                               Illinois Official Reports

                                       Appellate Court



        State v. American Federation of State, County, & Municipal Employees, Council 31,
                                    2014 IL App (1st) 130262



Appellate Court           THE STATE OF ILLINOIS (The Department of Central Management
Caption                   Services), Plaintiff-Appellant and Cross-Appellee, v. AMERICAN
                          FEDERATION OF STATE, COUNTY, AND MUNICIPAL
                          EMPLOYEES, COUNCIL 31, Defendant-Appellee and Cross-
                          Appellant.


District & No.            First District, Second Division
                          Docket No. 1-13-0262


Filed                     September 30, 2014


Held                       On appeal from the State’s complaint to vacate an arbitrator’s award in
(Note: This syllabus favor of a union representing state employees requiring the State to
constitutes no part of the pay the employees’ wages that had not yet been appropriated, the trial
opinion of the court but court’s order vacating and modifying in part the arbitrator’s award by
has been prepared by the permitting the State to present evidence that several agencies did not
Reporter of Decisions have sufficient funds to comply with the arbitrator’s order and
for the convenience of allowing the State to delay payment beyond the time frame permitted
the reader.)               by the award was reversed and the cause was remanded with
                           directions to confirm the arbitrator’s award, since the award arose
                           from the parties’ arbitration agreement and was in accord with the
                           Illinois public policy favoring the enforceability of contracts and the
                           negotiation of binding, multiyear contracts between public
                           employees’ unions and the State.


Decision Under            Appeal from the Circuit Court of Cook County, Nos. 11-CH-25352,
Review                    11-CH-31951; the Hon. Richard Billik, Jr., and the Hon. Rodolfo
                          Garcia, Judges, presiding.


Judgment                  Reversed and remanded with directions.
     Counsel on                Laner Muchin, Ltd., of Chicago (Joseph M. Gagliardo, Thomas S.
     Appeal                    Bradley, and Lawrence J. Weiner, Special Assistant Attorneys
                               General, of counsel), for appellant.

                               Cornfield & Feldman LLP, of Chicago (Stephen A. Yokich, of
                               counsel), for appellee.

                               Mitchell Roth, General Counsel, of Chicago, amicus curiae Illinois
                               Education Association.

                               Sean Smoot, Director and Chief Legal Counsel, of Chicago, amicus
                               curiae Policemen’s Benevolent and Protective Association.

                               Carmel, Charone, Widmer, Moss & Barr Ltd., of Chicago (Susan
                               Matta and William Widmer, of counsel), for amicus curiae.




     Panel                     JUSTICE NEVILLE delivered the judgment of the court, with
                               opinion.
                               Presiding Justice Simon and Justice Pierce concurred in the judgment
                               and opinion.




                                                 OPINION

¶1         The State of Illinois filed a complaint to vacate an arbitrator’s award entered in favor of a
       union of state employees. The trial court vacated the arbitrator’s award in part and permitted
       the State to present evidence in support of its claim that several of its agencies lacked sufficient
       funds to comply with the arbitrator’s award. The court ordered the State to pay its employees
       amounts due under the State’s agreements with the union, but the court permitted the State to
       delay payment beyond the time frame permitted by the arbitrator’s award. The State appeals
       from the judgment, arguing that the document signed by an agent for the State and an agent for
       the union imposed no obligation on the State, because in the document the State’s agent
       purported to commit the State to paying amounts the General Assembly had not yet
       appropriated. The union cross-appeals from the judgment, arguing that the trial court should
       have confirmed the arbitrator’s award.
¶2         We find that the arbitrator’s award drew its essence from the arbitration agreement, and the
       award accords with Illinois public policy favoring the enforceability of contracts and the
       negotiation of binding, multiyear contracts between the State and unions of public employees.
       We reverse the trial court’s order and remand for entry of an order confirming the arbitrator’s
       award.

