From Justice Mary Jane Theis, Illinois Supreme Court, opinion in Jones v. Municipal Employees’ Annuity and Benefit Fund of Chicago (3/24/16), affirming a circuit ruling that Chicago’s attempt to cut future pension benefits and raise contributions was unconstitutional under the Illinois constitution:
In addressing the theories advanced in support of the challenged legislation, the supreme court said that the fact that some of its provisions are directed at improved funding cannot overcome the fact that constitutional rights of employees and retirees would be violated. The pension protection clause does not guarantee any particular method of funding, but, rather, guarantees the right to be paid. The supreme court also said that, insofar as the involved unions worked with the legislature concerning this enactment, they were not acting as authorized agents within a collective bargaining process.
One question for the august juror: what does Chicago do when it runs out of money?
The august juror did not create the problem, it is not her responsibility to solve it, and it is not within her authority to alter the state Constitution. She did exactly the right thing.
You are right. So I will amend my question: what does Illinois’ constitution say should be done when Chicago runs out of money, which on present course will be within the next few years?
I haven’t read it, but probably nothing. Common sense says that Chicago will continue to write checks until it runs out of money, then it will stop writing checks. What Chicago is doing to its pensioneers is really no different than what Bernie Madoff did to his clients, they have been ripped off, promises were made that cannot be kept and therefore will be broken.
The same situation exists at the Federal level with Social Security and Medicare. The Feds will be able to drag it out a little longer beause they can add as many zeros to their account as they want to, but eventually reality wins. Does it matter whether you cant buy lunch because you don’t have any money or because nobody will take the money you have?
Chicago is but one among many where a constitution or charter precludes changing such a contract.
Solution? About all I can see is some form of bankruptcy. Otherwise, the taxpayers foot the bill until they give up and leave.