applies to all employees and retirees who are currently receiving COLAs
Retirement age increases as of the effective date of the bill by:
o No increase for employees age 46 and older
o One year for employees age 40 to 45
o Three years for employees age 35 to 39
o Five years for employees age 34 and younger

Employees would be required to contribute more toward their pensions by:
o One percent for the first fiscal year the legislation is in effect (that would be Fiscal Year 2014 at the earliest)
o Two percent for each year thereafter

Pensionable salary – the amount of salary that counts toward a pension – is limited to the higher of the Social Security wage base or the participant’s salary when the legislation becomes law

Tier 2 Members (state employees in the alternative system created in 2010)

All new employees in the Teachers Retirement System and State University Retirement System would be in a cash balance plan
o Employees and employers both contribute to the pension cost and both have protections on benefits paid and costs accrued – a combination of the best pieces of defined benefit and defined contribution plans

TRS and SURS employees hired before the effective date this bill would become law can choose to remain in Tier 2 or join the cash balance plan

COLAs for General Assembly Retirement System members will match those of Tier 2 members in the other pension systems

Employer Contributions

Schools and colleges/universities will assume employer costs for benefits in the TRS and SURS systems now paid for by the state, with that responsibility shifting to them at a rate of 0.5 percent of payroll each year

TRS and SURS employers will pay the specific pension cost of any employee’s salary they increase, to prevent a school from increasing a superintendent’s salary and then having other schools share in the cost of paying that increase once they have the responsibility of paying the pension costs for their employees

Employer contributions will be on a 30-year level-funding plan to achieve 100 percent funding

Employer contributions will be enforced through court action or intercept of other state funds if payments are not made as required under the new funding plan

Revenue now being used to pay pension obligation debt will annually go to pay the broader pension deficit down once the pension obligation bonds are paid off
o This would mean $693.5 million per year going to pay off pension debt starting in Fiscal Year 2016, and $900 million per year starting FY 2020
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While the legislators are calling for action during the Lame Duck session in January, there has also been word that the newbie's will be the ones voting on any pension reform. Nothing is for certain. Being prepared is the best we all can do.

Both the House and the Senate have adjourned until 2013. The House is scheduled to be in on Thursday, January 3 through Tuesday, January 8 (including the weekend) with an additional date of Thursday, January 10.

Senate is scheduled for Wednesday, January 2 through Tuesday, January 8 (including the weekend).

Swearing-in ceremony of the 98th General Assembly will be at Noon on Wednesday, January 9.

The We Are One Illinois coalition is possibly planning Pension Preservation rallies for January 3 and 4 at the Capitol. More information to come.

The House and Senate calendars for the 98th General Assembly are posted on the SUAA website.
Click to see the House Calendar or Click to see the Senate Calendar

District and Springfield office information for all legislators is not available either and most likely will not be until late January or early February. Half of the Capitol is being remodeled thus making space more cramped.

Look for updates and responses to the newly presented legislation as it becomes available. If you have any comments or constructive ideas that could be shared to legislators regarding HB 6258 please either contact the sponsors of this bill or send them to linda@suaa.org.

SUAA's Legislative Steering Committee will also be taking a look at this legislation. There will be pension reform therefore it is important to make constructive contributions to the conversation.

SUAA will be working with the stakeholders throughout the Lame Duck session.
Make a daily habit of looking at the SUAA website for various articles of interest and updates on legislation.

Alerts will be forthcoming - as necessary. Dick Lockhart and Linda Brookhart will be following closely as January begins to unfold. John Carr will be available on a somewhat limited basis as he will be a new dad within the next few weeks.

For a well-rounded education on HB 6258 other reports can be found, of course, in newspapers, on the union websites, Illinois Policy Institute, Governor's website, Civic Federation, Civic Committee, Illinois State Chamber of Commerce, Capitol Fax blog, Illinois Channel and various other sites.

As we prepare for the holidays stay safe, stay happy, stay alert and most of all Stay Tuned!

"Bill Aims to End Long Impasse on Illinois' Most Critical Issue Before Legislature Adjourns" Press Conference in its entirety can be found at www.suaa.org

A Walk Around the Capital

 

SUAA Mini Briefing
November 27, 2012
Link: http://tinyurl.com/d73unzv

A Walk Around the Capitol

Veto Session began at Noon today with seemingly nothing on the agenda relating to pensions. The bustle is truly geared around gaming expansion, driver's licenses for undocumented immigrants, confidentiality of corporate tax returns, Mississippi River shut-down between Cairo and St. Louis, medical marijuana, budget spending issues and additional bonding to pay vendors.

Most likely all talk of Pension Reform will be held until the January Lame Duck Session (January 2nd through noon on January 9th, 2013) or possibly during the 98th General Assembly spring session. This is in all likelihood the best route to take because the number of votes required to pass a bill changes - veto session requires a bill that takes effect immediately a three-fifths vote to pass (71 in the House and 36 in the Senate). After January 1 the votes needed to pass drops to 60 votes in the House and 30 in the Senate.

New to the slate of bills that would affect SUAA/SURS is HB6252 - Pension CD-close State Systems sponsored by Rep. Andre Thapedi. (Retirees and those currently working are not included in this legislation.) (1) The bill provides a health insurance cost shift to new employees. (2) It also eliminates the eligibility for new employees to participate in SURS. Instead a tax sheltered annuity plan - 403(b) - would be established. (3) SURS-covered employers would be required to contribute 50% of the annual certified contribution in year 2014; in 2015 the employers would be required to pay 101% of the previous fiscal year's certified contribution or whichever is less. State would be responsible for the difference between the actual certified amount and the amount contributed by the employers. (4) The State's contribution to CIP (College Insurance Program) along with the CIP Continuing Appropriations Act is completely eliminated. Funding would fall upon employer and employee contributions and premium payment. Additionally this legislation effects TRIP in the same way.

All members are encouraged to weigh in on new or current legislation. Other pension bills which are still alive are: SB1673, HB6204, HB6209, HB6210 and SB3932. The possibility of additional pension legislation and health insurance are certain to come.

As time passes it could become the contention of at least certain legislators that a "one-size-fits-all" pension reform cannot function properly. However, since the identical aim seems to be at all systems there most likely will not be an attempt to alter any legislation to allow any custom fits.

Even though the Constitutional Amendment did fail it would be short-sighted to think that another amendment will not be forthcoming for the 2014 election. The next attempt will be of few words and to the point. The goal, of course, will be the repeal of the non-impairment clause in the Illinois Constitution (Article XIII).

Veto session will continue through Thursday of this week and again on Tuesday, Wednesday and Thursday of the first week in December (4, 5, and 6).

The Commission on Government Forecasting and Accountability (COGFA) has a Special Pension Briefing. This is receiving attention due to the $1Billion increase in required State pension contribution. See page 7 of the Report which is posted on the SUAA website.

Questions continue over health insurance; nothing new today to report. Medicare's open season continues until December 31.

VIDEO UPDATE Pension/SURS Town Hall: The Constitutional Amendment

A recording of yesterday's event.

This video is hosted on ustream.  We use their service because it's free; we apologize if there are commercial interruptions.

