It didn’t take long for Illinois public employee unions to demand that the courts declare arithmetic invalid. Barely two months after the state legislature passed a modest but much needed pension reform bill increasing the retirement age and slowing annual cost-of-living increases, a confederation of Illinois’s biggest public sector unions have filed a lawsuit. The Chicago Tribune reports:
“Our suit makes clear that pension theft is not only unfair, it’s clearly unconstitutional,” said Illinois AFL-CIO President Michael T. Carrigan in a statement. “Teachers, nurses, emergency responders, and other workers and retirees will not stand by while politicians try to take away their life savings illegally.“The legislature and governor shirked their responsibility to uphold the constitution,” said Carrigan, the leader of the union coalition.” We are seeking justice in court to right their wrongs. Promises must be kept, and the rule of law must prevail over politics.”
The crux of the lawsuit’s argument is a provision of the state constitution that defines public pensions as a “contractual relationship” which cannot be “diminished or impaired.” (Notice, by the way, that making changes to the contract only constitutes a legal violation when pensions are “diminished,” not “increased.”) The court’s decision will be a big one. If it rules that the legislature has violated the state constitution, how will the state pay for its billions in unfunded liabilities? How will Chicago Mayor Rahm Emanuel alleviate the pain of carrying $29 billion in municipal debt?Look no further for signs of the blue model’s unsustainability than this example, which Illinois unions apparently think makes their best legal and moral case:
By way of example, the lawsuit highlighted the cases of 25 active and retired government workers. One was Chicagoan Lee Ayers, who has worked about 25 years as a clinical lab technician at a state university and expects to get an initial pension of $53,366 when he retires in 2019. Under the new law, he would lose more than $218,000 if he spends 25 years in retirement, the lawsuit contended.
Thirty years of work in exchange for twenty-five years of paid retirement is simply a chimera. It doesn’t even really matter how desirable or objectionable we think such an arrangement would be; the arrangement itself is financially impossible. Public employees who are promised such lavish deals should be extremely wary. The unions and politicians making these promises have no way of paying for them. On the evidence of Illinois, they will let you plan for retirement and pay into the system for decades before letting you know that the money’s gone and your plans need to change.