                                                    -2-
¶3                                         BACKGROUND
¶4       In 2008, the State of Illinois, through its Department of Central Management Services
     (CMS), agreed to a four-year collective bargaining agreement (CBA) with the American
     Federation of State, County and Municipal Employees (AFSCME). The CBA required the
     State to increase the wages of AFSCME members by 1.5% on January 1, 2009, 2.5% on July 1,
     2009, 2% on January 1, 2010, 2% on July 1, 2010, 2% on January 1, 2011, 4% on July 1, 2011,
     and a further 1.25% on January 1, 2012. The CBA provided:
                 “Should any part of this Agreement *** be Judicially determined to be contrary to
             law, such invalidation of such part or provision shall not invalidate the remaining
             portions hereof ***. The parties shall attempt to renegotiate the invalidated part or
             provisions. The parties recognize that the provisions of this contract cannot supersede
             law.”
¶5       In the CBA, the parties also agreed to use a grievance process to resolve disputes. For
     grievances that reached arbitration, the CBA established arbitration procedures, and it
     specified that “[t]he arbitrator shall neither amend, modify, nullify, ignore, add or subtract
     from the provisions of this Agreement.”
¶6       In the summer of 2009, Governor Pat Quinn directed 10 state agencies to lay off a total of
     2,500 employees, with the layoffs to take effect early in fiscal 2010. AFSCME filed a
     grievance to contest the layoffs. AFSCME and the State, through CMS, agreed to present the
     matter to arbitrator Ed Benn for resolution. With Benn’s assistance, the parties reached a
     mediated resolution on January 26, 2010, signed by agents for the union and the State. Under
     the mediated resolution, the State agreed to lay off only 1,200 employees, while closing 4
     state-run facilities and deferring the wage increases set in the CBA. The measures to which
     AFSCME agreed saved the State about $300 million, far exceeding the $115 million the State
     expected to save from the proposed 2,500 layoffs.
¶7       Later in 2010, Governor Quinn sought further concessions from the union. The parties
     signed several cost savings agreements (CSAs) in the fall of 2010. The first such agreement set
     a goal of finding budgetary savings of $100 million, and named Benn as the agreed arbitrator
     for any disputes arising under the CBA and the CSAs. By early November 2010, the parties
     identified sufficient savings, and in a second CSA the State’s agent agreed that “there shall be
     no temporary or indeterminate layoffs through the end of [fiscal year] 2012 (June 30, 2012),
     nor shall the State close any facilities prior to July 1, 2012.” AFSCME agreed to yet more
     deferrals of the wage increases set in the CBA, unpaid furloughs, reduction of overtime, and
     other cost reductions. AFSCME’s members ratified the CSAs, and the State began to realize
     the savings under the CSAs.
¶8       On February 16, 2011, Governor Quinn introduced to the General Assembly a proposed
     budget for fiscal year 2012. The proposed budget included sufficient appropriations to fund the
     State’s promises under the CBA, as modified by the CSAs. The General Assembly rejected
     parts of the proposed budget. In May 2011, the General Assembly adopted its budget
     appropriating funds for fiscal year 2012 to all the state agencies, with specific amounts for
     specific categories of expenses. CMS reviewed the budget and determined that the
     appropriations for paying employees at 14 agencies would not suffice to meet the State’s
     commitments under the CBA and the CSAs. CMS froze the pay for its employees for those 14
     agencies at the amounts paid during fiscal year 2011. Employees at all other state agencies
     began receiving the negotiated pay raises.