“The Constitutional Amendment question on the Nov. ballot—if passed—would probably eliminate the current Illinois Constitutional Clause protecting benefits from being diminished or impaired.”
--John Kindt

"Constitutional Amendment #49 creates very special problems for State Universities, and for those who are committed to their improvement…As we know, a Constitutional Amendment would last beyond our lifetime."
--Dick Lockhart

CA#49 Would Be "Catastrophic" Says Law Professor Ann Lousin

Title: Letter from Ann Lousin
Source: SUAA.org
Link: http://tinyurl.com/9gbw89x
Written: September 14, 2012

Dear Friends,

I have earlier characterized the proposed Constitutional Amendment that will be on the November 6 ballot as "catastrophic". Here is why: From my perspective as a Professor of Law at the John Marshall Law School since 1975, and as a member of the research staff during the 1970 Constitutional Convention, my conclusions are:

1. The Amendment is very long and includes a number of new concepts and terms which have not been interpreted by anyone.

2. The greatly increased volume of litigation would further burden our judicial system and cause uncertainty.

3. The three-fifths required for pension decisions for all local units of government, including all school districts, imposes an unnecessary mandate on them, and I do not see how compliance for 7,000 governmental entities could be recorded or provide any precedent value. This issue is so immense that a new bureaucracy would have to be hired to monitor, referee and record countless votes, meetings and issues.

4. There is a very adroitly constructed sentence in the Amendment which would allow the General Assembly to further restrict the ability to provide a "benefit increase", "emolument increase", or "beneficial determination". It is unclear what this portends.

5. Article XIII, Section 5 of our Constitution (adopted in 1970) had as its purpose the safeguarding of the pensions of public employees. The above underlined change being proposed by this Amendment appears to be an attempt to circumvent or abolish those protections. For example, it is possible that a cost-of-living adjustment could be eliminated if this Amendment passes. In conclusion, this proposed Constitutional Amendment does nothing for the State's pension-funding problem. However, it creates many new problems and, if approved, would, in my opinion, be a catastrophe for Illinois. It should be rejected by the voters of our State.

Ann Lousin

The Impairment Provision is Impaired by HCA #49

Author: Dick Lockhart
Source: SUAA.org
Link:  http://tinyurl.com/8cbbygq
Published:  June 5, 2012

Let us begin with Art. XIII, Sec. 5 of our Constitution.

“Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

Now examine the proposed Constitutional Amendment #49, that will be on the November 6 ballot. The Amendment is now around 1,000 words, but read the last paragraph:

“(d) Nothing in this Section shall prevent the passage or adoption of any law, ordinance, resolution, rule, policy or practice that further restricts the ability to provide a “benefit increase,” emolument increase,” or “beneficial determination” as those terms are used under this Section.” Although providing or increasing, a benefit would require a three-fifths vote of the governing body, like a school board or a City Council, restricting or eliminating a benefit can be done with a simple majority vote.

Of great concern – this Proposed Amendment appears to conflict with the existing “Impairment” provision cited above. Which would control? The accepted practice relating to statutory laws which conflict is that the last one acted upon by the Legislature controls. (See LRB Drafting Manual, page 198.) That being said, would not this Constitutional Amendment, if approved on November 6, have the effect of cancelling the protections set forth in Art. XIII, Sec. 5? In my opinion, that is its intent.

As we know, months ago, Constitutional Amendment #5 was introduced by Speaker Madigan. It was replaced by #49, much the same as #5, except (d), set forth above, was added. That very carefully crafted language was done by an astute law firm, not the Legislative Reference Bureau.

Constitutional Amendment #49 creates very special problems for State Universities, and for those who are committed to their improvement. That Amendment refers to the “governing body” of a unit of local government, and the context indicates that the “governing body” and the funding source are the same. However, for State Universities, a serious question is created. As we know, each State University has its powers set forth in the statutes, and each has its own appropriation, determined and approved annually by the General Assembly. Does that not make the General Assembly the “governing body” for each State University? If the General Assembly is not the governing body, who is? (Perhaps, another serious flaw in the Amendment?) If the General Assembly is to be the “governing body,” consider a situation where a University wants to retain the services of a faculty member doing valuable research. Does Constitutional Amendment #49 require such decisions, which may include a “pension benefit,” to go through some kind of legislative review, requiring a super-majority approval of the House and Senate? There are not answers to these questions, but it is very clear, procedures will change.

No doubt, in time, this would be sorted out, but how much time and effort would be wasted? How much damage to the State of Illinois would be caused by this ill-advised Amendment? As we know, a Constitutional Amendment would last beyond our lifetime. Also, in my opinion, this Amendment, if approved, will result in endless litigation, bringing extended delays and increased costs to all parties.
Also, does this amendment not have the effect of making Illinois less attractive and less competitive? Over time, what happens to the quality of our education and public service?

Conclusion

This Executive Committee has the responsibility to make the policy decisions, and provide for their implementation for the organization. Obviously, this referendum is an issue of monumental proportions for SUAA and its members, present and future. It requires strong leadership at every level. The election is only five months from today. What is your decision?

Benefits of a SUAA Membership Through Voice, Action, Mission and Visibility

Title: Benefits of SUAA Membership
Source: SUAA.org
Link: http://tinyurl.com/8wrq5lu

Being served by three Lobbyists and six staff members who provide assistance to all chapter leaders, all individual members and all Grassroots Lobbying efforts;

Receives education through "Mini Briefings" and presentations;  Calls to Action through Legislative Alerts;  unlimited access to SUAA website archives, Face Book and emailing;

Leading the charge to defeat the addition of Section 5.1 to Article XIII of the State Constitution - SUAA CA 49 Ballot Initiative;

Blocking the call for a Constitutional Convention;  and, blocking the call to Merge the five State-funded Pension Systems;

Testimony before the legislature in both House and Senate hearings - College Insurance Program - Constitutional Amendment - State Health Insurance - Pensions -Constitutional Convention - Merging Pension Systems - University Employee Tuition Waivers - the Health Insurance Contracts faux pas;

Provides relative, accurate information to legislators, legislative staff, governor's staff and other policymakers and committees;

Input on legislation sponsored by legislators;  opinions provided for legislative language; wrote language for health insurance bill, protecting those who are age 65 and Medicare ineligible and also protecting the SURS retirees health insurance Irrevocable Election.  Continues to protect those with lower incomes and pensions;

Monitoring of both the House and the Senate Hearings and Sessions of the General Assembly.  At least one lobbyist is at the Capitol every day of Session.  All legislative bills are followed through a Legislative Bill Tracking Service which also provides alerts;

Representation at Pension Workshops, Central Management Services State Health Insurance Meetings, Commission on Government Forecasting and Accountability Hearings and Meetings, Department of Health and Family Services; meetings with each member of the Governor's Pension Reform Committee; meetings with each Chambers' leadership both Majority and Minority.

Facilitates two coalitions -  Higher Education Legislative Coalition and the SERS/SURS Coalition;

Seat on the Illinois Retirement Security Initiative Advisory Board - Center for Tax and Budget Accountability;

Seat on the Illinois Channel Advisory Board bringing unedited, nonpartisan coverage of Illinois State Government and Public Affairs to 1,673,500 homes - including coverage of SUAA's Annual Meetings;

Voice on the Illinois Society of Association Executives Legislative Committee - on-going legislation affecting associations and reporting requirements including lobbying;

Voice on the State Universities Retirement System's Roundtable;

Non-voting member of the Illinois Education Legislative Caucus;

Representation on the State Universities Retirement System Member Advisory Committee - SURSMAC;

Statewide presentations to Civil Service local and annual Meetings; American Association of University Professors; Illinois Community College Faculty Association, University Faculty Senates, Illinois Education Legislative Caucus, SUAA Regional Meetings, SUAA Chapter Meetings, SURS Board of Trustee Meetings, campus benefit and in-service days;

Newspaper interviews regarding the State Health Insurance issue;

Supports women legislators through Conference on Women Legislators; supports the Latino Caucus Fall Event and the Black Caucus Events; supports new legislative member breakfasts, lunches, and receptions.

