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Rahm's Pension Crisis Coming Along Nicely

"A law aimed at shoring up two of Chicago's financially shaky public worker retirement systems violates pension protections in the Illinois constitution, a judge ruled on Friday," Reuters reports.

"The ruling is a setback for Mayor Rahm Emanuel who has repeatedly said he will not raise taxes without pension reforms."

Gee, where have I heard that before?

*

The financial conditions of the city, the state and even CPS are "real," the crisis mode surrounding them is quite unnecessary. Rahm and Rauner have driven us to this point in furtherance of their own agendas, while holding solutions hostage. It's the shock doctrine come home - and they haven't tried to hide it.

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"[The judge's ruling] also gives Illinois' public labor unions more leverage to resist pension cuts."

This is a factual statement, but a more true statement might be something like "It also gives Illinois public labor unions more leverage to protect the retirement incomes hard won in numerous contract negotiations with a series of political leaders."

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"In a written opinion, Cook County Circuit Court Judge Rita Novak rejected Chicago's arguments that the 2014 law results in a net benefit because it will save the municipal and laborers' retirement systems from insolvency . . . "

So the city argued that merely by "saving" the retirement systems from "insolvency" it had gotten around the state Constitution's requirement that benefits not be diminished? That, my friends, is a Blagojevichian absurdity.

" . . . and that the law was backed by a majority of affected labor unions."

So the city also argued that violating the Constitution was permissible as long as everybody was in on it?

*

"She also took issue with Chicago's contention that it was not legally on the hook to pay pensions."

And we aren't legally required to pay income taxes!

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What's most sad about this ruling is that - along with the Illinois Supreme Court ruling striking down pension "reform" at the state level - is that it just reinforces how much time we've wasted (years!) on "solutions" that were so obviously illegal from the start. How much has that cost us?

*

"Chicago will appeal Novak's ruling up to the Illinois Supreme Court, according to a statement from the city's top staff attorney."

I'd say the odds of Chicago getting a favorable ruling there are considerably longer than the odds the 7th Circuit Court of Appeals was going to exonerate Rod Blagojevich.

To wit:

"Novak's ruling also cited the Illinois Supreme Court's sweeping decision in May that found public sector workers have iron-clad protection against pension benefit cuts. That decision came in litigation over a 2013 law that reduced benefits for workers in state retirement systems."

*

The Tribune characterized Novak's ruling as "slapping down the city's arguments point by point."

*

"One expert on the Illinois Constitution characterized the city's chances of winning on appeal as futile, given the previous Supreme Court opinion on state pensions.

"Ann Lousin, a John Marshall Law School professor who teaches a course on the state constitution, said she saw the city's chances of success at 'somewhere between zero and a snowball's chance in hell.'"

Ann Lousin is just one expert, but do you ever get the feeling Rahm just sold us a bill of goods? Oh, of course, you get that feelng all the time. Still, we just had a re-election campaign and all.

*

From the New York Times:

"I do not believe the taxpayers have $1 billion-plus in their pocket ready to put into a pension and bear the entire burden," he said on the news program Chicago Tonight in May. "Which is why I said to labor, 'If you come forward, I'm ready to step up on the issue of revenue, which no mayor has done before. But you have to be part of the solution.'"

The taxpayers have already put $1 billion-plus into the pension system - and Rahm's pals spent in elsewhere (in ways that mostly benefited Rahm's pals). Let's be clear about that.

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"It's indisputable that participants are better off with this legislation than they would be without it," city attorney Stephen Patton told the Sun-Times.

It's also indisputable that I'd be better off stealing a million bucks from Chase bank than not stealing it, but it's still illegal.

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Mmmm, stealing a million bucks from Chase bank . . .

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Patton acts like these are the only two options: the city's unconstitutional plan or the status quo. That's Pattonly ridiculous.

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"The loss at the circuit court level should spur the city to consider alternatives," Standard & Poor's says. "In our view, the ruling forces the city to identify a solution that does not rely on pension reform to manage the budget demands of its pension liabilities in the long-run."

In other words, forget pension reform. It's illegal. Find the money owed - perhaps through a financial transactions tax, TIF surpluses, a property tax increase, eliminating corporate subsidies, legalizing and taxing pot, a progressive income tax - and pay it.

I still like the Rahm Emanuel dunk tank and Rahm Emanuel swear jar, but those ideas haven't caught on.

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"Earlier this week, Chicago aldermen said they were preparing for the worst and wracking their brains to come up with new ways to raise revenue and cut costs.

"On Friday, Ald. Pat O'Connor (40th), Emanuel's City Council floor leader, failed to return repeated phone calls and text messages."

Let me fix that for you:

"On Friday, Ald. Pat O'Connor (40th), Mayor Richard M. Daley's city council floor leader when Daley and the council were spending pension money on Daley's pet projects, and who is now Emanuel's floor leader, failed to return repeated phone calls and text messages."

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Comments welcome.



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Posted on July 25, 2015


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