The Fifth District Appellate Court heard oral arguments on June 13 in two consolidated appeals stemming from Gov. Bruce Rauner’s declaration that negotiations with the American Federation of State, County and Municipal Employees (AFSCME) have reached impasse and that workers’ contracts have expired.
The appeal specifically addresses St. Clair County Circuit Judge Robert LeChien’s order preserving the status quo for state workers.
For two years, the state has operated without an approved budget, which has resulted in labor-related legal actions in Chicago,Springfield and Belleville. The last approved state budget expired on June 30, 2015;collective bargaining agreements between the state and its unions expired on the same date.
As the end of another fiscal year approaches, lawmakers still struggle to approve a budget.
In order to preserve their normal payroll, the unions sued Rauner in St. Clair County.
LeChien ordered a preliminary injunction requiring state workers be paid in the absence of a budget.
Rauner is now asking the appellate court to reverse LeChien’s order in regards to both the expired contracts dispute and the budget impasse dispute.
Assistant Attorney General Brett Emerson Legner presented oral arguments for Rauner, arguing that the fundamental importance of the appropriation clause in the Illinois constitution is to provide the general assembly with the task of making appropriations for all expenditures, not the court.
Legner alleges the appropriation clause is a “legislative check on government fraud and corruption and executive extravagance.”
He said tooling agreements extend the same rights as the collective bargaining agreements, or CBAs.
Legner argues that the court order does not provide specific sums to be paid to employees, calling it a blank check.
He said that only the General Assembly has the “exclusive and non-delegable power” to determine how much money is spent on employee pay.
An appellate justice then questioned how his arguments would impact employees in the attorney general’s office.
“Not favorably,” he said.
“So you wouldn’t be paid?” she questioned.
“I would not be paid,” he responded. “I would almost certainly not be paid. That is true.”
“Well I ask that because you waited almost a year to bring this appeal, and I’m wondering if you were preparing the case within that year or, you know, I know that laches doesn’t apply but you did sit on your hands. How do you explain that?” the justice asked.
Legner said the general assembly and the governor enacted a partial budget in June 2016, leading the attorney general’s office to believe the “impasse is breaking and the other branches of government are doing, do their constitutional job.”
However, at the turn of the year, there was no new movement. He said they went back to court a few weeks later when they realized the impasse wasn’t lifted.
“And so I do not think this is an example of sitting on one’s hands. I think this is an example of trying to give the general assembly and the executive the opportunity to fulfill their role, to do what they were elected to do. And once it became apparent at the expiration of the partial budget that that wasn’t happening, we went back into court,” he said.
“Certainly, that’s not a preferred course of action, but looking at all the facts and the desire to hope that the Constitutional government actually operates as it’s intended to do, to wait and see if that process would happen. It didn’t so we came to court,” he added.
Steven Yokich represented the union and asked the appellate court to keep LeChien’s injunction in place.
“I think the lower court did a good job,” he said.
Yokich argues that the appellate court was “very firm” when it decided that once the plaintiffs could show a fair chance on merits, the rest of the case presented a compelling reason to uphold the temporary restraining order.
He said that the state negotiated an agreement between the executive and the union granting unions the right to spend a certain amount of money on personal services.
Just because the appropriations aren’t there, the obligation to pay them still is.
“My argument is very simple,” he said. “If your employer asks you to work and you work, then you are entitled to get paid.”
“Even if there’s no contract in place, there’s been an impairment to your rights to be paid,” he added.
Yokich said no one knew what was going to happen when the AFSCME brought the complaint, but “now we know that the executive officers of this state intend to require their employees to work” even when there is no appropriations to their office.
He argued that if the appellate court were to reverse LeChien’s order, the state would have to implement a plan to decide what employees are essential.
Legner countered by saying there “absolutely are” essential employees with core services.
He was asked where an exception existed saying essential employees must come to work and not be paid. He was also asked why anyone would come to work if they knew they weren’t going to be paid.
Legner said that at some point there would have to be a determination on essential services, but that question is not before the court.
“If they want to amend the complaint and make it an essential services complaint, I can’t stop them,” he said.