Continuing relationship with the State Universities Retirement System; annual Legislative Reception and Dinner with the legislative pension leadership among other opportunities;

Working with many organizations and unions to keep higher education a strong commodity for the State of Illinois.

These are the reasons to be a member of SUAA!  Be one of the many voices in Illinois! A voice in SUAA!

Does “Unlucky Article XIII” on Nov. Ballot Cheat Voters?

Author: John Kindt*

The Constitutional Amendment to Article XIII on the November ballot is cleverly drafted to concentrate more monetary power in the same Springfield legislative leaders who have de facto bankrupted the Illinois Treasury. With $83 billion in projected liabilities, Illinois has the nation’s largest state budget crisis.

This “Unlucky Article XIII Amendment” is crafted to strip local governments and voters of current decision-making prerogatives and transfer those decisions to Springfield. As such, it is lose-lose for the entire political spectrum of Illinois voters.

Among other subterfuges, the Article XIII Amendment overrules and destroys the Illinois Constitutional protection against eliminating or reducing earned benefits, such as pensions for state retirees who by state law cannot receive Social Security and, in many instances, cannot receive Medicare and Medicaid.

Furthermore, thousands of elderly retirees and current state employees were mandated by Illinois law to pay into Illinois retirement systems and then legally prohibited from having Social Security.

This Illinois Article XIII Amendment contains more words than the entire first 10 Amendments to the U.S. Constitution—the Bill of Rights. The obvious intent of the verbose Illinois Article XIII Amendment is to hide its true impacts from voters in a 700-word avalanche of unnecessary and deceptive words.

Marketing experts know that few voters will read beyond the benign first sentences and that voters will be inclined to vote “yes” in that benign spirit. While the voters may wish to vote to concentrate more monetary power in Springfield leadership, they should not be tricked into misdirecting their votes and eliminating their current Constitutional safeguards by the confusing 700 words in the Article XIII Amendment.

For example, hidden in the “last sentence” is the new Constitutional provision: “(d) Nothing in this Section shall prevent the passage or adoption of any law, ordinance, resolution, rule, policy or practice that further restricts the ability to provide a “benefit increase”, “emolument increase”, or “beneficial determination” as those terms are used under this Section.”

Thus, this new Article XIII Amendment overrules the current Constitutional safeguard known as the “non-impairment provision” in Article XIII, sec. 5, of the Illinois Constitution.

As confirmed by expert memoranda, for example, the State Universities Annuitants Association memoranda (at www.suaa.org, June 8, 2012), the new Article XIII Amendment was drafted outside normal processes—including the Springfield Legislative Reference Bureau.

Among other problems for local taxpayers, the language overriding the “non-impairment provision” was added at virtually the last minute as the “last sentence” hidden at the end of 700 words.

The legislative voting process obviously misled numerous Springfield legislators who voted to place the Article XIII Amendment on the November ballot—when the Amendment’s language had not been properly vetted.

The Article XIII Amendment has also been disguised with various monikers including “HCA49” and “HJRCA49,” and it was originally floated by Speaker Michael Madigan’s office as “Amendment 5.”

On the ballot certified in September by the State Board of Elections, none of these issues are even mentioned in the summary, the “Explanation of Amendment.” Instead there is an emphasized caveat in bold letters which arguably encourages voters to vote “yes” by beginning with the warning: “Note: The Failure To Vote This Ballot ….”

In contrast with the certified ballot’s bold print emphasis instructing the vote on the Article XIII Amendment, voters will have to play “hide-and-seek” to find and decipher the 700 words of the Article XIII Amendment—before they go to the polls. The entire 700 words are not even printed on the ballot.

After the November election, the public outrage will begin when all public employee organizations (such as teachers), budget reformers, good-government civic groups, and even misled Springfield legislators finally realize that Illinois voters were deceived into voting “yes” for the Article XIII Amendment.

By voting “yes” for the “Unlucky Article XIII Amendment,” the voters will have destroyed their current Illinois Constitutional protections and concentrated huge new budgetary powers in the same Springfield leadership which has caused the Illinois budgetary crisis.

  *With 3 earned graduate degrees in law, John Kindt has often testified as an academic before Congress/state legislatures regarding business and legal policy issues.

Amendment's Meaning Sparks Meaningful Debate

Author: Jim Dey
Publication: The News-Gazette
Link: http://tinyurl.com/983re62
Published: October 6, 2012

Today's column can be summed up in a few words, "Just because you're paranoid doesn't mean they're not out to get you." Or not.

Everyone knows our elected officials are desperate to solve Illinois' apocalyptic public pension woes and, at the same time, equally desperate to avoid political retribution from the voters for doing so.

So what better way to do so than to have the voters themselves approve the means by which the benefits of public employees or retirees are modified in a way that reduces, or even eliminates, the pension funds' $80 billion-plus unfunded liability.

Sure, it's black helicopter stuff, but this is Illinois, a place where the politicians don't play straight with the public for two days in a row.

Ever heard of Constitutional Amendment 49 to the Illinois Constitution? It's on the Nov. 6 ballot, and it will become law if it is approved by the supermajority of 60 percent of those voting on the question or a majority of those who cast a ballot for any office in that election.

The amendment purports to make it harder for state and local government to increase public sector pensions. It supposedly was driven by the propensity of some legislators, Chicago's Democratic House Speaker Michael Madigan to name one, to pass special legislation aimed at enhancing pension benefits of connected politicos.

Did you hear about the Madigan bill that allowed two teachers' union lobbyists, nonpublic jobs, to qualify for $100,000-plus annual public pensions by working one day each as a substitute teacher?

Backers say the proposed amendment is intended to make it more difficult to pull stunts like that by increasing the number of votes necessary to pass such legislation from a simple majority to a special two-thirds majority.

It's especially ironic that Madigan is the chief sponsor of the amendment to make it harder for people like Madigan to use the legislative process to pay off political friends with taxpayer dollars.

But some skeptics argue that the amendment's convoluted language is really a back door effort to override Article XIII, Section 5, of the Illinois Constitution, which provides that the pension benefits earned by state employees "shall not be diminished or impaired."

In other words, the Illinois Constitution states that once you earn it, no one can take it away.

It's the view of retired University of Illinois Professor John Kindt that Madigan & Co. are hiding behind the amendment's wall of words to provide the legal cover necessary to override the so-called "nonimpairment clause."

"It's a threat to all benefits," Kindt argues.

That may or may not be the case. Many do not share Kindt's interpretation.

UI economist J. Fred Giertz, who plans to vote against the amendment, said he's not concerned the proposed amendment would jeopardize the retirement benefits public employees have earned.

He acknowledged that "some people believe it's kind of a back door attempt to replace the nonimpairment clause."

"No one seems to be concerned about it within the university," Giertz said. "I think it's not a problem."

