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SUAA Mini Briefing 5.22.2015

SUAA Mini Briefing

May 22, 2015The Legislature will be taking the Memorial Day weekend off. It’s unusual that we aren’t having to watch the “shop” over the holiday weekend; however, there will be plenty of time – 6 full days – starting Monday evening through next Sunday night. Governor Rauner states that he will keep the Legislature in all summer if everyone doesn’t start seeing things his way. This could be the beginning of an interesting summer.

On the lighter side, Pumpkin Pie will be the official State pie and Sweet Corn will be the official State vegetable. According to the Illinois Department of Revenue an estimated 95 percent of the pumpkins processed in the United States are grown in Illinois. Wal-Mart contracts for one million pumpkins to be sold all over the nation. Another 500,000 are sold to other retail distributors. The Sweet Corn legislation was a fourth grade school project coming out of Chatham, Illinois. The students presented their idea to Senator Sam McCann and Representative Raymond Poe. Both bills are on the Governor’s desk for his signature. The Polka was unable to advance as Illinois’ State Dance because “while the Polka inspired its own dance, that category is already spoken for by the Square Dance.”

On the heavier side – Rep. Elaine Nekritz introduced HR 358 which urges the Teachers Retirement System and the State Universities Retirement System to pursue an Internal Revenue Service ruling on the compliance of Tier 2 with safe harbor provisions under Section 312(b)(7)(F) of the Internal Revenue Code of 1986. HR 358 is currently in the House Personnel and Pension Committee.

SB 1583 sponsored by Senator Terry Link and picked up in the House by Rep. Elaine Nekritz would allow the Teachers Retirement Insurance Program (TRIP) and the College Insurance Program (CIP) retirees who elected not to participate in the health insurance to re-enroll in the program of health benefits during any annual benefit choice period without evidence of insurability. The bill is in House Rules Committee. Last year this same bill was shelled of this content. It has already passed the Senate without any problems.

HJRCA 26 proposes to amend the Revenue Article of the Illinois Constitution. This bill provides that an additional income tax shall be imposed on individuals in an amount equal to 3% of the portion of the individual’s income that is greater than $1,000,000 for the taxable year. It provides that the revenue collected from the tax shall be distributed to school districts on a per pupil basis (Third Reading was placed on Calendar – Consideration Postponed). At this time all House Republicans and 3 Democrats have voted against the bill (Needs 71 votes to pass). Speaker Madigan needs to find 3 votes before calling the bill for another vote.

Two interesting and well presented subject matter hearings were held in the Senate this past week. Appropriations I and II heard testimony from Laurence Msall, President of Chicago’s Civic Federation. Mr. Msall had been invited to provide findings from the Civic Federation’s Institute for Illinois’ Fiscal Sustainability. His testimony was based on their analysis of the Governor’s recommended operating and capital budgets for FY 16. This report can be found at http://www.civicfed.org/iifs/publications/FY16_ILRecommendedBudget.

The second informative hearing was held in the Senate Higher Education Committee regarding Amtrak funding. As you know, students find Amtrak an indispensable means of transportation to get to and from campus. Large cuts to its budget (Rauner has proposed a forty percent cut to Amtrak funding) would hinder Amtrak access to students due to fewer trains and higher demand for seats. Recognizing the need for funding, mayors, community college and university presidents, and several Amtrak personnel, testified in support of Amtrak and the important services it provides to our public universities and community colleges. For example; ten percent of Spoon River Community College’s student enrollment comes from the northern part of the state, many of whom take the train. Additionally, Amtrak is especially necessary for foreign students and faculty who fly into Chicago O’Hare Airport-they do not have cars so the train is their best option. It will be interesting to see what happens in the coming week.

SUAA has been alerting certain legislators to the fact that there is no allocation in the FY 2016 Budget for the College Insurance Program (CIP). However, there is an alternative budget that has not yet been introduced which does include funding for CIP. It has also been stated that this budget only reduces university funding by 6% instead of 31%. Next week will give us all a better idea of what is to come.

