Pensions – Page 5

November 21, 2012November 21, 2012

Judges, Judicial Pensions and Judicial Impartiality

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Can someone with a pension be an objective judge of whether it’s ok to cut someone else’s pension? The state is making an argument that Judge Sarah Taft-Carter is compromised and can’t consider issues concerning the 2011 state pension overhaul because her son and mother receive checks from the state system.

Seems worth reviewing the judicial pension system then, doesn’t it?

The state’s judges are the recipients of quite, um, healthy pension benefits. After 15 years, a judge can be eligible to receive his or her full salary as a pension, though if they were appointed after 2009, it will only be 80%. Seems plush, no?

The standard rejoinder is that the judges have their own system, and it’s well funded, with a funding ratio of 78%. Compared to the state employee and teacher’s system’s 48%, this seems the pink of health, so I guess it’s ok to continue to treat our judges as royalty, deserving pensions far better than anyone else.

The reality, as usual, is quite different. For a long time, pensions were just paid out of the current budget. It was in the 1960s and 70s that governments changed how they saved for pensions, and started socking away money for them. When those plans were established, employees who had not paid into the system were accepted into it, to relieve the budgets from their pension payments. You could think of this as the original sin of the pension systems, and so they began life behind the eight ball, always hoping to catch up to full funding, but never able. (Of course, after that original sin, there were plenty more, with governments skipping payments, making overly rosy assumptions about the future, using idiotic accounting rules, and so on. We are leaving all those aside for this post.)

Until 1989, when the state’s judges were incorporated into the state pension system, their pensions, like other state employees before them, were paid directly out of the current budget. However, unlike the state system, when the judicial system was created, those judges were not covered. Those judges paid nothing toward their pensions, and their retirement checks continue to come straight out of the state’s budget to this day, about $6.3 million per year. (See here, look at the various line items that either read “Pension” or “Salary for retired justices.”)

These judges were hired before there was a judicial pension system, so they aren’t covered by that system. But lots of state employees were hired before there was a state employee pension system, and their system was forced to cover them. If these “pay-as-you-go” judges were included in the judicial system, the way other state employees were included in theirs, I estimate the funding ratio of the judicial pension system would be down in the 35% range, far worse than the state employee system.

So this is why all our judges are compromised on the issue of pensions. Their system is far cushier and — by any real measure of how much their pensions cost the state budget — in far worse shape than the state employee pension system. Fortunately for them, the accounting rules in place mask the condition and the number of judges is relatively small. But this is a slender branch on which to place all one’s hopes for retirement. No judge can be certain that someone with more clout than me won’t eventually notice this. Any precedent established for the state employee system can and will be used against the judicial pensions — eventually.

In other words, no judge in Rhode Island can be impartial about the pension case currently before Sarah Taft-Carter. They all have pensions, and because it’s a small state, etc etc, virtually all of them have relatives in the state pension system. On the other hand, they may all be uniformly compromised, but they are likely not uniform in their resistance to public pressure. The state may be counting on seeing if they can be bullied into going along by public and loud accusations of bias and long hearings about her impartiality. That’s why, from the state’s perspective, a Judge Taft-Carter who has been amply abused in the press may be the best possible jurist to consider this case.

October 22, 2012

Taubman Center Picks Biased Pension Panel

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First Brown University’s Taubman Center put out this push poll on pensions, then it stacked its panel discussion on the subject with some of the most conservative voices on pension politics available.

On Thursday afternoon the Center will host a discussion called Pensions in Peril: How Municipalities Are Defusing This Fiscal Time Bomb. Slated to speak are Eileen Norcross, Joshua Rauh and Robert Clark; all are very well-known for taking a very hard line on the dangers posed by public sector pension plans.

One local pension expert said the Center could have fostered a more balanced conversation had it invited the likes of Dean Baker, of the Center for Economic and Policy Research, or Diane Oakley, of the National Institute on Retirement Security, instead of just the three pension skeptics.

Norcross works for the Mercatus Center, a right-wing think tank at George Mason University financed by the Koch Brothers and big oil, among others.