He opposes the amendment because it is sloppily drafted and fears it will have a confusing effect on local governments. But he speculated that he is in the minority.

"I think it's very likely to pass," he said.

This is technical, boring stuff. Indeed, readers may feel themselves nodding off, and that's if they haven't already stopped reading.

Here's the background.

Beset by pension woes and embarrassed by continued revelations over pension sweeteners for special groups of state employees or, even more outrageous, state pension benefits for non-state employees, legislators hatched the plan for Amendment 49 earlier this year.

Speaker Madigan filed the proposed amendment with the clerk of the Illinois House on April 9. Whatever Madigan really wants, he gets. So by May 3, both the Illinois House and Senate had signed off on the proposal by overwhelming margins.

The House vote was 113-0, with local Reps. Chapin Rose, Jason Barickman and Naomi Jakobsson voting yes. The vote in the Senate was 51-2. Area Sens. Dale Righter and Shane Cultra voted in favor while Champaign's Mike Frerichs provided one of the two no votes.

Rose said he supports the concept of requiring a two-third votes to approve pension increases in state and local government and believes that's what the amendment does.

"The clear reading of this is that it just affects future benefit increases," Rose said. "That's the way it was explained."

However, he has heard from critics and plans to meet with Kindt to listen to his interpretation. "I stand to be corrected," Rose said.

Barickman said he anticipates voting for the amendment and said it was prompted by a desire to "allow voters a direct opportunity to weigh in on some of the pension reform measures" considered in Springfield.

"My intent was certainly not to try to create a back door way to reduce already accrued benefits," he said.

Barickman emphasized that he is not providing a legal interpretation of the amendment's language, just describing its purported intent.

Sen. Frerichs attributed his no vote to the poor drafting of the amendment.

"It could have been a lot more simple and clear," he said.

The proposed amendment is so long that it will not be printed on ballots. Instead, voters will be provided the conventional explanation of its meaning and asked to vote yes or no.

Kindt suggested that the extraordinary length of the proposed amendment is no accident. He said it "contains more words than the entire first 10 amendments to the U.S. Constitution" and that the "obvious intent ... is to hide its true impact from voters in a 700-word avalanche of unnecessary and deceptive words."

Critics have focused on the amendment's final paragraph, which was added at the last minute of legislative review, as the game changer.

Here's what it states:

"Nothing in this section shall prevent the passage or adoption of any law, ordinance, resolution, rule, policy or practice that further restricts the ability to provide a 'benefit increase,' 'emolument increase,' or 'beneficial determination,' as those terms are used under this section."

For starters, what does "beneficial determination" mean? Isn't that another way of saying a determination of benefits?

But what about the entire paragraph?

Springfield lobbyist Dick Lockhart, in a memo sent to his clients, said he interprets it to mean the following: "Although providing or increasing a benefit would require a three-fifths vote of the governing body, like a school board or a city council, restricting or eliminating a benefit can be done with a simple majority vote."

That's the black helicopter interpretation — the conspiracy theory view of the amendment's real intent.

Of course, what the amendment really means can only be divined by the judicial branch of government. So the question of the amendment's meaning is open to debate until the courts make an interpretation.

There also is a conspiracy theory about the conspiracy theory. Noting public employee unions and various retiree groups oppose Amendment 49 because it will make it harder to win benefit increases, Rose said he wonders "if there is really something (to what the critics are saying) or are they trying to scare people into opposing it?"

This is a debate over legal definitions with no definitive answers — at least not until the amendment passes and the legal questions are addressed in court. But by then, it might — with emphasis on the word "might" — be too late.

Here's a link to the complete language, at the General Assembly's website.

Jim Dey, a member of The News-Gazette staff, can be reached by email at jdey@news-gazette.com or at 351-5369.

AFSCME: Vote NO on the Constitutional Amendment!

Title: Vote NO on the constitutional amendment!

Author: AFSCME Council 31

Publication: AFSCME Website

Link: http://www.afscme31.org/news?id=0431

A referendum at the top of this November's ballot could have disastrous implications for your retirement security.

When you vote on Nov. 6, before you get to the candidates, you will be asked to determine whether the Illinois State Constitution should be amended to make it more difficult to improve pension benefits for public employees.

AFSCME strongly recommends a NO vote on this constitutional amendment.

HJRCA 49 asks whether a 3/5 vote of the Illinois General Assembly should be required in order to improve any pension benefit for any public employee and whether a 3/5 vote of any local government body or school district should be required to approve any collective bargaining agreement that includes incentives or additional compensation increases beyond salary that enhance pensions.

AFSCME encourages all members to vote NO on this constitutional amendment.

HJRCA 49 is unfair because it:

• Is undemocratic--all other laws, ordinances, etc. can be enacted with a simple majority vote;
• Requires a 3/5 majority vote for improvements to pension benefits, but any reduction in pension benefits will still only require a simple majority;
• Could cause more labor disputes at the local government and school district level because even if the union and management reach agreement on a contract, a minority of a city council, county board or school district could block its implementation; and
• Will make it even more difficult to improve the very low Tier 2 benefit schedule that currently exists for employees hired after January 1, 2011.

HJRCA 49 was put on the ballot by politicians seeking to cover up their failure to adequately fund public pensions.

HJRCA 49 is backed by big business groups who want to create the impression that public employee pensions are too high.

Click below to download a flyer you can use to inform your co-workers, friends and family. Encourage everyone you know to vote NO on HJRCA 49.

Check Your Mail! Voter Guide Details Proposed Amendment

Illinois residents should be receiving the following in the mail.  Of note, the voter guide refers to "Proposed Amendment to add Section 5.1 to Article XIII of the Illinois Constitution".  This amendment has been refereed to using various monikers in the media (and on this blog).  Please be aware that all of the following are being used interchangeably, and they all refer to the same amendment:

• Amendment to add Section 5.1 to Article XIII of the Illinois Constitution
• Constitutional Amendment #49
• CA #49
• HJRCA49
• HCRCA0049

This content is also available on the vote.illinois.gov website, here: http://tinyurl.com/9uz344y.

Just remember that this will be the only constitutional amendment on the ballot in November.

Click on the images below to enlarge them for easier reading.

UIC UNITED: HJRCA49 Creates New Problems, Doesn't Address Current Problems

To:        Newspaper editors
From:    State Universities Annuitants Association (SUAA)
Re:        Proposed Constitutional Amendment 49

For Immediate Publication

On November 6, the citizens of Illinois will be asked to vote on a proposal to amend the State constitution. The changes wrought by this Constitutional Amendment 49 would affect every local government, every school district, every State university, and every community college.  (The cost to taxpayers for putting this issue on the ballot is at least $70 million.) If approved, it would have a profound and long-lasting effect.

The amendment will impose a mandate on every governmental unit in Illinois. It will require that every increase in a pension benefit must pass the governing body by a three-fifths vote.  This would be a departure from other governmental decisions which are normally made by majority vote.  In effect, this would allow a minority to control decisions affecting pension benefits.

What are some possible consequences?  We can anticipate many governmental meetings where absenteeism by elected officials could become a tactic to avoid decision-making.  Would local elections become more divisive and more partisan?  Could this result in governmental decisions being made by judges?