If you need more to read this weekend, check out a joint publication authored by the Center for Tax and Budget Ability and the Taxpayers Federation of Illinois. The article is called “ Expanding the Base of Illinois’ Sales Tax to Consumer Services will Both Modernize State Tax Policy and Help Stabilize Revenue.” Check out CTBAor TFI websites for the content.

The SUAA Annual Meeting will be held on June 16 & 17. Speakers will be Bryan Lewis, Executive Director of SURS; Aaron Maduff, Attorney, Maduff and Maduff, LLC.; Ralph Martire, Executive Director, Center for Tax and Budget Accountability.

University retirees who paid health insurance premiums should expect reimbursements by June 15th. If you have direct deposit from SURS your check will automatically be deposited. If you receive your pension check by mail, your health insurance reimbursement will be mailed by June 15th.

Celebrate the Memorial Day weekend! The Illinois Department of Transportation is stopping all road work at 3:00 p.m. today to allow safer and faster travels for those of us traveling the highways!

More news from the front will be coming next week!

Linda L. Brookhart

Executive Director

State Universities Annuitants Association

 
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Posted by on May 23, 2015 in Uncategorized

 

HB 403 Reduced Tuition for Dependents

This bill is not dead. It is important for us to let our legislators know that we oppose the loss of this benefit. Eliminating reduced tuition will not save the state money.

Use this link to find your legislators and click to find their Springfield phone numbers.
http://openstates.org/find_your_legislator/

Call. All you need to say is “I live at …, and I urge Representative (or Senator …) … to vote No on HB403.”

Let’s hope that if enough of us call, this punitive bill will be defeated.

 
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Posted by on May 22, 2015 in Uncategorized

 

Call to Protect Illinois Public Universities Today!

We received this message from John Miller of UPI. It has links that facilitate letting your legislators know that you oppose Governor Rauner’s cuts to higher education. Please use the email to identify your legislator’s phone number in Springfield. Please call and tell them that you oppose the proposed cuts to higher education. Thanks.

GSU SUAA

Greetings everyone,

We need your help. Faculty, staff and students from across the state are in Springfield today talking with State Representatives and Senators. We need your phone calls and emails to help spread the message: No Cuts to Our Public Universities!

As you may know, the Governor’s proposed budget would cut state funding to all public universities by 31.5%. This would devastate our institutions by requiring them to increase tuition, cut programs, cut student services, and lay off employees.

Some important facts about Illinois funding for our public universities:

* Since 2000, when adjusted for inflation, state funding for Illinois public universities has been cut by over 35%.
* As a result, average tuition and fees for entering freshman in Fall 2014 was the 5th highest in the country and the highest in the Midwest.
* Seventy percent of graduating seniors in Illinois have student debt that averages over $28,000
* Public higher education is an economic engine for the state of Illinois. Not only does a college degree result in higher earning potential for our students and graduates, but an educated workforce is crucial to improving productivity, ingenuity, and scientific, technological, and entrepreneurial innovation. Education drives our economy.

Please call and/or email your State Representative and Senator today with the simple message – No Cuts to our Public Universities!

If you are unsure of how to contact your representative and senator in Springfield, please click http://openstates.org/find_your_legislator/. Simply enter your address and follow the links to your legislators. Please call their Springfield phone number today. As always, remember the person answering the phone might be affected by these cuts too. Politeness only helps demonstrate our commitment to our cause.

If you have not done so already, join over 15,000 Illinoisans who have either signed our online petition or postcards by clicking: www.petitions.moveon.org/sign/protect-illinois-public?mailing_id=29369&source=s.icn.em.cr&r_by=2418271<http://www.petitions.moveon.org/sign/protect-illinois-public?mailing_id=29369&source=s.icn.em.cr&r_by=2418271>

This campaign does not end tomorrow; continue you participation via our Facebook page at: www.facebook.com/fundourfutureillinois<http://www.facebook.com/fundourfutureillinois>.

John Miller

Fund our Future
UPI Local 4100

 
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Posted by on May 22, 2015 in Uncategorized

 

Annual Meeting Info – Register for Hotel by May 29th

To SUAA Members:

The 2015 SUAA Annual Meeting will be held at the President Abraham Lincoln Hotel in Springfield, IL on Tuesday, June 16th and Wednesday, June 17th.