                                                -3-
¶9         In July 2011, AFSCME sought arbitration of the dispute arising under the CSAs. AFSCME
       argued that in the CSAs the State promised to pay the delayed 2% increase in wages for
       AFSCME members. The State answered that the Illinois Public Labor Relations Act (Act) (5
       ILCS 315/1 et seq. (West 2008)) established that it owed no duty to pay any state employees
       any wages until the General Assembly appropriated sufficient funds to pay the wages.
       According to the State, if the General Assembly decided to appropriate no funds to pay
       employees, allocating all appropriations in other ways, the State would owe its employees
       nothing.
¶ 10       Benn issued his award on July 19, 2011. Benn noted that the State argued, in effect, that the
       CBA and the CSAs, interpreted in light of the Act, meant that the State promised to pay its
       employees “only if there are sufficient appropriations by the General Assembly.” Benn found
       that the express provisions of the CBA, limiting the power of arbitrators, forbade him from
       adding that language to the CBA and the CSAs. The CSAs, by their own terms, required the
       State to pay the agreed wages to AFSCME members, including the negotiated 2% increases.
       Accordingly, Benn found that the State breached the CBA and the CSAs when it failed to pay
       the agreed wages to employees of the 14 agencies.
¶ 11       Regarding the Act, Benn said:
                   “I am an arbitrator whose authority flows strictly from the terms of the collective
               bargaining agreement. I am not a judge with authority to interpret statutory provisions.
               ***
                   *** The parties did not specifically make Section 21 [of the Act] part of the [CBA]
               or the [CSAs]. As an arbitrator, I therefore have no authority to interpret that statutory
               provision. Statutory interpretations must be made by the courts and not by arbitrators.”
¶ 12       Benn added that the CBA did not permit him to add language to the CBA or the CSAs
       based on his interpretation of the Act. Benn refused to address constitutional and public policy
       issues the State raised, as Benn found that resolution of those issues exceeded the scope of the
       authority the CBA and CSAs conferred on him. Benn ordered the State to pay the agreed
       wages, including the 2% wage increases for fiscal year 2012.
¶ 13       The State promptly filed a complaint to vacate Benn’s award on public policy grounds and
       an emergency motion to stay the award. The trial court granted the stay. The General Assembly
       made supplemental appropriations, and several agencies experienced sufficient attrition to
       allow them to pay the wage increases Benn ordered. Eventually, the State paid the ordered
       wages to employees in all but six agencies. The remaining agencies affected by the wage
       freeze are the Department of Corrections, the Department of Human Services, the Department
       of Public Health, the Department of Natural Resources, the Department of Juvenile Justice,
       and the Human Rights Commission (collectively, the affected agencies).
¶ 14       The trial court agreed with the State that an overriding public policy made the CBA and the
       CSAs invalid, unless the General Assembly appropriated to each agency sufficient funds to
       pay the amounts due under the CBA and the CSAs. The court then held evidentiary hearings on
       the availability of appropriated funds for the affected agencies.
¶ 15       On December 10, 2012, the court held that the affected agencies had proven that they
       lacked sufficient appropriations to pay in full the wages agreed in the CBA as modified by the
       CSAs, but the agencies had not proven an inability to pay partial increases over fiscal year
       2011 wages. The court ordered the State to pay the wages, including partial increases, to the


                                                   -4-
       extent the appropriated funds permitted. The court added that the State still had an obligation
       under the CBA and the CSAs to pay in full the agreed amounts, even if the agencies needed to
       use fiscal year 2013 appropriations to pay the agreed 2012 wages.
¶ 16       The State appealed from the order, challenging the holding that it had an obligation to pay
       the agreed wages. AFSCME cross-appealed from the order, challenging the ruling insofar as
       the court vacated in part Benn’s order. Negotiators acting on behalf of the State subsequently
       agreed with AFSCME representatives concerning payments due under the court’s order, and
       the State’s negotiators agreed to withdraw the State’s appeal from the court’s order. After
       AFSCME members ratified the agreement, the Attorney General informed AFSCME that she
       would not consent to withdrawal of the appeal. However, the State paid the wages as agreed, in
       accord with the trial court’s order. AFSCME again ratified the agreement, despite the Attorney
       General’s decision to pursue the appeal.