What about State universities, including the University of Illinois?  The amendment will give pension-benefit authority to the³ governing body.²  What is the governing body of a State university?  Is it the Board of Trustees or the General Assembly?  (Both the Illinois House and Senate have Higher Education oversight committees, and the House also has a Committee on Higher Education Appropriations).  If this amendment is approved, what effect would it have on the ability of State universities to attract and retain high quality personnel?  We believe the effect would be adverse.

Cryptic Language in the Amendment
Section (d) of the amendment states: ³ Nothing in this Section shall prevent the passage or adoption of any law, ordinance, resolution, rule, policy, or practice that further restricts the ability to provide a benefit increase, emolument increase, or beneficial determination as those terms are used under this Section.²  Would local governments be enabled to require more than a three-fifths vote to increase pension benefits?  Would governmental bodies be able to diminish existing benefits?

Note the words ³rule, policy, or practice.²  Those words have broad meanings and extend beyond the bounds of government.  Are they appropriate for a constitution?  Are they not invitations for the State to enter the private sector to determine the applicability of a ³policy² or a ³practice?²

The last sentence of Section (b) in the amendment reads:  ³An increase in salary or wage level, by itself, shall not constitute a ³benefit increase² unless that increase exceeds limitations provided by law.² Suppose there are no limitations?  This could lead to protracted litigation.

We have some very serious public pension issues in Illinois.  It would be more meaningful if this amendment dealt with them in a direct and rational way but it IS clear that it will create new issues which will likely produce costly and extended litigation.  For example:  this proposed amendment inserts some terminology that has no statutory or case law behind it: e.g. ³emolument increase,² ³benefit increase,² and ³beneficial determination.²

Conclusions
We believe that after you have read the proposed Constitutional Amendment 49, together with our comments, you will come to the conclusion that it should be rejected at the polls on November 6.  The basic reason is that it will create many new pension problems without dealing with any of the current ones.  A future amendment would be needed to correct the problems created by this current one and would cost taxpayers another $70+million.

Respectfully,

UIC UNITED, the UIC Chapter of the State Universities Annuitants Association (SUAA)
Contact persons:
Merrill Gassman, President
Brenda Russell, Publicity Director

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UIUC News: Illinois Amendment Would Eliminate Constitutional Protections

Title: Illinois Amendment Would Eliminate Constitutional Protections
Author: Phil Ciciora
Publication: UIUC News Bureau
Link: http://tinyurl.com/9klsdbv
Date Published: October 1, 2012

CHAMPAIGN, Ill. – A little-publicized amendment to the Illinois Constitution on this November’s ballot could have a big impact on the pensions and health care of state workers if Illinois voters approve it, a University of Illinois expert in legal policy says.

According to John Kindt, a professor emeritus of business and legal policy, Amendment 49 is a “cleverly crafted feat of legislative legerdemain” that’s designed to concentrate more money and power in the state capital.

“This is a potentially major change to the Illinois Constitution that has received very little publicity and has been the subject of almost no public discourse,” Kindt said. “In the interest of educating the public, we need to start talking about the consequences of Amendment 49, if voters pass it.”

Kindt, who has testified before Congress and state legislatures about business and legal policy issues, says Amendment 49 would overrule the protection clause in the Illinois Constitution that restricts eliminating or reducing earned benefits such as pensions for state workers and retirees.

Amendment 49 clocks in at more than 700 words, making it longer than the entire first 10 amendments to the U.S. Constitution, Kindt says.

“It’s 700 words of verbosity and obfuscation that cloak the true intent and impact of its last sentence, which is to override the current constitutional protections for teachers and retirees,” he said. “Many legislators who originally supported Amendment 49 probably did not realize that. But the offending sentence creates a constitutional blank check to override benefits accrued by state employees, including pensions and health care. It also was reportedly drafted outside the normal legislative procedures. That doesn’t pass the smell test.”

Kindt says that the ballot itself does not even include what people would be voting for or against.

“Currently, the certified ballot doesn’t even list the full text of the 700-word amendment,” Kindt said. “Experts believe the current ballot would not survive a legal challenge. The State Universities Annuitants Association also contends that Amendment 49 was drafted outside of normal processes.”

Although Amendment 49 was sped through the legislative process, Kindt says the Illinois public should be informed on the issues and not unwittingly eliminate their current constitutional safeguards because of 700 confusing words.

Editor's note: To contact John Kindt, call 217-433-0075; email jkindt@illinois.edu.

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League of Women Voters of Illinois Opposes HJRCA49

Title: The League of Women Voters of Illinois (LWVIL) Opposes HJRCA49...
Publication: The League of Women Voters of Illinois Website
Link: http://tinyurl.com/9vght9m
Date Published: September 26, 2012

After reviewing the General Assembly's proposal, relevant League positions and precedents, and researching supporting documentation, League of Women Voters of Illinois Board of Directors has decided to oppose HJRCA 49, the Constitutional Amendment referendum proposal that will be on the November 6, 2012 ballot.

THE AMENDMENT PROPOSAL:  The measure would amend the General Provisions Article of the Illinois Constitution requiring 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.  The full text is available here: http://tinyurl.com/9u4k8vv.

RATIONALE FOR OPPOSITION:  Our objection is squarely focused on the proposal's 3/5 majority vote requirement, not on pension reform issues.  We are acting under our Representative Government position to promote an open governmental system that is representative, accountable and responsive.

The Illinois League has a strong record supporting measures to make our democracy more, not less, representative. Our interest in and experience with constitutional amendments are extensive, including detailed study and active participation in the 1970 Constitutional Convention where we strenuously advocated for simply majority votes on constitutional matters.

As an organization that has been active in the legislative process, we have witnessed first hand what the Standard Code of Parliamentary Procedure confirms: Some people mistakenly assume that the higher the vote required to take an action, the greater the protection of the members.  Instead, the opposite is true.  Whenever a vote of more than a majority is required to take action, control is taken from the majority and given to a minority.

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.  If the legislature determines this needs to be done, a statute which can be modified more easily is the appropriate course to take.

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AFSCME: Vote NO on the Constitutional Amendment!

Title: Vote NO on the constitutional amendment!
Author: AFSCME Council 31
Link: http://www.afscme31.org/news?id=0431

A referendum at the top of this November's ballot could have disastrous implications for your retirement security.

When you vote on Nov. 6, before you get to the candidates, you will be asked to determine whether the Illinois State Constitution should be amended to make it more difficult to improve pension benefits for public employees.

AFSCME strongly recommends a NO vote on this constitutional amendment.

HJRCA 49 asks whether a 3/5 vote of the Illinois General Assembly should be required in order to improve any pension benefit for any public employee and whether a 3/5 vote of any local government body or school district should be required to approve any collective bargaining agreement that includes incentives or additional compensation increases beyond salary that enhance pensions.

AFSCME encourages all members to vote NO on this constitutional amendment.

HJRCA 49 is unfair because it:

Is undemocratic--all other laws, ordinances, etc. can be enacted with a simple majority vote;

Requires a 3/5 majority vote for improvements to pension benefits, but any reduction in pension benefits will still only require a simple majority;

Could cause more labor disputes at the local government and school district level because even if the union and management reach agreement on a contract, a minority of a city council, county board or school district could block its implementation; and

Will make it even more difficult to improve the very low Tier 2 benefit schedule that currently exists for employees hired after January 1, 2011.

HJRCA 49 was put on the ballot by politicians seeking to cover up their failure to adequately fund public pensions.