Call 1-866-788-1860 to make hotel reservations.

State University Annuitants Association Block room rate is $105.00 per night.
Rates are guaranteed through Friday, May 29th, 2015.

Registration for the Annual Meeting will open Friday, May 29th.

Program information will be coming soon.

Linda L. Brookhart

Executive Director

State Universities Annuitants Association

 
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Posted by on May 20, 2015 in Uncategorized

 

SUAA Mini Briefing 05.14.2015

SUAA Mini Briefing
May 14, 2015

Groundhog Day at the General Assembly

As many of you know, last Friday was a huge victory for all SUAA members. The Illinois Supreme Court made a historic ruling making Public Act 98-599 unconstitutional when they filed their opinion stating that, in reference to the pension clause in the State Constitution, “The purpose of the clause and its dual features have never been in dispute.” Furthermore, retirement annuity benefits are unquestionably a “benefit of contractually-enforceable relationship resulting from membership” in one of the four state-funded retirement systems – including SURS. Despite this concrete ruling; however, politicians are still trying to find a way to diminish your benefits.

Yesterday, the House committee on Personnel and Pensions held a subject matter hearing to discuss Governor Bruce Rauner’s pension proposal, and a new constitutional amendment regarding the state’s pension clause.

Rauner Pension Proposal:

· The new pension proposal would raise the retirement age to 67 and early retirement to 62.

· It would offer a buyout option for Tier 1 employees in exchange for their 3% cost-of-living-adjustments if they allow for a pension freeze.

· After the effective date, currently proposed at July 1, 2015, all Tier 1 employees would enter the Tier 2 system (likely the same one approved a few years ago) with the understanding that “any benefit for work performed [as a Tier 1 employee] would be protected” and that all work performed after July 1, 2015, would be under the Tier 2 formula.

· Caps the salary on how much a pension can earn.

· Lowers annual raises to pension benefits (possible alignment with inflation rate).

Governor Rauner’s legal counsel, Kay Fowler, who spoke at the hearing yesterday, explained that the Governor’s office does not “think the court clearly answered what benefits are protected.” Furthermore, they believe the plan “is constitutional even after the Supreme Court ruling.” It seems clear this Governor has not learned the lesson from our last Governor – the pension clause clearly states that our benefits “shall not be diminished.”

There were, understandably, some grumbles among members of the committee, particularly Representative Elaine Nekritz. After hearing from Ms. Fowler, Nekritz was a bit taken aback, saying that, effectively, this conversation took place a few years ago and the current matter felt “like Groundhog Day.” Her stance – as well as several others in the committee – was that the Supreme Court made a concrete opinion that does not allow for any diminishment of benefits whatsoever.

Rauner Proposed Constitutional Amendment:

· Adds the word “earned” in front of “benefits” in the state constitution in reference to the pension clause. Thus, the proposed pension clause would read as follows:

“…membership in any pension or retirement system of the State shall be an enforceable contractual relationship,
the earned benefits of which shall not be diminished or impaired.” *Bold and italicized for emphasis*

· Furthermore, the new amendment would have information regarding the new pension formula to be used after the proposed amendment’s effective date (the language is not yet available).

There is also an additional proposed constitutional amendment, put forward by Representative Joe Sosnowski (R- Rockford) that is calling for a full repeal of the pension clause in the state constitution. This proposal’s goal calls for full power for the General Assembly to have the ability to take away as many benefits as they see fit. However, the main focus is Governor Rauner’s proposal since Rep. Sosnowski has not been able to move the bill.

We believe that both of these proposals are absolutely harmful to all current and retired members of SUAA. Any diminishment of benefits, as the Supreme Court has already outlined clearly, is illegal and we will use all resources to ensure that these measures do not come into fruition. Any attempt to pass these proposals will meet the same fate as the rest – a ruling that they are already unconstitutional. To do all of this again – countless hearings and testimony, lawsuits defending our rights, and the like – would only be a waste of their time. Either way, we will continue to fight for what rightfully belongs to members of SUAA.