¶ 17                                           ANALYSIS
¶ 18                                             Mootness
¶ 19       Neither party suggests that the State’s payments in accord with the court’s order moots the
       appeal. We address the issue of mootness because of our duty to determine whether this court
       retains jurisdiction to decide the appeal. Circle Management, LLC v. Olivier, 378 Ill. App. 3d
       601, 607 (2007). We agree with the parties that the payments do not make the case moot,
       because “[a]gency compliance with the Court of Appeals’ mandate does not moot the issue of
       the correctness of the court’s decision.” Norfolk & Western Ry. Co. v. American Train
       Dispatchers’ Ass’n, 499 U.S. 117, 128 n.3 (1991).

¶ 20                                            Court’s Interest
¶ 21       Neither party questioned the propriety of this court deciding the appeal in this case. Staff
       members working for all of the judges in this case belong to AFSCME, and the CBA at issue
       governs their relationship with the State. However, all judges in the state face the same conflict
       of interest. In this case, as in Jorgensen v. Blagojevich, 211 Ill. 2d 286, 298-99 (2004), “[w]ere
       we to recuse ourselves, the parties would therefore be left without a forum in which to review
       the circuit court’s judgment. Their right to appeal would be lost. Under these circumstances,
       the common law ‘rule of necessity’ obligates us to proceed.”

¶ 22                                         Standard of Review
¶ 23        The State argues that we should vacate the arbitrator’s award because Benn’s decision did
       not draw its essence from the CBA, and because the order violates Illinois public policy. The
       General Assembly expressly incorporated the Uniform Arbitration Act (710 ILCS 5/1 et seq.
       (West 2008)) into the Act (5 ILCS 315/8 (West 2008)). The Act “reflects the legislature’s
       intent *** to provide finality for labor disputes submitted to arbitration.” American Federation
       of State, County & Municipal Employees v. Department of Central Management Services, 173
       Ill. 2d 299, 304 (1996) (AFSCME v. CMS). Accordingly:
                “[T]he judicial review of an arbitral award is extremely limited. *** The Act
                contemplates judicial disturbance of an award only in instances of fraud, corruption,
                partiality, misconduct, mistake, or failure to submit the question to arbitration. ***



                                                   -5-
                   To this end, any question regarding the interpretation of a collective-bargaining
               agreement is to be answered by the arbitrator. Because the parties have contracted to
               have their disputes settled by an arbitrator, rather than by a judge, it is the arbitrator’s
               view of the meaning of the contract that the parties have agreed to accept. We will not
               overrule that construction merely because our own interpretation differs from that of
               the arbitrator.” AFSCME v. CMS, 173 Ill. 2d at 304-05.
¶ 24       The court “will review an arbitrator’s contract interpretation only to determine if the
       arbitrator’s award drew its essence from the agreement so as to prevent a manifest disregard of
       the agreement between the parties.” Board of Trustees of Community College District No. 508
       v. Cook County College Teachers Union, Local 1600, 102 Ill. App. 3d 681, 683 (1981). A
       federal court held that an arbitrator’s award draws its essence from the collective bargaining
       agreement “if the interpretation can in any rational way be derived from the agreement, viewed
       in the light of its language, its context, and any other indicia of the parties’ intention; only
       where there is a manifest disregard of the agreement, totally unsupported by principles of
       contract construction and the law of the shop, may a reviewing court disturb the award.”
       Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969).
¶ 25       However, courts retain the power to vacate arbitral awards, even if the awards derive their
       essences from collective bargaining agreements, if the awards violate established norms of
       public policy. AFSCME v. CMS, 173 Ill. 2d at 306-07.