Here’s what she had to say to Fox News about Central Falls’ pension problems:

The second panel discussion has a more balanced panel, including mayors Scott Avedesian of Warwick and Don Grebien of Pawtucket. Other panelists are: Gayle Corrigan, Chief of Staff, City of Central Falls; Dennis Hoyle, Auditor General of Rhode Island; and Susanne Greschner, Chief, Municipal Finance Department, State of Rhode Island.

September 10, 2012September 11, 2012

Gina Talks Progressive Politics, But Not With RI

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One of the most interesting aspects of the Washington Post op/ed about Gina Raimondo is not that another fiscal conservative has lauded the pension-cutting treasurer for taking benefits away from retirees, it’s that Raimondo invoked progressive politics in her defense of balancing Rhode Island’s pension problems squarely on the backs of public sector retirees.

“That was my mantra the whole time: Progressives care about public services,” she is quoted as saying in the piece.

I certainly don’t recall that being Raimondo’s mantra the whole time. I recall her mantra being that she had to investigate the actuarial numbers closely before determining a policy proscription, and that she wanted to do what was fair.

Part of the progressive community’s mistrust of Raimondo stems from her penchant for tailoring her message to different constituencies. Last year, I witnessed first hand her tell a chamber of commerce crowd in the morning that Rhode Islanders needed them to lobby legislators to cut pensions because Rhode Island had the most unfunded system in the country. Later in the day, she told a union crowd at a Portuguese American Club that fairness was her top concern, and she still didn’t know what the reforms would look like.

To that end, I have been requesting an interview since the early spring about how Raimondo’s pension efforts fit with her assertion that she is a progressive and still haven’t heard back one way or another.

We’d like to hear more about Raimondo’s mantra about what progressives care about, and hope she agrees to talk to this organization about that topic.

I also found it interesting that Ted Nesi, who never misses an opportunity to talk up the treasurer, described the author of the piece as being “relentlessly centrist.”

This isn’t quite Fred Hiatt’s reputation. In 2009, Harper’s ran a story about Hyatt’s attempts to “push the WaPo editorial page to the Neocon right.” And in 2010, Media Matters (which, like this website, has a decidedly progressive bent) posted an article titled, “The myth of the ‘liberal’ Washington Post opinion pages.”

Here’s how that piece described Hiatt:

Finally, we come to Fred Hiatt, the so-called “traditional liberal in all matters domestic.” He’s the kind of “traditional liberal” who thinks health care reform is too expensive — all while disregarding liberal reform proposals that would reduce the cost. The kind who distorted Barack Obama’s comments while praising John McCain’s strongly held “principles” on issues on which McCain had shifted and displayed inconsistency. The kind who allows Will to mislead readers about climate change, over and over again. And Hiatt, of course, opposed a special prosecutor examination of Bush terror practices. (Argue, if you like, that applying the rule of law to government officials is not a domestic matter — but I don’t buy it.)

A few of the guest op-eds published by Hiatt are worthy of mention. Last summer, the Post published an op-ed in which Martin Feldstein falsely claimed that Barack Obama supported “a British-style ‘single payer’ system in which the government owns the hospitals and the doctors are salaried.” When the inaccuracy of Feldstein’s claim was pointed out by, among others, Jon Chait and Paul Krugman, Hiatt refused to run a correction. Instead, he has rewarded Feldstein by publishing two more of his op-eds attacking “Obamacare,” Feldstein’s opposition to which may have something to do with his .

Hiatt published two op-eds by Sarah Palin last year, one of which repeated several already-debunked claims about climate change. The Post dragged its feet in running a response to Palin, doing so only after running a Palin letter to the editor.

Last October, Hiatt handed insurance company lobbyist Karen Ignagni op-ed space to tout a deeply-flawed “study” her organization commissioned — a study the Post’s news pages had already debunked. In August, Hiatt ran an op-ed defending the “death panels” lie. Last spring, Hiatt published an op-ed by Charles Murray, darling of the “white nationalist” VDARE crowd. And just this month, the Post actually commissioned a column baselessly asserting that liberals are more condescending than conservatives.

