Opinion ID: 2103506
Heading Depth: 1
Heading Rank: 3

Heading: Recurrence of the Question

Text: It is doubtless that the guidance afforded in resolving the challenges raised would find quick and regular application. Balancing the State budget is, of course, an annual travail. Opportunity to resort to legislative maneuvering to overcome revenue shortfalls awaits only the next budgetary crisis. (See also People ex rel. Bernardi v. City of Highland Park (1988), 121 Ill.2d 1, 8, 117 Ill.Dec. 155, 520 N.E.2d 316 (invoking a separate exception for moot questions capable of repetition but escaping review but noting the recurrence of the question with reference to the considerations for the public interest exception).) And, again, the extensive amendment of other legislation under the Second Emergency Budget Act leaves open the possibility of similar future attack. The above considerations show the merits of this case should have been addressed. I endeavor to do so now, convinced that all parties anticipated such a resolution. There is also the chance that, in not doing so, the majority's declination to pass on the propriety of the denial of the TRO may be taken as reason to assume there is nothing constitutionally onerous on the whole about the Second Emergency Budget Act. The possibility of similarly overlooking the constitutional legitimacy of the transfer, a separate concern, is less likely. Resolution of the transfer's legitimacy depends on the same constitutional provisions at issue in the pending litigation regarding the alleged underfunding of the systems. The Second Emergency Budget Act of 1992 The Second Emergency Budget Act is peculiar both in structure and nature. It is one of a type of legislative measure that has before warranted this court's close scrutiny. (See Fuehrmeyer v. City of Chicago (1974), 57 Ill.2d 193, 202-03, 311 N.E.2d 116.) The legislative aim is accomplished by fashioning new provisions as well as amending separately existing legislation, a scheme first encountered in Turner v. Wright (1957), 11 Ill.2d 161, 142 N.E.2d 84. The concern with such measures is that they may violate the so-called single- or one-subject rule, a command retained from the 1870 Constitution limiting the content of bills. See Ill.Ann. Stat., 1970 Const., art. IV, § 8, Constitutional Commentary, at 155 (Smith-Hurd 1971); Ill. Const. 1870, art. IV, § 13 (No act hereafter passed shall embrace more than one subject). The rule is intended to prevent abuses associated with including diverse legislation in one act (see Sramek, State Statutes: The One-Subject Rule Under the 1970 Constitution, 6 J. Marshall L.Rev. 359, 359-60 (1973)). Illinois courts have spent considerable effort to read the term subject (see, e.g., Dee-El Garage, Inc. v. Korzen (1972), 53 Ill.2d 1, 289 N.E.2d 431) so as to square the command with its object. The command is not a literal one: so long as the provisions of a bill are germane to the accomplishment of the purpose of the enactment, the limitation is satisfied. ( Dee-El Garage, 53 Ill.2d at 9-10, 289 N.E.2d 431.) Nor is it absolute: unlike the version contained in the 1870 Constitution, the limitation in our modern constitution exempts certain bills from the requirement that all bills be confined to one subject. (Ill. Const. 1970, art. IV, § 8(d).) Relevant here, exempted are bills for appropriations and bills for the    revision    of laws. Ill. Const. 1970, art. IV, § 8(d). The Second Emergency Budget Act is neither. The act's first six sections are the new provisions. Of those, two are operative, empowering and directing State agencies to create contingency reserves for 1992 from funds formerly made available for agency use. (Pub. Act 87-838, §§ 15(a), (e), 20, eff. January 24, 1992.) The rest, and by far the great majority of the measure, is given to amending one or more sections of 39 separate acts. The amendments are of seven types: (1) permitting transfer of moneys to either the general revenue fund or the General Obligation Bond Retirement and Interest Fund (Pub. Act 87-838, §§ 110, 135, 140, 150, 155, 165, 170, 175, 180, 185, 190, 195, 200, 205, 210, 215, 220, 225, 230, 235, 240, 250, 260, 270, 290, eff. January 24, 1992); (2) directing transfers to the general revenue fund alone (Pub. Act 87-838, §§ 100, 105, 190, 225, 230, 270, 275, 285, eff. January 24, 1992); (3) validating a July 1991 order of the Governor making such transfers (Pub. Act 87-838, § 225, eff. January 24, 1992); (4) prohibiting, from February through June 1992, normally permitted transfers from the general revenue fund (Pub. Act 87-838, §§ 245, 246, 247, 248, eff. January 24, 1992); (5) reducing required reserves in the school budget and permitting the reduced amount to be appropriated for any use (Pub. Act 87-838, § 253, eff. January 24, 1992); (6) empowering departments of State government