Linda L. Brookhart
Executive Director
State Universities Annuitants Association

 
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Posted by on May 15, 2015 in Uncategorized

 

May 2015 SUAA Newsletter

Please find linked below the May 2015 SUAA Newsletter.

Also note that the Annual SUAA Luncheon sponsored by the President’s Office will be held on Thursday, June 25. Your invitation is on the last page of the newsletter. Hope you can attend!

SUAA Newsletter – May 2015 Final.pdf

 

SUAA Mini Briefing 05.11.2015

SUAA Mini Briefing

May 11, 2015

Re-Cap of Public Act 98-599 Leading to Supreme Court Decision
Announced on Friday, May 8, 2015

TIER 1 PARTICIPANTS AND BENEFICIARIES WIN PENSION BATTLE

Click Here to read the Supreme Court Decision

In February of 2014, SUAA filed suit in Champaign County Court challenging the Constitutionality of Public Act 98-599, also known as the Pension Reform Law. That law gutted pensions for public employees and retirees, including those for members of the State Universities Retirement System. Eventually, on March 11, 2015, SUAA’s lead attorney, Aaron Maduff, argued that case to the Supreme Court of Illinois. Last Friday, May 8, 2015, the Illinois Supreme Court issued an opinion which many have called its most important this millennium. That opinion confirms SUAA’s arguments in every respect. The Pension Reform Law has now been permanently struck down as unconstitutional.

This Mini Briefing is lengthy because we want to provide the whole story with facts put in sequence so all SUAA members understand the importance of SUAA’s roll in this landmark case. It is now time to tell the whole story. References to the Illinois Supreme Court opinion will be by ¶ number. And so we begin.

SUAA Joins the Fight

From the start, SUAA recognized that SURS members are different in many ways than other state employees. The money purchase plan available to SURS members faced a far more serious threat than the traditional pension plans available to other state employees. The nature of Community College and State University personnel positions are such that they faced difficult decisions that others would not face. The diversity of SURS members resulted in very different repercussions for their retirement plans not only as compared to other state employees, but even among themselves. This was a fight that SURS members and their organization, SUAA, had to take responsibility for themselves. This was not a fight that SUAA could entrust to anyone who had loyalties other than to SURS members. As the course of the case would show, it was with very good reason that we took responsibility for making this fight ourselves – and the result proves that point in spades.

The Initial Filing and the Motion for Injunction

SUAA first filed the case in Champaign County in February of 2014, and the State moved to transfer it to Sangamon County to be combined with cases filed by several other groups. In order to preserve its independence from the others, SUAA fought that motion. We lost that fight and the case was combined with four others in Sangamon County. That was the first and only battle we lost in this case.

The plaintiff groups in each of the five combined cases, tried to work together. But there were unfortunately different interests at stake. The first was the clear problem that SURS members were facing with the potential of losing refunds under the money purchase formula if they did not retire by June 1, 2014. While some groups felt that filing for an injunction to bar the law from going into effect was unnecessary and would cost resources for a fight that would be lost, SUAA could not afford the luxury of sitting back. We had to try. As a result of the changes to the money purchase formula which did not affect other state employees, numerous long time SURS members were facing the prospect of losing thousands of dollars, in one case nearly four hundred thousand dollars, in refunds of overpayments to the system. That was real money that belonged to individual people, and many SURS members were taking early retirement to avoid that disaster.

Working as quickly as we could, on May 2, 2014, SUAA filed a motion for a preliminary injunction asking that the law be held in abeyance until this case could be completed. That motion was supported by some 20 declarations from SURS members who were facing the terrible decision of retiring or losing their refunds. A few weeks later, the unions filed a similar motion, but it had only six declarations and did not include the money purchase arguments that SUAA’s motion included. In the unions’ defense, the majority of their members are not SURS members and did not face these issues. But it was one more reason why SUAA had to act for SURS members itself. On May 14, 2014, the Sangamon County Court entered the preliminary injunction and Public Act 98-0599 was shut down – and it was never revived.