It seems the real reason The Washington Times has never been able to make any money may be that its hard-right editorial stance is redundant in a city that already has Fred Hiatt’s Washington Post.

July 3, 2012July 3, 2012

Progressives Should Care About Pension Security

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gina linc fung — Gina Raimondo, Linc Chafee and Allan Fung, at an event in 2011 to launch the campaign to decrease pension costs. Photo by Bob Plain, courtesy of WPRO.

I suspect if that if named a United States Senator tomorrow (might as well give the right-wing immediate heartburn at that prospect) my committee assignment of choice would be the Senate Committee on Health, Education, Labor and Pensions, the so-called, and when run correctly, aptly named HELP Committee. Putting four important issues so remarkably interlinked together was wise indeed, but those linkages are not always obvious to some who deem themselves progressives.

My progressive friends breathed a sigh of relief last week when the Supreme Court upheld the Affordable Care Act, appreciate the importance of a strong public education system, and usually understand the basics of workers having a voice at the table through collective bargaining rights. But last year, so many progressive legislators, despite making commitments to the contrary, often in writing to the groups that endorsed them, voted to implement some of the most draconian changes in the country to Rhode Island’s state-run public pension plans. And many of their progressive supporters seem to be equally confused by the issue or just wish it would go away. It will not, and should not.

The elected officials who broke their commitments know who they are. While, to the dismay of many, I remain personally fond of Rhode Island General Treasurer Gina Raimondo (who made no commitments on the issue), she essentially told the General Assembly that our unfunded pension liability was a “weapon of mass destruction,” and with remarkable haste in a virtually unprecedented special session, the Rhode Island Retirement Security Act of 2011 was enacted. And it was enacted with a lot of nominally progressive votes. I have more sympathy for elected officials willing to make amends, those who felt caught up in the same type of political tide that led federal elected officials to support the ill-advised war in Iraq (a vote which was at least a contributing factor to Hillary Clinton losing the Democratic Presidential nomination) and now acknowledge their errors in judgment, than for those who are angry they have been asked to account for their votes. I do give kudos to Providence Mayor Angel Taveras for negotiating a solution with active and retired employees as the state should have done and progressive legislators should have insisted they do.

All of that said, this article is not primarily directed at elected officials who need to reconsider their priorities, but at the progressive community in general. It is ironic that many of my more conservative acquaintances, while still maintaining their distaste for both unions and defined benefit pensions, confide in me their belief that the State of Rhode Island acted illegally in breaking the covenant it had with those workers and retirees. It pains me that some of the progressives with whom I have fought side by side in so many battles do not understand either the legal or moral obligation the State has to those workers, or that society should have to provide real retirement security to all workers. Worse are those that buy into, and repeat, the false choices argument – that if the state honors commitments to its public sector workers, it won’t be able to tighten the safety net for those most in need. Have the recent tax cuts for the wealthiest among us have been forgotten so quickly? False choices indeed!

Progressives believe that the entire arc of an individual’s life should be imbued with justice. That includes not only a world free from discrimination, a clean environment, the right to choose, the right to marry the partner of your choice and help for those who need it the most, but access to quality, affordable health care, an excellent public education, a good job with good wages where workers have a voice, and a secure retirement.

Apparently, one can still be a Democrat and ignore some of these issues – but you can’t claim to be a progressive.

June 26, 2012June 26, 2012

Stark Contrast Between City, State Pension Efforts

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payday panel — Providence Mayor Angel Taveras, right, and Treasurer Gina Raimondo at a recent panel on payday loan reform, an issue they both supported.

It’s striking the difference in how efforts to cut public sector pension benefits are playing out in Providence compared to the state level – as municipal retirees are agreeing to a compromise in the Capital City, state retirees are gearing up for a legal fight in court.

About 80 percent of Providence retirees voted in favor of a pension deal with Mayor Angel Taveras earlier this week. Meanwhile Bob Walsh, head of the NEARI, a local teachers’ union whose members are in the state system, was calling the Rhode Island’s reform efforts “a profoundly poorly-thought out solution,” to WPRI and penning op/eds on RI Future.

