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An Illinois appeals court will soon be asked to decide if state lawmakers can be challenged for allegedly unconstitutionally taking on billions of dollars in debt, ostensibly to fund Illinois state worker pensions and pay health care vouchers.
This fall, lawyers on both sides will file briefs in the Illinois Fourth District Appellate Court in Springfield dealing with that question.
While those arguments will touch on a range of legal topics, they will likely hammer one particular point: Whether a Springfield judge, and seemingly other judges before him, were correct in determining taxpayers can’t look to the courts to determine whether the state constitution places any real limits on what lawmakers can do with tax dollars. Or whether a debate over what the constitution says deserves a more full day in court.
Earlier this month, Sangamon County Associate Judge Jack D. Davis II denied the petition brought by plaintiffs John Tillman and investment fund Warlander Asset Management to be allowed to sue Illinois’ state government over the state’s issuance and payment of $14 billion in bonds.
Tillman, of suburban Golf, is CEO and former president of the Illinois Policy Institute in Chicago. He filed the petition in his individual capacity, as a taxpayer.
Warlander is an investment firm based in New York. Warlander holds $25 million in state bonds, according to court documents.
The complaint centered on whether lawmakers violated the Illinois state constitution in 2003 and again in 2017 when the state issued the so-called general obligation bonds. In the legislation authorizing the bonds, lawmakers stated the bonds had “specific purposes,” including funding pension obligations to state public workers and retirees, and allegedly paying unpaid bills, including so-called “vouchers” billed to the state by social service agencies and health care providers.
However, in their complaint, Tillman and Warlander said those purposes aren’t specific enough to satisfy the rules for taking on new state debt spelled out in Illinois’ state constitution.
In the petition, the plaintiffs zero in on Article IX Section 9(b) of the Illinois state constitution, which allows the state to take on debt “for specific purposes,” so long as the General Assembly approves the measure by a three-fifths vote. The provision requires those “specific purposes” to be identified in any law authorizing the bond issuance.
In the petition, Tillman and Warlander point to discussions recorded in the official transcript of the constitutional convention they say show delegates considered those “specific purposes” to actually mean capital improvements, such as roads, bridges and buildings, and not “continual deficit financing” of state spending.
Tillman and Warlander assert that should mean the 2003 and 2017 bond issues are unconstitutional and should not be repaid.
The state opposed the Tillman/Warlander petition, ridiculing the petition as a “policy paper masquerading as a complaint.” They said the “specific purposes” language was vague, and allows state officials to issue long-term debt for any reason, as long as a reason is stated in the law and the law authorizing the bonds is approved by a three-fifths vote.
Under the law setting up the petition process, Judge Davis needed to determine if Tillman and Warlander could continue with the lawsuit or not. Rather than limit his decision to just that question, Davis went further, agreeing with the state’s position entirely on the constitutionality of the bond issues, and even borrowing the state’s language in lampooning the petition.
However, the judge went further still, potentially short circuiting any further challenges to the state’s bonding authority on constitutional grounds, by declaring the entire question a “non-justiciable political question.” Essentially, that finding declared the judge did not believe the court even had the power under the state constitution to determine if lawmakers are abiding by the state constitution when they issue bonds.
The decision drew sharp criticism from some observers, who believed the judge owed it to the people of the state and current and future bondholders to allow the complaint to be fully argued in court and decided with a comprehensive, written decision laying out the legal reasons why the state’s bonds were actually constitutional.
Mark Glennon, a former corporate attorney who founded and serves as editor of policy-analysis site Wirepoints, said Davis’ decision “ducked” the issue altogether, using the “political question” doctrine as a “wild card” to allow the status quo to hold and telling the plaintiffs to “buzz off.”
Glennon said he does not believe Tillman and Warlander’s potential lawsuit would be easily won.
But he said the judge’s reasoning represents a “terrible precedent” for any arguments state lawmakers are bound by the Illinois constitution’s provisions limiting borrowing and requiring lawmakers to balance the state budget.
“If allowed to stand, the precedent would effectively mean there’s no limitation on borrowing to pay current expenses and that the balanced budget provision means exactly nothing,” Glennon said, adding:
“The judge seemed to have no understanding of the fundamental principle that it’s the judiciary’s role to invalidate laws that are unconstitutional.”
POLITICAL QUESTION DOCTRINE
From the country’s birth, U.S. courts have routinely handled thorny cases, often pitting competing constitutional and legal texts against each other as citizens and others challenged acts of Congress, the President and the states.
Early on in U.S. history, the U.S. Supreme Court delivered the decision known as Marbury v Madison, which established the courts’ claims to act as arbiters of constitutional texts and, if necessary, strike down laws passed by Congress or state legislatures, as well as executive decisions from the President or governors, should those decisions conflict with a court’s interpretation of the U.S. Constitution or a particular state constitution.