to implement the contingency reserves called for in the act (Pub. Act 87-838, §§ 110, 115, 120, 130, 275, 280, eff. January 24, 1992); and (7) reducing or increasing the amount of available grants in view of those reserves (Pub. Act 87-838, § 255, eff. January 24, 1992). Although the Second Emergency Budget Act certainly affects appropriated funds, it does not, like a true appropriations measure, authorize the expenditure of public moneys (Black's Law Dictionary 102 (6th ed. 1990)), for programs enacted through substantive legislation (see Board of Trustees of Community College District No. 508 v. Burris (1987), 118 Ill.2d 465, 477-78, 113 Ill.Dec. 937, 515 N.E.2d 1244, quoting Illinois Municipal Retirement Fund v. City of Barry (1977), 52 Ill.App.3d 644, 646, 10 Ill.Dec. 439, 367 N.E.2d 1048 (stating that an appropriation involves the setting apart from public revenue a certain sum of money for a specific object)). True appropriations bills simply list, usually item by item, a specific amount of money payable for a specific use from a named source. (See, e.g., People ex rel. Kirk v. Lindberg (1974), 59 Ill.2d 38, 41, 320 N.E.2d 17 (summarizing the provisions of such bills to include appropriations for personal services, contractual services, commodities and the like).) Normal appropriations mark the end of the legislative process. See Colorado General Assembly v. Lamm (Colo. 1985), 704 P.2d 1371, 1380. The Second Emergency Budget Act makes funds already appropriated for specific uses available for the more general one of balancing the State budget. It actually operates in reverse of an appropriations measure: moneys marked for special concerns are funnelled back to the general revenue fund. Incidentally, were the act a true appropriations measure, it would be in danger of violating a different constitutional prohibition because it could not be used to amend substantive legislation. Ill. Const. 1970, art. IV, § 8(d); see Benedict v. Polan (1991), 186 W.Va. 452, 413 S.E.2d 107. The Second Emergency Budget Act fares no better under the exemption for bills for the revision of laws although, as it is, in part, an amendatory measure, it necessarily revises laws. (See Black's Law Dictionary 1187 (6th ed. 1990) (defining revise, in part, as [t]o go over a thing for the purpose of amending   ; as, to revise statutes).) Simply, the exemption must contemplate more than mere inclusion of amendatory provisions in a bill. If that were not the case, the limitation of the single-subject rule would be easily avoided where any bill contained at least one such provision. Similar legislation was struck down in Fuehrmeyer v. City of Chicago (1974), 57 Ill.2d 193, 311 N.E.2d 116. That legislation was designed to give the State exclusive regulatory power over the licensing of certain professions. The operative provision empowering the State was followed by enumeration of the separate acts there amended. (See Fuehrmeyer, 57 Ill.2d at 195, 311 N.E.2d 116.) This court invalidated the act, in part, in view of the single-subject rule, after rejecting the notion that the act constituted a revision of law. See Fuehrmeyer, 57 Ill.2d at 202, 311 N.E.2d 116. Like the act in Fuehrmeyer, the Second Emergency Budget Act operates, in dominant part, by similarly amending numerous separate acts to achieve an objective larger than the objective of any one of them. In Fuehrmeyer, the goal was empowering the State to control licensing. Here, it is balancing the State budget. Such bills are not saved from the strictures of the single-subject rule. Were it otherwise, a generally stated scope of legislative objective would be sufficient to displace the constitutional limitation. That, by the way, is the key to understanding the exemption for bills that revise law. It is not enough that amendments contained in legislation be germane to a common objective; the amendments must also be interrelated for that purpose. The common objective of the amendments contained in the Second Emergency Budget Act is to free revenue to balance the State budget. Each amendment can be said to be germane to that end. But the amendments, the heart of the act, are not otherwise interrelated. Those provisions are instead related to the other provisions contained in the 39 separate acts in which the preamended provisions are found. See Fuehrmeyer, 57 Ill.2d at 203, 311 N.E.2d 116. For those reasons, I believe the Second Emergency Budget Act violates article IV, section 8(d), of this State's constitution, which requires all bills to be confined to one subject. And because the legislation is constitutionally deficient on its face, it, as well as the transfer effected by it, are void. The Transfer of Pension Fund Moneys The ability to transfer pension fund moneys was created through several amendments to the State Finance Act (Ill.Rev.Stat.1991, ch. 