In part, it’s a telling testament to the different styles employed by those who led the efforts.

Providence Mayor Angel Taveras was understated yet adamant as he brought his ask to the table. Treasurer Gina Raimondo, on the other hand, went on more of a whistle-stop rally-for-reform tour of the state last year talking about truth in numbers more than compromise.

Of course, it’s also, in part, a telling testament to the need for reform – which explains a lot about the two different tacks too.

In Providence, the city was teetering on the verge of bankruptcy, and had made some pretty exorbitant post-employment promises to city staff over the years. At the state level, the only danger was staving off potentially-dismal future scenarios and the danger of paying for the government we already created.

To that end, it is little surprise that Taveras hasn’t achieved the kind of stardom as did Gina. Taveras merely responded to a crisis; Gina created one and then solved it by saving taxpayers money at the expense of public sector unions – of course such actions would win the praise of the ultra-conservative Manhattan Institute and ALEC, which in a recent report called RI’s pension cutting efforts a model for the rest of the country to follow.

On the other hand, Providence’s pension reform savings are already all-but in the bank. On the state-level, any savings to be had still rest in the hands of a judge.

Either way, expect to see many more comparisons between pension reform efforts between the city and state … in fact, at this early date at least, I’d bet it will be the basis for the 2014 Democratic primary campaign for governor between Gina Raimondo and Angel Taveras.

June 26, 2012June 25, 2012

Pension Lawsuit Primer

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On Friday, the long-anticipated lawsuits against the 2011 Rhode Island Retirement Security Act (the pension changes passed by the Rhode Island General Assembly and signed by Governor Chafee last fall) were filed on behalf of those impacted by the changes. We believe that the State of Rhode Island has a legal and a moral obligation to the active and retired teacher, state and municipal workers. This article will outline the background, thinking and rationale behind the legal arguments that will be pursued.

The basic legal argument included three counts that assert that the state violated the Rhode Island Constitution by contravening contract rights, due process rights, and the takings clause (relating to property rights) of some or all vested employees and retirees.

While it is possible the various lawsuits will be consolidated, for legal procedural reasons there are currently three lawsuits involving the rights of vested active employees, represented by a coalition of unions including the National Education Association Rhode Island, RI AFSCME Council 94, RI Federation of Teachers and Health Professionals, Laborers’ International, National Association of Government Employees, and the International Brotherhood of Police Officers, among others, and several attorneys.
A lawsuit covering retirees was filed separately at the same time, and falls under the umbrella of the RI Public Employees’ Retiree Coalition, a group formed by the retired groups from NEARI, RI AFSCME-Council 94, RIFTHP, RI Retired Teachers Association, RI Association of Retired Principals, RI Laborers’ Retiree Council and other retirees.

The lawsuits requested an immediate temporary restraining order to stop the implementation of last fall’s changes to the state, municipal, and teacher retirement systems, which was denied, but the court did set a speedy trial date later this summer.
While we expect the lawsuit(s) at the Superior Court level to take several months, and with expected appeals even longer, the basic legal arguments can be summarized in a few key legal questions.

The first question is whether the pension benefits are contractual in nature. To date, the courts have suggested that they are, and folks covered by pensions in the state run Municipal Employee Retirement System may even remember negotiating for the specific plan that covers them. Even the benefits that are statutory in nature, such as those for teachers and state employees, should be found to meet the elements of a contractual relationship.

The next question has two parts – did the changes in the law impair the contract that a pension represents, and if so, was the impairment substantial? We believe that these are easy questions for the courts to answer in the affirmative – significant diminishment in COLA’s, benefits, formulas, and age of retirement should easily clear the “substantial impairment of benefits” standard.

The final question is where we expect the lawsuits to be grounded – and to be won by the active and retired members. Even if there is a contract, and even if the contract was substantially impaired, did the impairment serve a greater government purpose? The key subsidiary question to be answered under the “greater government purpose” standard is whether more reasonable options were available.

