CHICAGO An Illinois judge said he intends to rule next week on whether lawmakers have a right to get their paychecks after Gov. Pat Quinn moved to strike legislative salaries from the fiscal 2014 budget in an attempt to pressure them to act on long-stalled pension reforms.
Attorneys squared off in arguments for two hours before Cook County Circuit Court Associate Judge Neil Cohen on Wednesday. Cohen said he needed time to digest the arguments and would issue a ruling by Sept. 26.
Quinn suspended legislative pay in July after lawmakers failed to pass pension reforms by a Quinn-imposed deadline following the July 4th holiday. Previously, the leaders and Quinn agreed to form a legislative conference committee tasked with coming up with a new plan aimed at breaking the political gridlock over competing proposals. Quinn has also refused his paycheck.
Senate President John Cullerton, D-Chicago, and House Speaker Michael Madigan, D-Chicago, filed a lawsuit against Quinn and Comptroller Judy Baar Topinka, whose office issues state paychecks, challenging the legality of the line-item veto and Topinka’s withholding of the pay.
The state’s general obligation bond rating has sunk to the low-single A category, the weakest among all states, with all three rating agencies assigning a negative outlook primarily due to the size of the state’s unfunded obligations and pressure on the state’s general fund from rising payments. The state has $95 billion of unfunded liabilities for a funded ratio of just 40%. Payments will rise in the current budget by $1 billion to $6 billion.
Lawyers for Quinn, who attended the hearing, argued that the governor has the constitutional power to veto any item from the budget and lawmakers should have first attempted a veto override which requires a three-fifths vote before turning to the courts.
Attorneys for the legislative leaders argued that the veto was unconstitutional because it, in effect, altered legislative salaries in midterm and violated constitutional rules on separation of powers that protect the independence of individual branches of government.
The attorney general’s office which is representing the comptroller defended Topinka’s decision to withhold the paychecks until the courts could rule on the subject or an override vote taken, arguing that the issue was unprecedented.
Legislative conference committee members have said they are close to announcing a new pension reform plan, but it’s unclear whether lawmakers might act on it during their annual fall veto session next month. The plan likely will include additional contributions and benefit cuts and could alter how cost-of-living increases are assessed.
One proposal would end automatic pension increases and instead tie them to inflation. Some believe that change could help the plan better withstand a constitutional challenge against impairing pension benefits because the COLA could rise at a higher rate during periods of high inflation.