HJRCA 49 is backed by big business groups who want to create the impression that public employee pensions are too high.

Click below to download a flyer you can use to inform your co-workers, friends and family. Encourage everyone you know to vote NO on HJRCA 49.


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Retired Teachers Association of Chicago: Urgent Action Needed Now to Block HJRCA0049 (Amendment #49)

Author: The Retired Teachers Association of Chicago
Title: Urgent Action Needed Now to Block HJRCA0049 (Amendment #49)
Link: http://rtac.org/HCR5A.pdf

HJRCA0049 (Amendment #49) is a Constitutional amendment that will require that the Chicago City Council approve ANY CTPF ‘pension benefit increase’ by a three-fifths vote (30 of the 50 aldermen).  Wording seems to be very ambiguous and open to interpretation, which will probably lead to considerable litigation.  This amendment will  not affect your current pension payments but may require the Chicago City Council to vote to allow your 3% automatic annual increase (since the Constitution trumps the provision in the pension law).  This may also affect future retirees as it is unclear whether a salary increase provided through CTU and CPS contract negotiations (thus raising your potential pension benefits) falls into the category of a ‘pension benefit increase’. Note that the House Committee Amendment #1 does provide some specifics as to the type of things that would trigger a legislative vote.
   
The current status of HJRCA0049 is that it has been approved by the Illinois Legislature and will be placed on the November ballot.  If it receives a majority of the total votes cast or a three-fifths vote of those voting on this issue it will become part of the Constitution.

Please watch the RTAC website as this develops.  Join the RTAC Alert Network to get breaking news about any pension changing proposals.

This amendment will be a way of controlling, i.e. reducing, pension costs for ALL public employees, including police and firefighters. It is expected to pass the House, so attention is being focused on the Senate. Call, visit, email, snailmail your state senator. This amendment will change the Illinois Constitution FOREVER. Remember, it is only the 1970 Constitution that protects our pension; this amendment opens the  door to revising our benefits. For example, the City Council would be able to cap our COLA (Cost of Living Adjustment) if this amendment is ratified.

There is a huge likelihood, that, given the economic tenor of the times, it will pass easily. We must not let this happen.  “Don’t assume this ‘bad’ constitutional amendment will be defeated,” said Lobbyist Dick Lockhart. “Don’t be complacent on this issue. You need to have a talk with your friends and relatives about defeating this amendment. This issue is vital in terms of your future.”

We CAN do this. Remember how we turned back HB3827 last spring. We can’t let them deprive us of our hard-earned pension benefits now!

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Illinois Retired Teachers Association: Vote "NO" on November 6, 2012 to House Joint Resolution Constitutional Amendment 49

Title: Vote "NO" on November 6, 2012 to ... Constitutional Amendment 49
Publication: Illinois Retired Teachers Associations Website
Link: http://www.irtaonline.org/news.aspx
Date Published: September 21, 2012

Vote "NO" on November 6, 2012 to House Joint Resolution Constitutional Amendment 49

This amendment is a proposed addition of Article XIII, Section 5, to the Illinois Constitution, Pension Protection Clause. HJRCA0049 (Amendment #49) is a Constitutional Amendment that will require the Illinois Legislature to approve ANY 'pension benefit increase' by a three-fifths vote. The wording seems to be very ambiguous and open to interpretation, which could lead to considerable litigation if passed. This amendment will not affect your current pension payments.

IRTA's position is to vote "NO" on November 6, 2012 on HJRCA0049 (Amendment #49). Encourage your family, friends, and neighbors to vote "NO" for this proposal as well. Please continue to call, visit, and email your legislators and ask them to protect your pension and not pass this amendment.

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UIUC Campus Faculty Association: November Referendum Threatens Pensions

Title: November Referendum Threatens Pensions
Publication: Campus Faculty Association Website
Link: http://tinyurl.com/cr4vmv6
Date Published: September 25, 2012

The CFA is concerned about CA 49, a referendum on the November ballot which could potentially threaten pension benefits...We hope to have more on CA 49 as we carry on investigating its impact.

The link is: http://tinyurl.com/cs798cd.

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SIU SUAA: Tough Answers on Pension Questions

Title: Tough answers on pension questions
Author: D. W. Norris
Publication: The Southern Illinoisan
Link: http://tinyurl.com/9l5h755
Date: September 29, 2012

CARBONDALE — No easy answers were offered Friday when a group of concerned university retirees questioned Southern Illinois state legislators about the future of state pensions.

The meeting of the SIU chapter of the State Universities Annuitants Association also provided an opportunity for the members to rally against a proposed constitutional amendment they believe would negatively impact contractually negotiated retirement plans guaranteed by the state’s constitution.

Constitutional Amendment 49 would change language governing the state’s ability to change pension payouts, and that has some retirees ready to fight.

“It is beyond important that not only everyone in this room, but everyone in this community vote ‘no’ on it,” said Bruce Applebee, a member of the annuitants’ executive committee against the constitutional amendment.

State Sen. Dave Luechtefeld, R-Okawville, and state Rep. Mike Bost, R-Murphysboro, addressed the audience and fielded questions during a meeting that stretched more than an hour. State Rep. John Bradley, D-Marion, spoke at the meeting but had to leave before the question-and-answer session.

Luechtefeld has a retired teacher’s pension, but he has no plans to take legislator’s pension.

Luechtefeld said he doubted the amendment would have any impact on pensions if it passed in November.

“I don’t think it’s going to hurt or help your situation,” he said.

Although Bost, Bradley and Luechtefeld said they support retirees, they said state’s ever worsening economic condition will eventually force changes to be made.

“Unless something is done to pensions, you may not have a pension some day,” Luechtefeld said.

Bost cautioned, “All the systems will fail if we don’t do something.”

Bost compared the work that must be done to address more than $80 billion in unfunded pensions to being forced to grab a rough rope to avoid falling off a 5,000-foot cliff.

The rope would chafe, he said, but it beats the alternative, even if it takes a while for the worst to happen.

“We would be OK for 4,999 feet,” Bost said.

Luechtefeld said he doubted any pension reform would get done before the new General Assembly convenes in January, and he was not sure what kind of plan would be offered.

Although Luechtefeld would not promise to vote against any plan that cut pensions for current retirees because compromise among groups representing the state and pensioners may include a reduction, he said he has not yet seen a plan he would support.

Applebee said he was not satisfied with the answers on pensions, but it was not the fault of Bost and Luechtefeld. Applebee, a lifelong Democrat, said he appreciated the Republicans’ candor.

“I think that they gave some pretty good answers, and maybe they explained the fact that I tend to approach everything as if it’s black and white, and they made it clear that it’s not black and white, and that’s a good answer,” Applebee said.

The retirees’ compounded cost of living adjustment, or COLA, has been targeted in a bill backed by Illinois Senate President John Cullerton, D-Chicago.

Bost said he did not think the bill would affect the baseline COLA, but compounded additions were hurting the state’s financial position, especially when high-dollar pensions doubled after 21 years.