We believe that there were many more reasonable options available that could have significantly reduced the devastating impact the pension changes had on so many active and retired teachers, state and municipal workers. If the Court finds that there were more reasonable options not entertained and undertaken, then the State will not prevail in defending the pension changes.

The questions on reasonableness cover several areas, some in arcane areas that expert testimony will cover. They may include whether the updated mortality data used to calculate pension liabilities went too far; whether the reduction in the expected rate of return of the pension portfolio assumed too low of a rate of return; why no new revenue from the state was included to offset the potential increased costs incurred when the aforementioned changes were made to the mortality and rate of return assumptions; how the projections related to the new defined contribution portion of the new retirement plan were calculated; the decision of when COLA’s should be restored and at what level; the potential disparate impact of the changes on lower and higher paid workers and retirees; the potential disparate impact on workers with longer and shorter terms of service; the potential disparate impact on Social Security recipients and non-Social Security recipients, etc., etc.

Or, perhaps more simply, how can Rhode Island consider honoring the “moral obligation” related to the bonds issued for the now bankrupt 38 Studios before they honor the legal and moral obligations to retired and active state and municipal workers and teachers?

The intent of the above in not to argue the entire legal case in this article, but to point out that there is much room to conclude that Rhode Island elected leaders left many more reasonable options on the table. And that conclusion means that the changes made to the pension system do not stand up to legal scrutiny. Perhaps that is why the City of Providence, faced with a similar set of facts, chose to negotiate with the parties involved. Perhaps the State of Rhode Island should have negotiated with the unions in the first place. Perhaps they still should.

April 3, 2012April 3, 2012

Taveras Beheads Flanders; Chafee Should Give Him Haircut

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Bob Flanders seemed to take a perverse pleasure in threatening other people’s livelihoods. But yesterday he was the one who got beheaded rather than getting a haircut when Providence Mayor Angel Taveras severed the city’s relationship with the Central Falls receiver-turned-municipal bankruptcy zealot.

Taveras fired Flanders yesterday because the retired Supreme Court justice, who was acting as an legal adviser to the Capital City in its quest to avoid going belly up, said he thought bankruptcy was inevitable.

“Judge Flanders’s recent comments concerning Providence’s fiscal crisis are unacceptable,” said Taveras in a statement. “Because of the harm his comments have done, effective today the City of Providence has severed its relationship with Judge Flanders.”

Somewhere between being named the receiver for Central Falls and being fired as a bankruptcy adviser to Providence, Flanders had become both obsessed and enamored with the idea of municipal restructuring. He penned pieces extolling bankruptcy’s benefits, and seemed to tell anyone who would listen what a boon Chapter 11 could be.

He even traveled to a bondholders conference in Philadelphia and, in trumpeting the virtues of coerced contract negotiations, according to the Huffington Post, said, “We could blow up any contract we liked.”

Turns out, however, that Providence didn’t mind blowing up his contract either.

Flanders had become an outspoken and often obnoxious force in the realm of municipal restructuring. He turned even ardent supports against him when he gave a poorly-received performance at the annual Follies, cracking wise about his job of stripping working class people of their agreed upon retirement plans. Dressed as an executioner, Flanders likened himself to Darth Vader and called himself the “lord of the pink slip.”

Prior to that, Gov. Chafee had to revoke Flanders decision to outlaw street parking in Central Falls after it became painfully evident that the decision was little more than a way to charge Central Falls residents for having cars (most homes in CF don’t have driveways, so parking on the road is the only option). He’s being sued by the ACLU for not properly adhering to the state’s rules for democracy in his role as Central Falls receiver.

While Flanders has done good work in getting Central Falls’ budget back in line, he proved disastrous at the public relations aspect of his role. He came across as arrogant and uncaring. He belittled the people he was supposed to be helping. He made Rhode Island seem like a state that didn’t care about its struggling communities, only their bottom lines.