However, at times, the courts have decided to step aside on some challenges, invoking the so-called political question doctrine. In such a holding, a court would declare the separation of powers that characterizes American government bars judges from stepping into matters better left to lawmakers, executives or to voters.
In recent years, however, that doctrine has come under scrutiny.
In 2012, for instance, in Zivotofsky v Clinton, the U.S. Supreme Court overturned a lower court’s invocation of the political question doctrine in a dispute that touched on national security and foreign affairs. In that case, a Jewish couple wished to record the birthplace of their son as Jerusalem, Israel, on the child’s birth certificate, a request opposed by the U.S. State Department despite a law passed by Congress explicitly allowing the family to do so. An 8-1 majority held the presence of the text in the law made the matter a judicial question, not a political question.
On remand, an appeals court and the Supreme Court in 2015 determined the law was unconstitutional as an infringement on the president’s power.
In Illinois, the state Supreme Court has not shied away from wading into the center of the state’s fiscal issues. The court has ruled repeatedly that neither political consequences nor overwhelming majorities among lawmakers should matter when evaluating any attempt to reform state worker pensions, which the court has held are invalid in light of the state constitution’s so-called pensions clause, which declares public worker pensions cannot be “diminished or impaired.”
In one of the most prominent of those decisions, in 2015, the state Supreme Court rejected the state’s arguments its pension reform measures passed constitutional muster under the state’s so-called “police powers,” to protect the people of Illinois in times of crisis and emergency.
In that unanimous opinion, Justice Lloyd A. Karmeier chided lawmakers at the time for taking such “drastic” reform measures, merely to forestall raising taxes or making adjustments to the state’s pension liabilities. Karmeier and the other justices noted the so-called pension crisis was caused by a historical pattern by lawmakers to choose to spend elsewhere the money which otherwise could have gone to deal with unfunded pension liabilities.
If the court granted the ability to reform pensions under the police powers doctrine, Karmeier said, there would be no end to the General Assembly’s use of the doctrine.
“It is our obligation … to ensure that the law is followed,” Karmeier wrote. “That is true at all times.”
PROPER FORUMS, SPECIFIC LANGUAGE
However, in other instances, courts have found the language of the state constitution less compelling.
More than a year before Judge Davis delivered his decision, a Cook County judge dismissed a lawsuit brought by a coalition of road builders and contractors against the county over its use of transportation tax money.
In that case, the road builders claimed the county’s funding decisions violated the newly enacted Illinois state constitution provision requiring the state and local governments to spend transportation-related taxes on Illinois transportation projects and agencies.
However, in his decision, Cook County Circuit Judge Peter Flynn said the so-called Safe Roads Amendment doesn’t require the county to spend the money on road construction or any other transportation project.
While not invoking the political question doctrine directly, Judge Flynn said his court could not tell the county how to spend the tax money.
“The proper recourse for the relief plaintiffs seek here … is ‘in a legislative forum rather than in the courts,’” Flynn wrote.
The road builders have appealed that decision to the Illinois First District Appellate Court in Chicago. In briefs filed in that case, the road builders challenge Cook County’s interpretation of the Safe Roads Amendment, saying it ignores the “plain language” of the constitutional text.
In a brief filed Sept. 5, attorneys for the road builders argue it would “truly be absurd” to exempt the county or any other unit of government in Illinois from the text of the constitution, simply because “it limits the County’s power to spend ‘its’ money as it sees fit.”
John Fitzgerald, an attorney with the firm of Tabet Divito & Rothstein in Chicago, who is representing the road builders in that dispute, confirmed his clients are appealing the judge’s decision to essentially exempt the county from following “very specific language in the state constitution.”
“It is very clear and unambiguous, in the amendment, of what is a transportation tax and how it can be used,” Fitzgerald said.
However, Fitzgerald sought to distinguish those claims from those brought by Tillman and Warlander, saying he believed the “specific purposes” language cited by Tillman/Warlander in Section 9(b) is more vague.
“The challenge faced by Mr. Tillman is finding constitutional language that prohibits the state from incurring debt for the purposes that he believes are improper,” Fitzgerald said.
Glennon generally agrees Tillman/Warlander would have a difficult task ahead. However, he said Judge Davis’ quick decision never provided any opportunity to fully develop their arguments over the constitution’s language and its requirements.
“That’s not to say I think the plaintiffs should ultimately win,” Glennon said. “I wouldn’t know that without seeing the case properly filed and briefed, which is the point. The judge should want that, too.
“It’s in everybody’s interest, including the municipal bond community, to have courts lay out clear interpretations in reasoned opinions. This court shirked that duty.”