The Illinois Supreme Court will decide whether Illinois taxpayers can sue the state over the question of whether Illinois lawmakers violated the state constitution by borrowing funds to simply fund state worker pensions or pay down past due bills.
Last month, the state high court agreed to take up an appeal from Gov. JB Pritzker of an Illinois appeals court’s ruling, to let such a taxpayer action continue.
In appealing the decision, the Illinois Attorney General’s office, representing Pritzker and the state, argued the Illinois Supreme Court must kill the lawsuit now, rather than let the plaintiffs present their case and move the lawsuit through the courts, to preserve the ability of the state to manage its finances.
Illinois Attorney General Kwame Raoul
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“Here, the normal considerations supporting adherence to the general policy of avoiding a decision on a constitutional issue are outweighed by the public interest in resolving this issue promptly, and definitively, for the benefit of the State and all its residents,” the attorney general’s office wrote in Pritzker’s petition, filed with the Supreme Court in September.
“Whether the State may issue long-term debt for purposes other than capital projects is an issue that will certainly recur and is critically important to the State’s fiscal management.”
The petition was signed by Assistant Illinois Attorney General Richard S. Huszagh, on behalf of Illinois Attorney General Kwame Raoul and Solicitor General Jane E. Notz.
The petition was filed about a month after a three-justice panel of the Illinois Fourth District Appellate Court in Springfield ruled that John Tillman, CEO of the Illinois Policy Institute, should be allowed his day in court to argue the state had violated its own constitution when it twice issued state bonds in the past 17 years.
Tillman, of suburban Golf, had filed a petition in 2019 in Sangamon County court in Springfield, seeking permission to sue the state to block the state government from continuing to pay off $14 billion of so-called general obligation bonds issued in 2003 and 2017.
The complaint centered on Article IX Section 9(b) of the Illinois state constitution. Tillman argued that provision of the state constitution limits the state’s ability to borrow money.
The complaint particularly focuses on text requiring lawmakers to identify “specific purposes” for debt when issuing new long-term bonds. Tillman argues that “specific purposes” clause should be read to forbid state lawmakers from borrowing money to simply finance deficits and “plug holes” in the state’s budget,” such as the shortfalls faced by the state when funding such obligations as public worker pensions.
Tillman argued lawmakers in both 2003 and 2017 failed to identify “specific purposes” when it issued bonds, and then unconstitutionally assigned to the state comptroller the power to decide how the borrowed money was spent.
Tillman’s arguments have been ridiculed by state lawyers, who assert lawmakers have satisfied the “specific purposes” requirement by merely generally saying what the money was to be spent on, even if the money was borrowed simply to pay for regular operations that would ordinarily be funded from tax proceeds. They’ve said state lawmakers should be allowed to borrow money for any reason.
In 2003, the bonds were used to pay worker pensions.
In 2017, bonds were issued to help the state pay down a backlog of unpaid bills worth billions.
Under state law and court rules, Tillman cannot simply file suit against the state, but must secure court permission to bring his lawsuit.
A Sangamon County judge denied that permission, saying he believed Tillman’s suit was “frivolous or malicious,” siding with the state which asserted the legal action was “legally insufficient on its face.”
In his ruling, however, Sangamon County Judge Jack Davis went further, declaring the state bond issues were constitutional because lawmakers provided a sufficient explanation.
On appeal, the Fourth District said Judge Davis had been too hasty in dismissing the action.
“Tillman’s complaint sets forth a colorable reading of the Illinois Constitution that does not appear to be frivolous on its face,” Justice Robert J. Steigmann wrote in the August opinion. While we express no opinion on the ultimate merits of Tillman’s claims, we conclude that the petition and complaint state reasonable grounds for filing suit.”
The state attorneys, however, took issue with the appeals court’s conclusion, saying the decision conflicts with prior Illinois Supreme Court decisions and will wrongly allow a “legally insufficient” lawsuit to move forward against the state.
They asked the high court to shut the case down.
In a reply brief filed on Nov. 5, lawyers for Tillman asked the Illinois Supreme Court not to take up the case. They said Supreme Court review at this point would be “premature.”
Attorney John E. Thies, of the firm of Webber & Thies P.C., of Urbana, said the prior Supreme Court rulings only required the trial courts to determine if the lawsuit was “frivolous or malicious” or was “otherwise unjustified” – not to rule on the merits of the lawsuit.
“Nothing in the Fourth District’s opinion even suggests that Tillman’s claim is legally insufficient,” Thies wrote. “And the Fourth District never held that a ‘legally insufficient claim’ should proceed.
“To the contrary, it held – in line with this Court’s precedent – that a taxpayer petition does not require a merits evaluation, and that the Complaint met the applicable standard.”
They argued the Supreme Court cannot rule on the case at this point, because the facts of the case remain in dispute.
“… Any such disputes must be resolved in the lower courts,” Thies wrote. “And this Court (the Illinois Supreme Court) would be resolving an issue – the merits of Tillman’s complaint – that the (Fourth District) court itself declined to decide.”
Tillman’s lawyers said more court proceedings were needed to answer key questions, such as how the state actually used the bond money, and whether the state comptroller’s office – a member of the state’s executive branch – improperly decided how to spend state money, a task assigned by the state constitution to the General Assembly.
“… In light of the Complaint’s allegations, the court could hold the laws unconstitutional without discovery (based on deficiencies on the face of the authorizing laws), but it cannot hold them constitutional without discovery (to show, for example, that no improper delegation occurred despite apparent deficiencies in the face of the law),” Thies wrote.
The Illinois Supreme Court granted the state’s petition for leave to appeal on Nov. 18. Briefs are due in the case over the coming weeks, and the court could take up the case this March, according to a spokesman for the court.