The State’s Defense and the Circuit Court’s Final Ruling

The State’s only real defense to this case was its claim that the State’s reserved sovereign power (“police power”) allowed it to violate the Constitution to preserve the health, morals, and welfare of the people. While there is legitimacy to the police power argument in certain contexts, the five plaintiff groups insisted that this was not one of them. The State wanted to spend years going through expert reports on economic forecasts, budgets, and other issues to prove its police power defense. The plaintiff groups insisted that this was unnecessary because the police power did not apply in the first instance. Eventually, SUAA filed a motion to strike that defense because it is inapplicable to the Pension Protection Clause of the Illinois Constitution. The other four groups followed with a “similar, but separate motion.” (Opinion ¶ 38) SUAA also joined with the other groups in a motion for summary judgment on the facts with the State filing a summary judgment motion of its own. The State’s motion was denied and the three plaintiff motions were granted. The Sangamon County Court then entered a permanent injunction against the law.

The State’s Appeal to the Supreme Court

The State took immediate appeal to the Illinois Supreme Court. The State’s brief was filed in January of 2015 and two briefs were filed by the Plaintiff groups in opposition in February of 2015. Four groups filed a single brief and SUAA filed its own brief – and as it turns out, with good reason.

The State argued that it was taken by surprise by the economic downturn of the mid-2000s, and that if it did not pass Public Act-98-599, the State’s credit rating would be hurt. But the problem is that the State itself failed to fund the pension systems for nearly a century. In the words of SUAA’s attorney, Aaron Maduff, during oral argument before the Supreme Court, this was Lizzie Borden Defense: “I killed my parents. Have mercy on me, I’m an orphan.” SUAA’s brief to the Supreme Court began by addressing this State’s surprise at the economic downturn:

Today the State blames its problem not on its lack of fiscal discipline, but on its feigned surprise that, after an economic boom in the 1990’s and early 2000’s, it faced a “Great Recession” from 2008-2010. It even goes so far as to suggest in its Statement of Facts that “the Act reduces future COLA’s only to recover a portion of the liability attributable to the Great Recession” (St. Br. at 10), as though retired State employees are somehow responsible for the State being caught unaware that the economy has cycles. But history repeats itself. An economic boom in the early 1830’s was followed by the recession of 1837, another boom was followed by the recession of 1873, and of course the roaring ‘20’s were followed by the Great Depression. But mankind has known about economic cycles at least as early as Joseph’s interpretation of Pharaoh’s dreams. Genesis 41. (SUAA’s brief, page 2. For the entire brief, Click Here.)

The Illinois Supreme Court came to the same conclusion: “The circumstances presented by this case are not unique. Economic conditions are cyclical and expected, and fiscal difficulties have confronted the State before.” (Opinion ¶53)

In response to the State’s concern about its credit rating, Mr. Maduff pointed out during oral argument that if the State is permitted to simply renege on its financial obligations, the $50 Billion market in Illinois’ general revenue bonds would crash. The Supreme Court echoed that concern noting that “If financial markets were rational, this prospect would not buoy our economy, it would ruin it.” (Opinion ¶34) And of course, the key words are found at the end of the opinion: “For the foregoing reasons, the judgment of the Circuit Court declaring Public Act 98-599 to be unconstitutional and permanently enjoining its enforcement is affirmed.” (Opinion ¶98)

Throughout the opinion, the Supreme Court references portions of SUAA’s brief and Mr. Maduff’s oral argument before the Court. The Supreme Court also did a marvelous job doing its own research quoting extensively from legislative transcripts, U.S. Congressional hearings, and other sources. The result is an opinion and order that is comprehensive, insightful, and provides a clear direction to the General Assembly. That direction is “You cannot avoid your pension obligations!”

What the Future Holds

When SUAA filed this case in February of 2014, pension members were behind the proverbial 8-ball. The State had been failing in its obligation to fund pensions for nearly a century. The General Assembly had already enacted legislation which the Governor signed into law that gave the State permission to simply default on pension obligations and to leave SURS members among others in the dust. The law was set to go into effect and people began to take early retirement as an emergency measure to preserve their pensions and refunds. A tsunami was washing upon the shores of retirement threatening to drown peoples’ plans for their future, plans resting on pensions they assumed they had earned and were earning by making life commitments to our Universities and Community Colleges. … and SUAA had not raised a penny for legal defense.