The issue of taxing retirement income also came up, and both men said they would listen to the arguments for it, but Bost said he doubted it would happen because every retiree would have to be taxed, meaning 93 percent of retirees would have to pay taxes because 7 percent were willing to sacrifice.

dw.norris@thesouthern.com/618-351-5074

On Twitter: @DW_Norris_SI

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Madigan: Public Pension Boosts Should Require More Votes

Title: Madigan: Public pension boosts should require more votes
Author: John O'Connor Publication: pjstar.com
Link: http://tinyurl.com/7c9g5w9
Date Published: Apr 12, 2012

SPRINGFIELD —
With Illinois facing strangling debt from the money it owes to retirement funds, a top Democrat is seeking to amend the state Constitution to make it more difficult for legislators to boost public-employee pensions in the future.

The amendment House Speaker Michael Madigan proposed this week would require three-fifths votes in the House and Senate to enhance retirement benefits for public employees and similar tallies by city councils or school boards to sweeten perks for certain employees. If lawmakers and Gov. Pat Quinn approve, voters would decide in November whether to make it part of the Constitution.

Illinois owes about $80 billion to its five public-employee pension systems because of decades of underfunding. Madigan has pushed several recent measures to ease the financial burden, such as reducing benefits for new employees.

The latest proposal is aimed at dozens of bills introduced over the years to sweeten government workers' pensions. The piecemeal changes add up. The rub is that most of those proposals get nearly unanimous support, anyway.

In the Teachers Retirement System alone, legislative changes have added more than $2 billion to the state's unfunded liability since 1996, or 6 percent of the total growth in the state debt to the system, according to TRS figures.

The largest state-employees' union, the American Federation of State, County and Municipal Employees, opposes Madigan's plan, while the Illinois Municipal League views it "very favorably."

House Minority Leader Tom Cross, R-Oswego, said he supported the measure but echoed AFSCME's repeated concerns about the $80 billion debt.

"Our real focus needs to be on how to reduce the unfunded liability," Cross said.

Madigan, a Chicago Democrat, introduced a similar amendment last spring. This revision answers local government worries that it would require extraordinary majority votes to approve budgets or other financial measures, spokesman Steve Brown said.

"This is not designed to complicate the day-to-day operations of local governments, school boards, or state government for that matter," Brown said. "But it is designed to make officials think a little more seriously when they consider benefit changes to the pension systems."

A committee appointed by Quinn expects to deliver other suggested fixes next week.

Madigan's proposal is scheduled for a committee hearing Tuesday. The Legislature would have to OK it by May 6 to put the question before voters in the November election.

"It's a critical component of an overall solution to rising pension costs," said Joe McCoy, legislative director for the Municipal League.

AFSCME said the idea doesn't fix a problem with the reduced pensions for new workers, which experts have said might run afoul of the federal Social Security exemption and result in penalties.

Local governments would need three-fifths votes in limited circumstances involving pensions — salary increases themselves would not be included. AFSCME spokesman Anders Lindall said proposed restrictions on local governments might improperly nix negotiated employee-contract agreements.

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Illinois Voters Guide: Constitutional Amendment #49

Publication: Illinois Voters Guide
Link: http://tinyurl.com/9uz344y

To the Electors of the State of Illinois:

The purpose of a state constitution is to establish a structure for government and laws. The Illinois Constitution: provides citizens with rights and protections; creates the executive, judicial, and legislative branches of government; clarifies the powers given to local governments; limits the taxing power of the State; and imposes certain restrictions on the use of taxpayer dollars. There are three ways to initiate change to the Illinois Constitution: (1) a constitutional convention may propose changes to any part; (2) the General Assembly may propose changes to any part; or (3) the people of the State by referendum may propose changes to the LegislativeArticle. Regardless of the method of initiating change, the people of Illinois must approve any changes of the Constitution before they become effective.

The proposed amendment adds Section 5.1 to the General Provisions Article of the Illinois Constitution. The new section would require a three-fifths majority vote to approve any pension or retirement benefit increase for public employees and officials. 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.

EXPLANATION

The proposed amendment adds a section to the Illinois Constitution requiring a three-fifths majority vote to approve any pension or retirement benefit increase for public employees and officials.

The proposed amendment requires a three-fifths vote of each chamber of the General Assembly (the Senate and the House of Representatives) for a bill that provides a pension benefit increase, except for appropriation bills. "Benefit increase" means a change to any pension or other law that results in a member of a pension or retirement system receiving a new benefit or an enhancement, including any changes that (i) increase the amount of a member's pension, or (ii) reduce or eliminate the eligibility requirements or other terms or conditions a member must meet to receive a pension. It also means a change to any pension or other law that expands the class of persons who may become members of any pension or retirement system. An increase in salary or wage level, by itself, does not constitute a "benefit increase," unless the increase exceeds limitations provided by law.

The proposed amendment would also require a two-thirds vote for lawmakers to override a governor's veto or accept a governor's proposed changes in a rewrite of pension increase legislation. Currently, it takes a three-fifths vote to override a veto and only a simple majority to accept a governor's changes.The proposed amendment requires approval of three-fifths of the members of the governing body of a unit of local government or school district for any ordinance, resolution, rule, or other action that provides an enhancement or emolument increase to an employee or officer that has the effect of increasing the pension of that employee or officer. "Emolument increase" means the creation of a new, or enhancement of an existing, advantage, profit, or gain that an official or employee receives by virtue of holding office or employment, which includes compensated time off, bonuses, incentives, or other forms of compensation. An increase in salary or wage level, by itself, does not constitute an "emolument increase," unless the increase exceeds limitations provided by law.

The proposed amendment requires approval of three-fifths of the members of the governing body of a pension or retirement system for any action that results in a "beneficial determination." A "beneficial determination" is an interpretation or application of law that reverses or supersedes a previous decision if that interpretation or application (i) results in an increase in the overall amount of pension benefits received by a member or (ii) results in a person becoming eligible to receive a pension. "Beneficial determination" does not include a final decision mandated bythe courts.

Voters that believe the Illinois Constitution should be amended to require a three-fifths majority vote to approve any pension or retirement benefit increase for public employees and officials should vote "YES" 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. Voters that believe the Illinois Constitution should not be amended to require a three-fifthsmajority vote to approve any pension or retirement benefit increase for public employees and officials should vote "NO" on the question.

Arguments in Favor of the Proposed Amendment

(1) A higher vote requirement would help prevent unfunded future liability for pension benefits.
(2) Requiring a three-fifths vote would provide better accountability.
(3) A three-fifths vote requires greater consensus among parties.

Unfunded Liability
Currently, the public retirement system is not financially stable and is significantly underfunded. A higher vote requirement to enact pension benefit increases will help to maintain fiscal responsibility and make it more difficult to further burden the public retirement system.

Provide More Accountability
The proposed amendment provides more accountability in the legislative process by requiring more votes to pass a pension benefit increase. Since the cost of benefit increases comes ata later date, the price to the taxpayers is not always noticed immediately. A higher vote requirement will signify to the governing body that they are taking a serious action and willencourage greater in-depth thought before passage.

Greater Consensus
A three-fifths vote requirement means the members of the governing body, regardless of political affiliation, will need to work together to reach an agreement. A greater consensus would provide for better decisions and more serious deliberation. Given the importance of pension benefit increases and their subsequent impact on taxpayers, greater agreement would be beneficial.

Arguments Against the Proposed Amendment

(1) A higher vote requirement may limit the bargaining power of employers and employees.
(2) There is the possibility of disagreement on what constitutes a benefit increase.
(3) Requiring a supermajority for pension benefit increases could make it more difficult to recruit the best people to work in government service.

