November Referendum Threatens Pensions

The CFA is concerned about CA 49, a referendum on the November ballot which could potentially threaten pension benefits. We reprint here an article on CA 49 from the Chicago Sun-Times of September 23rd. We hope to have more on CA 49 as we carry on investigating its impact.

the link is: http://couriernews.suntimes.com/opinions/letters/14953585-474/pensions-amendment-hides-true-impact.html

Pensions amendment hides true impact

September 5, 2012 1:26PM

Amendment 49 on the November ballot in Illinois 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.Amendment 49 is crafted to strip local governments and voters of current decision-making prerogatives and transfer those decisions to Springfield.

Among other subterfuges, Amendment 49 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 Medicaid.

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

Amendment 49 contains more words than the entire first 10 Amendments to the U.S. Constitution — the Bill of Rights. The obvious intent of the verbose Amendment 49 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 Amendment 49.

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, Amendment 49 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 http://www.suaa.org, June 8, 2012) — Amendment 49 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.

Amendment 49 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.”

Instead of concentrating more power in Springfield’s legislative leadership, taxpayers should consider simply rejecting Amendment 49 as just more deceptive legislative legerdemain.

John Kindt of Mahomet is a professor of business at the College of Business at Illinois. He has testified as an academic before Congress and state legislatures regarding business and legal policy issues.

Editor’s note: According to the Legislative Information section of the Illinois Teachers’ Retirement System, Amendment 49 would “require all legislation, ordinances, rules and resolutions that increase public employee pension benefits to receive a three-fifths majority vote of the governing body considering the proposal before it takes effect. The amendment would govern the actions of the General Assembly, county, township and city governments, school districts and special districts throughout the state.”

For more on CA 49 visit:  http://www.suaa.org/