Today, more than 14 months later, SUAA has stood its own ground with its own legal team. It has stood shoulder to shoulder with other groups fighting the storm. The tsunami has been turned away and pensions are left standing – for today.

But we shall not rest on our laurels. It is a fool who assumes the fight is over. The State still faces an unprecedented financial problem. Having ignored its obligations to the pensions for nearly a century, it now has a $100 Billion bill to pay that continues to rise. That the Supreme Court has struck this law does not mean that the State will not make other efforts. Indeed, the final footnote of the opinion notes that “The legislature is, of course, free to reenact any provisions of Public Act 98-599 that do not violate the constitution.”

Even before the Supreme Court issued this opinion, Illinois’ new governor, Bruce Rauner, unveiled a plan to force current employees into a new, far less favorable pension – one that some experts have said would cost state employees more in real money contributions than they will eventually receive in real money pensions. Under those circumstances, people would be far better off without pensions in the first instance. There is simply no reason to believe that the Governor or the legislature has given up on efforts to undermine your pensions.

SUAA will continue to defend pensions and your benefits in the General Assembly and, if necessary, in the Courts. SUAA will be vigilant – ever watchful for these attacks. SUAA’s mission has never been clearer. We urge you to participate vigorously in SUAA’s efforts. Surprisingly, only thirty-one percent of the SUAA membership has given to the SUAA Legal Fund – our pillar of legal support. To those who have not contributed, we ask that you reconsider- contribute your share to SUAA’s Legal Fund – contributions that will go towards the continued legal defense to ensure pension futures remain intact. And most of all, we encourage you to believe in your pension rights and to fight for them as you have and are for higher education for the students of the State of Illinois.

Click Here to Contribute to Legal Fund

Or mail a check to: SUAA Legal Fund, 217 E. Monroe, Suite 100, Springfield, IL 62701

To the Thirty One Percent of the Membership who contributed to the Legal Fund we salute you! Without you the ability to fight for you would not have been possible. We know for a fact that there would not have been any focus on SURS participants or beneficiaries. As explained in the Mini Briefing, SURS is the exceptional pension system. There were also additional contributions from people who are not members of SUAA, but thought our mission was important enough to support by contributing. We salute you as your contributions were very much needed.

Thank you for your participation – the need for a Legal Fund will not go away. We look for your continued support.

SUAA thanks the efforts of its Plaintiffs:

Dominic “Nick” Arend Joyce Beasley Bruce Busboom
Oliver Clark Aimee Densmore Marcia Hamor
Maureen McCord Bruce Reznick Yvonne Sergent

SUAA thanks its Declarants:

Marie Anderson Bruce Appleby Ronald Belden Linda Brookhart
Ugo Buy Donald Castle Rick Coyne Scott Docking
Mary Lou Read-Dreyer Sharon Hall Arthur Iorio Pamela Jacobini
Brian Kirk Martin Land Linda Leinicki Fred Pugh
Bruce Reznick John Summey Joyce Tyler
SUAA thanks the efforts of its legal team, Maduff & Maduff, LLC:

Aaron B. Maduff

Michael L. Maduff

Walker R. Lawrence

John D. Carr

Juawanna K. Dervin, Legal Assistant

K. Lynn Goodin, Legal Assistant

Lastly, but certainly not least, SUAA thanks its staff all of whom have been devoted to this case throughout:

Linda Brookhart, Executive Director

Debi Vaninger, Communications Director
Jamell Adkisson, Membership Director
Emily Schmidt, Membership Assistant

Holly McDonald, Financial Director

We also appreciate the services of Terry Martin, Executive Director of Illinois Channel. Illinois Channel provides Unedited, Nonpartisan Coverage of Illinois State Government and Public Affairs. Because of Illinois Channel, SUAA was able to keep all members abreast of the activity at each pension hearing through interviews with Attorney Aaron Maduff. These interviews were then posted to the SUAA website, Illinois Channel and YouTube.

Linda L. Brookhart

Executive Director

State Universities Annuitants Association

 
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Posted by on May 12, 2015 in Uncategorized

 
 
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