127, par. 141), one of the 39 measures affected by the Second Emergency Budget Act. Section 5 of the State Finance Act had been amended under the First Emergency Budget Act to permit the Governor to transfer from special funds in the State Treasury up to $50 million to the general revenue fund until July 1992 (Pub. Act 87-14, § 2-18(d), eff. July 24, 1991), the State Pensions Fund (Ill.Rev.Stat.1991, ch. 127, par. 144.12) being one such special fund (Ill.Rev.Stat. 1991, ch. 127, pars. 141(a), 141.54). Further amendment of section 5 under the Second Emergency Budget Act relaxed the earlier restrictions on such transfers in view of a legislative declaration that excess moneys existed in the special funds. Pub. Act 87-838, § 5, eff. January 24, 1992; Pub. Act 87-838, § 270, eff. January 24, 1992. In addition, section 8.12 of the State Finance Act (Ill.Rev.Stat.1991, ch. 127, par. 144.12) was amended to permit pension fund moneys to be transferred to the general revenue fund notwithstanding any restriction on the use of the State Pensions Fund. (Pub. Act 87-838, § 270, eff. January 24, 1992.) The Comptroller and Treasurer were specifically directed to effectuate a transfer of up to $21 million to the general revenue fund on February 1, 1992. Pub. Act 87-838, § 270, eff. January 24, 1992. In affecting funds designated for reducing the unfunded liability of the systems, the concern is that the transfer impaired constitutionally protected pension benefits or contract rights. That challenge is narrower than the constitutional challenge to the Second Emergency Budget Act on the whole. Even so, as alluded to above, the question of impairment is common to both the issue of the transfer and the alleged overall underfunding of the systems, the subject of pending litigation. A concern, then, is whether an analysis of the transfer against impairment protections might taint resolution of issues in the pending litigation. But even the majority realizes that the propriety of the transfer and the alleged overall underfunding present different concerns. In fact, the Pension Code, not the State Finance Act, lies at the root of the pending litigation. (See Ill.Rev.Stat.1991, ch. 108½ pars. 2-124 (General Assembly), 14-131(f) (State employees), 16-158(b) (teachers), 18-131(2) (judges) (all amended by Pub. Act 86-273, § 1, eff. August 23, 1989); Ill.Rev.Stat.1991, ch. 108½, par. 15-155(a) (State universities) (amended by Pub. Act 86-1034, § 1 eff. March 2, 1990; Pub. Act 87-794, § 1, eff. November 19, 1991).) In short, that the issues may be resolved, in part or whole, against the same constitutional provisions is no impediment to resolution of the transfer's propriety now. Several further observations are necessary. This State's constitution provides, in article XIII, section 5: Membership in any pension or retirement system of the State    shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired. (Ill. Const. 1970, art. XIII, § 5.) Implicated here is the protection against impairment, rather than the protection against diminution, as plaintiffs have yet to actually receive any benefits. The protection against impairment of State pension benefits is co-extensive with the protection afforded all contracts under article I, section 16, of the constitution. (Ill.Ann.Stat., 1970 Const., art. XIII, § 5, Constitutional Commentary, at 302 (Smith-Hurd 1971); see generally Buddell v. Board of Trustees, State University Retirement System (1987), 118 Ill.2d 99, 102, 112 Ill.Dec. 718, 514 N.E.2d 184.) But to avoid rendering the general impairment-of-contracts provision surplusage where State pensions are concerned, that general provision's scope cannot include protection afforded membership in the systems here. The drafters intended the protection afforded by our constitution to parallel that afforded under the constitution of New York. (See N.Y. Const., art. 5, § 7; Kraus v. Board of Trustees of the Police Pension Fund (1979), 72 Ill.App.3d 833, 843, 28 Ill.Dec. 691, 390 N.E.2d 1281.) Given the parallel construction, New York case law has proved a ready aid in determining the scope of protections afforded under our own constitutional provision. ( Buddell v. Board of Trustees, State University Retirement System (1987), 118 Ill.2d 99, 106-07, 112 Ill.Dec. 718, 514 N.E.2d 184; see also Kraus, 72 Ill.App.3d at 844-45, 28 Ill.Dec. 691, 390 N.E.2d 1281.) New York courts have consistently interpreted the protections to shield the source of funds for benefits not yet realized. See Kraus, 72 Ill.App.3d at 844, 28 Ill.Dec. 691, 390 N.E.2d 1281, quoting Birnbaum v. New York State Teachers Retirement System (1958), 5 N.Y.2d 1, 8-9, 152 N.E.2d 241, 245, 176 N.Y.S.2d 984, 989; Sgaglione v. Levitt (1975), 37 N.Y.2d 507, 511-12, 337 N.E.2d 592, 594, 375 N.Y.S.2d 79, 82-83 (specifically extending protection to reserve funds required