Decreased Bargaining Power
Many government employees are represented by labor unions that bargain on their behalf for particular benefits. This constitutional amendment may make it more difficult for unions to bargain for certain increased benefits for their employees. In addition, many government employers may prefer to bargain over these benefits to give incentives to employees to do theirjobs well. This constitutional amendment could remove bargaining power from both the government employer and government employee.

Possibility of Disagreement on Terms
The proposed amendment creates new definitions for the terms "benefit increase," "emolument increase," and "beneficial determination," which are not defined in other statutes or in existing case law. These definitions could generate litigation, resulting in additional costs. There may also be disagreement amongst the governing body on whether a bill, resolution or other action constitutes a "benefit increase," "emolument increase," or "beneficial determination."

Recruiting Employees for Government Jobs
Like any employer, units of government wish to attract good employees. This constitutional amendment may make it more difficult for employers to increase benefits to employees andtherefore, make it harder to attract the best people to government service.

FORM OF BALLOT
Proposed Amendment to the 1970 Illinois Constitution
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 amajority of those voting in the election must vote "YES" in order for the amendment to become effective on January 9, 2013.

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Illinois General Assembly: Bill Status of HJRCA0049

Title: Bill Status of HJRCA0049
Publication: Illinois General Assembly Website
Link: http://tinyurl.com/9eargj6
Date Published: Last Updated May 3, 2012

Bill Status of HJRCA0049
97th General Assembly






Short Description:  CONAMEND-PENSION INCREASE VOTE
House Sponsors:  Rep. Michael J. Madigan, André M. Thapedi and Fred Crespo
Senate Sponsors: (Sen. John J. Cullerton - Iris Y. Martinez - Jeffrey M. Schoenberg)

Synopsis As Introduced: Proposes to amend the General Provisions Article of the Illinois Constitution. Provides that no bill, except a bill for appropriations, that provides a benefit increase under any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall become law without the concurrence of three-fifths of the members elected to each house of the General Assembly. Provides requirements for passage if the Governor vetoes a bill or returns a bill with specific recommendations for change. Provides that no ordinance, resolution, rule, or other action of the governing body, or an appointee or employee of the governing body, of any unit of local government or school district that provides an emolument increase to an official or employee that has the effect of increasing the amount of the pension or annuity that an official or employee could receive as a member of a pension or retirement system shall be valid without the concurrence of three-fifths of the members of that governing body. Provides that no action of the governing body, or an appointee or employee of the governing body, of any pension or retirement system created or maintained for the benefit of officers or employees of the State, any unit of local government or school district, or any agency or instrumentality thereof that results in a beneficial determination shall be valid without the concurrence of three-fifths of the members of that governing body. Defines terms. Effective January 9, 2013.

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Illinois General Assembly: Full Text of HJRCA0049

Title: Full Text of HJRCA0049
Publication: Illinois General Assembly Website
Link: http://tinyurl.com/9u4k8vv

1 HOUSE JOINT RESOLUTION
2 CONSTITUTIONAL AMENDMENT







3    RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
4 NINETY-SEVENTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, THE
5 SENATE CONCURRING HEREIN, that there shall be submitted to the
6 electors of the State for adoption or rejection at the general
7 election next occurring at least 6 months after the adoption of
8 this resolution a proposition to amend Article XIII of the
9 Illinois Constitution by adding Section 5.1 as follows:

10 ARTICLE XIII
11 GENERAL PROVISIONS

12    (ILCON Art. XIII, Sec. 5.1 new)
13 SECTION 5.1. PENSION AND RETIREMENT BENEFIT INCREASES
14    (a) No bill, except a bill for appropriations, that
15 provides a benefit increase under any pension or retirement
16 system of the State, any unit of local government or school
17 district, or any agency or instrumentality thereof, shall
18 become law without the concurrence of three-fifths of the
19 members elected to each house of the General Assembly. If the
20 Governor vetoes such a bill by returning it with objections to
21 the house in which it originated, the provisions of Article IV,
22 Section 9 shall govern the passage of that bill except that
23 such bill shall not become law unless, upon its return, it is

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1 passed by a record vote of two-thirds of the members elected to
2 each house of the General Assembly. If the Governor returns
3 such a bill with specific recommendations for change to the
4 house in which it originated, the provisions of Article IV,
5 Section 9 shall govern the acceptance of those specific
6 recommendations except that such recommendations may be
7 accepted only by a record vote of two-thirds of the members
8 elected to each house of the General Assembly, regardless of
9 the bill's date of passage or effective date.
10    For purposes of this subsection, the term "benefit
11 increase" means a change to any pension or other law that
12 results in a member of a pension or retirement system receiving
13 a new benefit or an enhancement to a benefit, including, but
14 not limited to, any changes that (i) increase the amount of the
15 pension or annuity that a member could receive upon retirement,
16 or (ii) reduce or eliminate the eligibility requirements or
17 other terms or conditions a member must meet to receive a
18 pension or annuity upon retirement. The term "benefit increase"
19 also means a change to any pension or other law that expands
20 the class of persons who may become a member of any pension or
21 retirement system or who may receive a pension or annuity from
22 a pension or retirement system. An increase in salary or wage
23 level, by itself, shall not constitute a "benefit increase"
24 unless that increase exceeds limitations provided by law.
25    (b) No ordinance, resolution, rule, or other action of the
26 governing body, or an appointee or employee of the governing

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1 body, of any unit of local government or school district that
2 provides an emolument increase to an official or employee that
3 has the effect of increasing the amount of the pension or
4 annuity that an official or employee could receive as a member
5 of a pension or retirement system shall be valid without the
6 concurrence of three-fifths of the members of that governing
7 body. For purposes of this subsection, the term "emolument
8 increase" means the creation of a new or enhancement of an
9 existing advantage, profit or gain that an official or employee
10 receives by virtue of holding office or employment, including,
11 but not limited to, compensated time off, bonuses, incentives,
12 or other forms of compensation. An increase in salary or wage
13 level, by itself, shall not constitute an "emolument increase"
14 unless that increase exceeds limitations provided by law.
15    (c) No action of the governing body, or an appointee or
16 employee of the governing body, of any pension or retirement
17 system created or maintained for the benefit of officers or
18 employees of the State, any unit of local government or school
19 district, or any agency or instrumentality thereof that results
20 in a beneficial determination shall be valid without the
21 concurrence of three-fifths of the members of that governing
22 body. For the purposes of this subsection, the term "beneficial
23 determination" means an interpretation or application of
24 pension or other law by the governing body, or an appointee or
25 employee of the governing body, that reverses or supersedes a
26 previous interpretation or application and either (i) results

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1 in an increase in the amount of the pension or annuity received
2 by a member of the pension or retirement system or (ii) results
3 in a person becoming eligible to receive a pension or annuity
4 from the pension or retirement system. The term "beneficial
5 determination" shall not include a beneficial determination
6 mandated by a final decision of a court of competent
7 jurisdiction.
8    (d) Nothing in this Section shall prevent the passage or
9 adoption of any law, ordinance, resolution, rule, policy, or
10 practice that further restricts the ability to provide a
11 "benefit increase", "emolument increase", or "beneficial
12 determination" as those terms are used under this Section.

13 SCHEDULE
14    This Constitutional Amendment takes effect on January 9,
15 2013.

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