¶ 26                           The Arbitrator Did Not Consider Public Policy
¶ 27       The State first asks us to vacate the arbitrator’s award because Benn expressly refused to
       consider the State’s public policy arguments for ignoring the words of the CBA and the CSAs.
       The State bases its argument on AFSCME v. CMS, 173 Ill. 2d 299. In AFSCME v. CMS, the
       arbitrator held that the CBA required CMS to reinstate a child welfare specialist, despite the
       specialist’s falsification of progress reports for children and her failure to compile required
       family service plans. The AFSCME v. CMS court noted that the arbitrator in that case
               “avoided discussion of the charges ***. He did not take any precautionary steps to
               ensure the misconduct at issue here will not be repeated, and he neither considered nor
               respected the pertinent public policy concerns that arose from them. Thus, the remedy
               in this case violates public policy in that it totally ignores any legitimate public policy
               concerns.” AFSCME v. CMS, 173 Ill. 2d at 317-18.
¶ 28       The AFSCME v. CMS court then held that the violation of public policy made the award
       unenforceable, despite the fact that it drew its essence from the collective bargaining
       agreement. The court said:
                    “As with any contract, a court may not enforce a collective-bargaining agreement
               in a manner that is contrary to public policy. Accordingly, if an arbitrator construes
               such an agreement in a way that violates public policy, an award based on that
               construction may be vacated by a court. [Citation.] Questions of public policy, of
               course, are ultimately left for resolution by the courts. *** We believe the public policy
               identified above is violated by the arbitral award in this case. That award cannot be said
               to in any way promote the welfare and protection of children.” AFSCME v. CMS, 173
               Ill. 2d at 318.



                                                    -6-
¶ 29       The AFSCME v. CMS decision does not make the arbitrator responsible for deciding
       questions of public policy. The contract for arbitration defines the arbitrator’s authority, and if
       that contract does not permit the arbitrator to consider questions of public policy, he should not
       consider questions of public policy. See Board of Trustees of Community College District
       No. 508 v. Cook County College Teachers Union, Local 1600, 74 Ill. 2d 412, 420 (1979). As
       the AFSCME v. CMS court held, the courts reviewing arbitration awards bear ultimate
       responsibility for deciding questions of public policy. AFSCME v. CMS, 173 Ill. 2d at 318.
       Benn’s refusal to consider the State’s public policy argument does not warrant rejection of the
       arbitral award.

¶ 30                                         Essence of the Award
¶ 31       Next, the State argues that the award does not draw its essence from the CBA because
       Benn ignored the CBA’s clause which said that the “provisions of this contract cannot
       supersede law.” The State contends that the CBA and CSAs, as Benn interpreted them,
       supersede section 21 of the Act, which provides: “Subject to the appropriation power of the
       employer, employers and exclusive representatives may negotiate multi-year collective
       bargaining agreements pursuant to the provisions of this Act.” 5 ILCS 315/21 (West 2008).
       According to the State, this sentence means that the State’s duties under its collective
       bargaining agreements always remain subject to the General Assembly’s appropriation power.
¶ 32       The Act makes the CBA subject to the appropriation power of the employer. The Act
       defines “employer” as
                “the State of Illinois; any political subdivision of the State, unit of local government or
                school district; authorities including departments, divisions, bureaus, boards,
                commissions, or other agencies of the foregoing entities; and any person acting within
                the scope of his or her authority, express or implied, on behalf of those entities in
                dealing with its employees. ***
                    ‘Public employer’ or ‘employer’ as used in this Act, however, does not mean and
                shall not include the General Assembly of the State of Illinois ***.” 5 ILCS 315/3(o)
                (West 2008).
¶ 33       We cannot reconcile the State’s interpretation of section 21 of the Act with the definitions
       in the Act, which expressly exclude the General Assembly from the list of employers to whose
       appropriation power the CBA remains subject. The State admits that none of the 14 agencies
       have any appropriation power. We cannot accept the State’s invitation to ignore the explicit
       definition of the term, “employer.” See Board of Education v. A, C & S, Inc., 131 Ill. 2d 428,
       468-69 (1989). We hold that the Act does not make the CBA subject to the General
       Assembly’s appropriation power.
¶ 34       The State also argues that the CBA and the CSAs, as Benn interpreted them, supersede
       article VIII of the Illinois Constitution of 1970, which provides that “[t]he General Assembly
       by law shall make appropriations for all expenditures of public funds by the State.” Ill. Const.
       1970, art. VIII, § 2(b). Under the State’s interpretation of the CBA and article VIII, the CBA
       imposed no binding obligation on the State, because the General Assembly had not
       appropriated funds for the promises the State made in the CBA. If Benn accepted the State’s
       interpretation of the CBA, Benn would completely rewrite the CBA and the CSAs as
       documents with no binding effect on either party, despite the language of contractual promise
       in all the documents. As Benn observed, the CBA expressly limited his powers and did not