to be maintained under retirement schemes). Admittedly, the language of our own constitution's provision differs slightly from that of New York. The contractual relationship arising from State pensions here is made enforceable. No such mention is made in the New York provision. But, if a relationship entails duties and obligations attendant a contractual one, it must be subject to judicial enforcement, that being an elemental feature of all contracts. Our constitution merely makes plain what must be implied in the New York provision. The difference in no way prevents the same construction New York courts have given the scope of the protections there afforded from applying here. The contract clause of the Federal Constitution, of course, remains a separate basis upon which to analyze the transfer's propriety. (See U.S. Const., art. I, § 10; United States Trust Co. v. New Jersey (1977), 431 U.S. 1, 17, 52 L.Ed.2d 92, 106, 97 S.Ct. 1505, 1515.) I am, however, unaware of any material difference between the contract clause and the protection afforded under our own constitution. In fact, the primary reason the drafters of our constitution elevated pension membership to contract status was simply to eliminate distinction between mandatory and optional participation plans. Buddell, 118 Ill.2d at 102, 112 Ill.Dec. 718, 514 N.E.2d 184. Finally, I am aware that, as it is a special fund, the General Assembly has authorized itself to discontinue[] the State Pension Fund, in which case the moneys are to be transferred to the general revenue fund. (Ill.Rev.Stat.1991, ch. 127, par. 141(b) (also effecting a transfer based on the inactivity of any special fund for 18 months or longer).) That, however, is of no help in answering the impairment question in light of the specific constitutional protection afforded pension plan membership. The fund has never been discontinued, and so no opportunity has arisen to explore the constitutional legitimacy of such action. (See United States Trust Co. v. New Jersey, 431 U.S. at 24, 52 L.Ed.2d at 111, 97 S.Ct. at 1518-19 (noting that, [whatever the propriety of a State's binding itself to a future course of conduct in other contexts, the power to enter into effective financial contracts [protected under the contract clause] cannot be questioned).) That an act purports to allow discontinuance of the fund does no more to immunize the transfer from constitutional attack than does the fact that the transfer itself was borne of legislation. Although the transfer presents a question of first impression here, other States have considered the same issue. (See Dadisman v. Moore (1988), 181 W.Va. 779, 384 S.E.2d 816; Valdes v. Cory (1983), 139 Cal.App.3d 773, 189 Cal.Rptr. 212; Weaver v. Evans (1972), 80 Wash.2d 461, 495 P.2d 639; see also Singer v. City of Topeka (1980), 227 Kan. 356, 607 P.2d 467, Allen v. City of Long Beach (1955), 45 Cal.2d 128, 287 P.2d 765.) In the most analogous case, the Supreme Court of West Virginia held that a transfer to the general revenue fund of matching State funds appropriated for a public employees' retirement program was an impairment of contract against the test set out in Allied Structural Steel Co. v. Spannaus (1978), 438 U.S. 234, 57 L.Ed.2d 727, 98 S.Ct. 2716. ( Dadisman, 181 W.Va. at 790, 384 S.E.2d at 827, quoting Wagoner v. Gainer (1981), 167 W.Va. 139, 154-55, 279 S.E.2d 636, 645-46.) Pension participants, it was reasoned, have a vested interest in the integrity and security of the funds to pay future benefits notwithstanding that the legislative action may not have resulted in out-of-pocket losses. Dadisman, 181 W.Va. at 791, 384 S.E.2d at 828 (citing Valdes, 139 Cal.App.3d 773, 189 Cal. Rptr. 212, Weaver, 80 Wash.2d 461, 495 P.2d 639, and Dombrowski v. City of Philadelphia (1968), 431 Pa. 199, 245 A.2d 238, and rejecting Kosa v. Treasurer (1980), 408 Mich. 356, 292 N.W.2d 452 (drawing distinction between the right to receive pension benefits and the funding method adopted to assure the availability of moneys to pay benefits)); see generally Sgaglione, 37 N.Y.2d at 512, 337 N.E.2d at 594, 375 N.Y.S.2d at 83. The United States Supreme Court has long held that the contract clause of the Federal Constitution limits the power of the States to modify their own contracts. ( United States Trust Co. v. New Jersey, 431 U.S. at 17, 52 L.Ed.2d at 106, 97 S.Ct. at 1515.) But because the clause does not prohibit, generally, a State from amending statutes, the Court has observed a need to determine, first, whether what is arguably impaired is a contractual obligation. ( United States Trust Co. v. New Jersey, 431 U.S. at 17, 52 L.Ed.2d at 106, 97 S.Ct. at 1515.) Reason for such concern does not exist here, for membership in the pension systems is, as pointed out above, specifically granted contractual status under our constitution. The