Guv’s Pension Plan Not so Constitutional

Columnist and CapitolFax publisher Rich Miller identifies BIG constitutional problems with the Governor’s pension proposal plan – excellent analysis from today’s CapFax:

“Senate President John Cullerton believed, at first glance at least, that the proposal is constitutional because it offers employees a legitimate choice: Either stay in the current plan and face the loss of a higher pension and receive no government subsidy of their health insurance, or move to another, lower tiered plan that has fewer benefits, a higher retirement age, larger contributions and continued subsidized health insurance.

But doesn’t imposing a choice on employees from above violate that sacred contractual relationship demanded by the Constitution? If that was the case, then couldn’t the state just say, “Hey, you’ve got a choice between a 401(K) and a 401(K) plus a thousand bucks,”? Obviously not. So, what about this choice?

According to the governor’s office, “legal principles allow you to amend the contract.” And since the structure of the new plan provides that “each active member receive consideration to the Stabilization Benefit Changes in exchange for the new funding plan, future pensionable wage increase; and future retiree health benefits” then it should pass constitutional muster.

I’m not sure if anyone really believes that or not. So far, several states with far less stringent constitutional language have watched their unilateral pension reforms go down in flames once the courts got ahold of them. Perhaps that’s why the governor’s office isn’t ruling out a negotiated settlement with the unions.”