                                                    -7-
       permit him to rewrite the CBA and the CSAs, nor did it permit him to ignore the promises
       therein. We find no indication that fraud, corruption, partiality, misconduct, or mistake
       affected the arbitral award, and the arbitrator addressed all questions properly submitted to
       arbitration in accord with the CBA. See AFSCME v. CMS, 173 Ill. 2d at 304. Accordingly, we
       find that the arbitrator’s award drew its essence from the CBA and the CSAs. See
       Griggsville-Perry Community Unit School District No. 4 v. Illinois Educational Labor
       Relations Board, 2013 IL 113721, ¶ 20.

¶ 35                                           Public Policy
¶ 36       The State also advances the related contention that the arbitrator’s award violates Illinois
       public policy as expressed in the Illinois Constitution. According to the State, Illinois public
       policy forbids the State from negotiating any contracts that require payment of funds the
       General Assembly has not appropriated. When the State negotiated the CBA in 2008, the
       General Assembly had not made appropriations for fiscal year 2012. When the State
       negotiated the CSAs in 2010, the General Assembly still had not made appropriations for fiscal
       year 2012. The State claims that the CBA and the CSAs have no binding force, and do not
       constitute contracts between AFSCME and the State, because the State, in those documents, in
       violation of the constitution, purported to promise to make expenditures of public funds that
       the General Assembly had not yet appropriated. But the constitution also states as a basic
       public policy that “No *** law impairing the obligation of contracts *** shall be passed.” Ill.
       Const. 1970, art. I, § 16. The State argues that the General Assembly’s refusal to appropriate
       funds in accord with the CBA and the CSAs does not impair the State’s obligation under the
       CBA and the CSAs because the State had no obligation to fulfill the promises its authorized
       representatives made in those documents.
¶ 37       The State’s interpretation of public policy brings that policy into direct conflict with the
       Act, which expressly provides that the State and its agencies “may negotiate multi-year
       collective bargaining agreements” with unions of state employees. 5 ILCS 315/21 (West
       2008). The State interprets public policy to foreclose the State and its agencies from effectively
       committing themselves to paying union members any amount prior to the General Assembly’s
       appropriation of funds to the State and its agencies. But the General Assembly does not
       appropriate funds before the fiscal year preceding the year for which it appropriates funds.
       Thus, under the State’s interpretation of public policy, the State and its agencies cannot
       promise unions anything that requires funding for future years. The State’s interpretation of
       public policy as expressed in the Illinois Constitution forecloses the possibility of enforceable
       multiyear contracts, contrary to the Act.
¶ 38       In AFSCME/Iowa Council 61 v. State, 484 N.W.2d 390 (Iowa 1992), the Iowa Supreme
       Court faced a similar argument concerning the need for appropriations before a union could
       enforce a collective bargaining agreement. The trial court entered an order requiring the state
       to pay its employees the amounts it promised in a collective bargaining agreement, despite the
       lack of appropriations. The State of Iowa argued that the court’s order “violate[d] the
       Constitution’s appropriation clause, its doctrine of separation of powers and its prohibition
       against undue delegation of duties.” Iowa Council 61, 484 N.W.2d at 393. The state contended
       that “its power to withhold appropriations must be read into every state contract.” Iowa
       Council 61, 484 N.W.2d at 393. The Iowa court said:


                                                   -8-
                     “At the most basic level the State contends a contract with it is not really a contract,
                or, if it is labeled a contract, the State need not perform. This argument rests on a
                number of disputed applications of settled constitutional and statutory rules. The
                question is: Can the government be made to perform in accordance with its contracts,
                or is the other party, by reason of constitutional and statutory rules intended to protect
                the public treasury, left to the vagaries of the political process? We think the State can
                indeed be required to comply.
                     A second question is whether the State can avoid liability on this contract on the
                basis of an escape clause in the statute which forms a part of the contract. The answer is
                no–not on these facts. This is because the clause does not allow the State to avoid its
                contractual liability merely by selecting spending priorities under its exclusive control.
                ***
                                                      ***
                     *** Whatever strengths could be perceived in the State’s position simply cannot be
                used to frustrate its contractual obligations. ***
                     *** In Perry v. United States, 294 U.S. 330, 353 n.3 *** (1935), the United States
                Supreme Court quoted with approval the following eighteenth century authority:
                     ‘[W]hen a government enters into a contract with an individual, it deposes, as to the
                     matter of the contract, its constitutional authority, and exchanges the character of
                     legislator for that of a moral agent, with the same rights and obligations as an
                     individual. Its promises may be justly considered as excepted out of its power to
                     legislate unless in aid of them. It is in theory impossible to reconcile the idea of a
                     promise which obliges, with a power to make a law which can vary the effect of it.’
                Id. (quoting Hamilton: Communication to the Senate, January 20, 1795).
                     If we possessed the power to fashion a different rule for Iowa law, a power we very
                much doubt we have, we would not do so. It would be no favor to the State to exonerate
                it from contractual liability. To do so would seriously impair its ability to function. A
                government must finance its affairs, must contract for buildings, highways, and a
                myriad of other public improvements and services. It would lead to untenable results if
                a government, after having contracted for needed things, did not have to pay for them.”
                Iowa Council 61, 484 N.W.2d at 391-94.
¶ 39        Like the State of Iowa in Iowa Council 61, the State of Illinois here argues that if the
       General Assembly chooses to appropriate all its funds to specific purposes other than the
       payments of amounts the State’s agents agreed to pay state employees, then the State owes its
       employees nothing. Such an interpretation of the CBA and the CSAs, as documents that
       commit the State to nothing, cannot stand. The State’s interpretation of the General
       Assembly’s appropriation power would allow the General Assembly in every appropriation
       bill to impair the State’s obligations under its contracts. We adopt the reasoning of the Iowa
       Supreme Court in Iowa Council 61. The State, through its authorized agents, may commit the
       State to pay parties who enter into contracts with the State, even before the General Assembly
       has appropriated funds for the contract. Iowa Council 61, 484 N.W.2d at 394; see also
       Association of Surrogates & Supreme Court Reporters v. New York, 940 F.2d 766, 771 (2d Cir.
       1991). If the State seeks to make the contract contingent on appropriation, it must make that
       contingency explicit in the contract. See Carlstrom v. State, 694 P.2d 1, 4 (Wash. 1985).


                                                     -9-
¶ 40       We hold that the arbitrator’s award comports with the overriding public policy of
       permitting the State to negotiate enforceable multiyear collective bargaining agreements with
       unions of state employees, and the award furthers the express constitutional policy forbidding
       the General Assembly from passing any acts, including insufficient appropriation bills, that
       impair the obligation of contracts. Accordingly, we deny the State’s appeal.

¶ 41                                            Cross-Appeal
¶ 42       AFSCME, in its cross-appeal, argues that the trial court should not have vacated the
       arbitrator’s award in part. Because the arbitrator’s award draws its essence from the CBA and
       the CSAs, and because the award does not offend Illinois public policy, we hold that the trial
       court had no adequate basis for modifying the arbitrator’s award. We reverse the trial court’s
       decision insofar as the trial court vacated the award in part and modified the award. We remand
       for the circuit court to confirm the arbitrator’s award.

¶ 43      Reversed and remanded with directions.




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