concern then becomes whether the transfer was a substantial impairment not otherwise justified by use of this State's reserved power as sovereign to safeguard the welfare of its citizens. Allied Structural Steel Co., 438 U.S. at 244-45, 248-49, 57 L.Ed.2d at 736-37, 739, 98 S.Ct. at 2722-23, 2724; United States Trust Co. v. New Jersey, 431 U.S. at 21, 25, 52 L.Ed.2d at 109, 112, 97 S.Ct. at 1517, 1519. There is, however, one other facet of the reserved-powers doctrine where a State's own contract is at issue, as here: a State cannot contract away an essential attribute of its sovereign power. ( United States Trust Co. v. New Jersey, 431 U.S. at 23, 52 L.Ed.2d at 110, 97 S.Ct. at 1518.) For that reason, a State's power to create irrevocable contract rights is of concern. ( United States Trust Co. v. New Jersey, 431 U.S. at 23, 52 L.Ed.2d at 110, 97 S.Ct. at 1518.) But States are regularly held to their debt contracts, the Court recognizing that mere financial obligations do not compromise reserved powers. United States Trust Co. v. New Jersey, 431 U.S. at 24-25, 52 L.Ed.2d at 111, 97 S.Ct. at 1519. In fact, the usual deference to any legislative assessment of the reasonableness and necessity of an impairment is not even appropriate when a State's financial self-interest is at stake. ( United States Trust Co. v. New Jersey, 431 U.S. at 26, 52 L.Ed.2d at 112, 97 S.Ct. at 1519.) The reason: contract clause protection would evaporate in the face of a legislative declaration that an important public purpose justified reduction of the State's financial obligations. ( United States Trust Co. v. New Jersey, 431 U.S. at 26, 52 L.Ed.2d at 112, 97 S.Ct. at 1519.) That is to say, the need for money is simply no excuse for affecting a State's contractual obligations. See Lynch v. United States (1934), 292 U.S. 571, 580, 78 L.Ed. 1434, 1441, 54 S.Ct. 840, 844. The amendment effectuating the transfer here substantially impaired pension benefits. If this State's constitutional provision is to have meaning in the here and now, it must include, as the West Virginia Supreme Court similarly reasoned, protection of pension source moneys. Of those source moneys, a full $21 million was permanently affected by the transfer. That the funds cannot be restored to the systems, as the record indicates, is little reason to ignore the impairment caused by the transfer under both article XIII, section 5, of the Illinois Constitution and the contract clause of article I, section 10, of the United States Constitution. Ill. Const. 1970, art. XIII, § 5; U.S. Const., art. I, § 10. As important as balancing the State budget is, what this State's constitution requires in that regard is not to be elevated above concern for impairing pension benefits. The inability to meet what one provision of the constitution mandates provides no excuse to violate another. Nor can the legislative finding that excess moneys existed in the special fundsan excess, it must be remembered, recognized only after plaintiffs challenged the First Emergency Budget Actlegitimize the impairment. As noted above, legislative findings (see generally Donovan v. Holzman (1956), 8 Ill.2d 87, 96, 132 N.E.2d 501) count for nothing if used as means merely to avert constitutional protections in furtherance of the State's self-interest (see Sanelli v. Glenview State Bank (1985), 108 Ill.2d 1, 27, 90 Ill.Dec. 908, 483 N.E.2d 226; United States Trust Co. v. New Jersey, 431 U.S. at 25-26, 52 L.Ed.2d at 111-12, 97 S.Ct. at 1519). And, though I remain skeptical such excess ever existed, that fact, too, is immaterial. The Governor and General Assembly could always find a use for extra money to balance the budget, especially when the alternative is raising taxes at the expense of angering the electorate. (See United States Trust Co. v. New Jersey, 431 U.S. at 26, 52 L.Ed.2d at 112, 97 S.Ct. at 1519.) But protection of pension benefits under our constitution and the contract clause of the Federal Constitution would mean little at all were such a declaration of excess reason to impair this State's financial obligation to the pension systems. ( See United States Trust Co. v. New Jersey, 431 U.S. at 26, 52 L.Ed.2d at 112, 97 S.Ct. at 1519.) I note, as an interesting post-script on the point, that this court acknowledged in its 1993 annual report to the General Assembly (see Ill. Const. 1970, art. VI, § 17) that the Auditor General has warned of continued deterioration of the pension systems' assets and implored the legislature to address the problem. Unfortunately, both for plaintiffs' immediate interests as well as the constitutional jurisprudence of this State, the majority ignores, even in the face of that acknowledgment, an absence of public interest to resolve the issues the parties briefed and argued. HARRISON, J., joins in this partial concurrence and partial dissent.