“What’s before the court is a very narrow issue. And that narrow issue boils down to two things. One: Section 996 is not an appropriation because court decrees cannot be legislative appropriations. It has to be the setting aside of a specific sum for a certain purpose, for a certain, um, by the general assembly. A court decree does not function as that.
“Additionally, and finally, the tolling agreement continues the very same rights as the CBAs of which there is no doubt they were subject to appropriation. It makes no sense as a matter of law to say that the multi-year CBAs are subject to legislative appropriations but when they expire, the executive and unions can do an end run-around the general assembly and enter into an agreement that’s not subject to appropriation,” he said.
One justice concluded the first half of oral arguments by asking Legner, “Is it the position of the Attorney General that if there is no appropriations, then the employee does not get paid? Is that the simple sum of what you are arguing?
Legner said, “It’s not quite that easy.”
“Give me just a short line of what you are arguing,” the justice responded.
“The failure of the General Assembly to enact annual appropriations legislation cannot impair state contracts because those contracts are subject to appropriations,” Legner said.
“How is that different from what I said? How is that different from saying that if there is no appropriations from the general assembly, then the employee can’t get paid?” the justice asked.
“As a general matter, I will agree with that,” Legner concluded.
Presenting arguments for Rauner on the budget dispute, Kenton Skarin said the appeal regarding the budget impasse and the Comptroller Susana Mendoza’s authority “is a pendant case to the separate appeal regarding the validity” of LeChien’s July 10, 2015, order demanding workers be paid.
He argued that the process for paying bills is very straightforward.
Government agencies submit a voucher for payment, which he said must indicate the source upon which those funds are drawn.
Skarin said it is then the comptroller’s responsibility to validate the vouchers and forward a warrant to the state treasurer for payment.
He explained that the comptroller does not have the authority to determine where the money is drawn from.
However, he said they are arguing over what authority LeChien’s order bestows on the comptroller.
Skarin said the Central Management Service, or CMS, argues that the funds the comptroller is forcing it to use to pay salaries should be preserved so they can pay for essential services.
Justice Judy Cates questioned how CMS’ arguments are different from the comptroller’s if both want to preserve funds for essential services and get employees paid.
Skarin explained that essential services include employee salaries and necessary goods and services, like gasoline for state troopers’ vehicles. He explained that employees can be paid from either the revolving fund or the general revenue fund but goods and services can only be paid from the revolving fund.
However, switching “hats” to present oral arguments for Mendoza, Legner argued that Rauner’s fear to draw from the revolving fund so it won’t be depleted is misguided because both funds have separate lines for different services.
“Additionally, their argument that they don’t want to put the appropriate funds at risk so they want to draw from the general revenue indicates a misunderstanding of what is going on with the general revenue funds right now.
“The general revenue fund is not an unlimited source of money upon which all state bills can be paid. The general revenue fund right now has over $14 billion bill backlog. As a result of this, the comptroller has to be able to exercise her discretion to determine what gets paid and when in order to keep the state going,” Legner said.
Cates asked about Rauner’s argument that she has no authority to exercise that discretion.
Legner said that the word “maintain” in the statute “imposes the obligation and the duty to preserve, to keep funds in operation.”
Because the comptroller is under court order requiring her to pay bills, Legner said she has to use discretion to determine how to balance all of the competing bills.
“The only way to maneuver in this near impossible situation is via the exercise of discretion,” he said.
“So really, we have to determine whether we’re going to read the Constitutional provisions very narrowly as suggested by your opponent or somewhat more broadly to allow the comptroller discretion. That’s the essence, if you boil it all down,” Cates said.
Skarin, on the other hand, argued that the comptroller is taking the word “maintain” and giving it the definition she wants to.
“We don’t deny that the state has more bills than cash to pay them,” he said. “The question is who gets to say which of two funds is drawn upon.”
Cates asked Skarin what he expects the comptroller to do, give the employees and IOU?
“So you do expect people to show up for work and not get paid because she has no discretion?” she questioned.
Skarin said that Mendoza cannot decide where the money is coming from, but she can determine when warrants are sent to the treasurer for payment.
“So the point at which discretion occurs is the juggling of when you actually make the payments, not where the vouchers are submitted to have those payments made,” he said.
The justices took the matter under advisement.
Legislators are scheduled to be in session through Saturday in hopes of reaching a budget agreement.