The fallout from this ruling could prove to be financially devastating to the state of IL and, by extension, the entire USA. Politicians in IL gave the unions unreasonable pensions in order to secure their support, then tried to default on the promises, and are now facing a wall. This is Detroit writ large and is a harbinger of things to come.
"The fireworks won't officially fly until tonight, but yesterday's decision in a key Illinois Supreme Court case has set off a first-class explosion in state and local government, potentially punching tens of billions of dollars in holes in their collective budgets.
Some elements of the court's decision are drawing intense debate. But if the overnight consensus is anywhere near correct, everyone from City Hall and the Capitol to your local village and school board will have little option now but to dig deep, cut services and raise taxes a lot — and labor unions little incentive to compromise.
"The law in Illinois is now crystal clear: Politicians cannot break the promises made to Chicago teachers and other city employees," crowed the Chicago Teachers Union in a statement. "Recently passed laws to cut promised retirement benefits are clearly unconstitutional."
Cash-strapped government budget makers "cannot write (the Illinois Constitution) to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve," said a more restrained but equally decisive Illinois Senate President John Cullerton.
The court ruled that retiree health insurance benefits for state workers mandated by the Legislature deserve the same level of protection as pensions, which according to the constitution "cannot be diminished or impaired."
The 6-1 ruling in a case called Kanerva vs. Weems did not specifically outlaw such cuts. Instead it sent the matter back to lower courts to review.
A few insiders say they remain confident that, when the court actually gets to the pension payments themselves, it will allow changes, and suggested that benefit cuts the General Assembly has ordered in pensions covering state workers, Illinois university employees, and grade- and high school teachers outside of Chicago will survive, too...
For instance, one argument defenders of the new pension law have offered is that unfunded pension liability now is so large — $100 billion in the state funds, and at least $32 billion in the city funds, for instance — that government has a right to order changes, using its so-called police powers, to set spending priorities. But, said the court, "In light of the constitutional debates, we have concluded that the (pension) provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them."
The "city", on the hook for a measley $32 billion, is, of course, that bastion of Liberal insanity Chicago. Personally I couldn't care less what happens to that foul pit which is Chicago or the state that inflicted Obama on us, but there will be consequences from this which could affect us all. Plus it is, as I said, a foreshadowing of future trouble elsewhere, as was GM. One of its major problems were the unsustainable pension benefits it gave to the UAW.
Buckle you seat belts, boys and girls, it's going to be a bumpy ride.
"It's inexcusable, and Americans are right to be angry about it, and I am angry about it. I will not tolerate this kind of behavior in any agency, but especially in the IRS, given the power that it has and the reach that it has into all of our lives. ... I'll do everything in my power to make sure nothing like this happens again by holding the responsible parties accountable. ..." -- President Barack Obama condemning "misconduct" at the Internal Revenue Service, May 15, 2013.
In other words, the jig is up. Time to pay the piper. Nice to see this is all coming to a head under the steady hands of Progressives, Socialists and Communist.
"The most anticipated vote in Detroit this summer isn't for a city office. Instead, ballots submitted by city retirees could determine how quickly Detroit exits its historic bankruptcy and how much of the financial weight pensioners will bear.
They are being asked to vote "yes" or "no" by Friday on a proposal to cut pensions for non-uniformed retirees by 4.5 percent and erase cost-of-living allowances. The proposal also eliminates some cost-of-living payments for retired police and firefighters.
Voting "no" could result in deeper cuts to pensions for the city's 32,000 retirees and current and former city workers.
Voices urging approval have been loudest and include Gov. Rick Snyder and Detroit emergency manager Kevyn Orr, the proposal's architect. Last month, the General Retirement System and Police and Firefighters Retirement System did the same, saying a "no" vote would lead to deeper cuts to pensions in what is known in bankruptcy as a cram down.
That "would be far worse than the settlement on the table," said Bruce Babiarz, spokesman for retired police and firefighters. "This is a very serious matter and people need to vote in terms of the impact on their pension, their family and their life."
Despite pressure to vote "yes," some retirees have said bankruptcy should not be a reason to break the state constitutional protections of public pensions. They would prefer to take the fight to a higher court, even if Detroit is broke and the pension funds are struggling.
The proposals are part of Orr's restructuring plan for the largest municipal bankruptcy in U.S. history. Orr has said the pension systems have $3.5 billion in unfunded liabilities."
"It's inexcusable, and Americans are right to be angry about it, and I am angry about it. I will not tolerate this kind of behavior in any agency, but especially in the IRS, given the power that it has and the reach that it has into all of our lives. ... I'll do everything in my power to make sure nothing like this happens again by holding the responsible parties accountable. ..." -- President Barack Obama condemning "misconduct" at the Internal Revenue Service, May 15, 2013.
Illinois Democrats come up with unique way to resolve the pension crisis.
"SPRINGFIELD - It could soon cost $200 for kids to set up a lemonade stand, have a bake sale or sell cupcakes in Illinois.
"This is absolutely insane!" State Senator Jim Oberweis (R-Aurora) said at a Capitol press conference Friday. "Somebody in Madison County went crazy and decided to enforce a law against an 11 year old kid who was baking cupcakes. That was a mistake, but it happened."
In the House, the little girl Oberweis referred to - Chloe Stirling of Troy's State Representative Charlie Meier tried to do the right thing by introducing a law that would help those in her situation and exempt up to $1000 in sales.
"Then what happened? It came to the Senate... We 'Illinois-ized' the bill - doing things the way we do in Illinois, which is everything we can to discourage entrepeneurism to discourage business interests," Oberweis told reporters.
Meier’s bill, which would have exempted food product entrepeneurs making less than $1000 from burdensome health department regulations, passed the Illinois House and was picked up by Democrat Senator Donne Trotter (D-Chicago).
Trotter amended the bill to require anyone selling food products to take an 8 hour food service sanitation course costing $145, obtain a county health department permit costing $25, label the food products to indicate ingredients and the fact that they are homemade, plus another $35 fee."
Sadly, however, the IL senate failed to adopt this wise fiscal policy, but, like a stubborn fungus infestation, they will be back.
"SPRINGFIELD - 5.27.2014 - A majority of the Democrat-controlled Senate agree with State Senator Jim Oberweis (R-Aurora) that it was "insane" to pass legislation that could cost $200 for a kid to set up a lemonade stand in Illinois. A bill failed in the Senate that would require cupcake business and lemonade stand owners, as well as other small food revenue venturers to pay permit fees and take an eight-hour food preparer sanitation course, costing more."
Ok, it didn't pass but that the Democrats even thought up this abomination; and then actually introduced it into the legislature, well, that says a lot.
If Fences Don't Work, Why Is There One Around The White House?~~Charles Krauthammer