Gov. Chafee would be wise to show the same kind of leadership that Taveras did and rebuke Flanders for giving municipal bankruptcy a bad name. But he shouldn’t be removed as Central Falls receiver; Chafee should simply slash Flanders exorbitant contract that pays him more than $360,000 a year.

Surely, Flanders would be amenable to taking less money to be the “lord of the pink slip” in Central Falls because, as we all know, a haircut is better than a beheading.

March 23, 2012March 25, 2012

Fla. Judge Rules Pension Reform Unconstitutional

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If a Rhode Island judge views pension reform laws the way a Florida judge recently did, public sector retirees may not have their benefits cut after all.

“This Court cannot set aside its constitutional obligations because a budget crisis exists in the State of Florida,” wrote Circuit Court Judge Jackie Fulford in her ruling that the state legislature could not enact a new law that required state employees to contribute to their pensions and forgo annual cost of living increases.

Here’s an article on the ruling from the Miami Herald.

Judge Fulford ruled that the law was “an unconstitutional impairment of plaintiffs’ contract with the State of Florida, an unconstitutional taking of private property without full compensation, and an abridgment of the rights of public employees to collectively bargain over conditions of employment.”

While many have argued that Rhode Island state workers do not have a contractual right to a pension, there is language in this state’s law that created the system suggesting that the legislature intended otherwise.

“All employees as defined in chapter 8 of this title who became employees on or after July 1, 1936, shall, under contract of their employment become members of the retirement system and shall receive no pension or retirement allowance from any other pension or retirement system supported wholly or in part by the state of Rhode Island,” reads Chapter 36-9-2, part of the set of laws that created the state employee pension system.

Rhode Island’s landmark pension reform law passed in a special session last year has yet to be challenged in court because no one has standing to challenge it until the cuts actually kick in. For current employees that will be this summer and for retired state workers that won’t happen until January. It is expected that the law will be challenged in court.

March 16, 2012

Chafee’s Municipal Plan Helps Poorest Towns Most

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It’s hard to be happy about something that will hurt so many working class retirees across Rhode Island, as would Governor Chafee’s proposed bills to help cities and towns. But Chafee designed his suite of legislation to help the most cash-strapped communities the most, which is the right way to handle the state’s municipal fiscal crisis that is disproportionately plaguing the poor.

Rather than giving every community the ability to suspend annual pension increases, Chafee’s proposal would only allow those with pension funds less than 60 percent funded to exercise this tool, reports the Providence Journal. While no retiree deserves to have the deal they struck changed, at least this wasn’t a blanket exemption.

Chafee also made a number of cost-saving tools only available to the “most distressed” communities. As we reported earlier this week, those four communities are Providence, Pawtucket, Woonsocket and West Warwick. Ian Donnis has a good list of the relief measures offered to these cities and towns.

While Ted Nesi notes that former Governor Carcieri offered some of the same mandate exemptions that Chafee proposed yesterday, the big difference is Chafee’s bottom-up approach. Carcieri’s proposal was a blanket exemption to every municipality and Chafee’s is need-based. RI Future has held the former governor’s feet to the fire for cutting so much money from cities and towns that had so little. So did Chafee earlier this week.

Here’s hoping that Chafee’s proposal sparks a big debate in the General Assembly about the disparity between the haves and have-not communities in Rhode Island as this is arguably the biggest affliction affecting the entire state. After all, no one is talking about how rough it is for East Greenwich, Barrington and South Kingstown have it. Rather it’s the plight of Central Falls, Woonsocket, West Warwick, Pawtucket and Providence that is pulling our state down.

March 5, 2012March 5, 2012

Promise Breakers: Taveras, Raimondo and Flanders

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taveras_sotc_close — Providence Mayor Angel Taveras from the State of the City speech.

Providence Mayor Angel Taveras now joins General Treasurer Gina Raimondo and Central Falls receiver Bob Flanders in a very exclusive group of Rhode Islanders. You’ve heard of the Promise Keepers, right? Well, these three are the promise breakers.

All three have asked retirees, in no uncertain terms, to give up a portion of the post-employment benefits that they previously negotiated for and agreed upon. They asked for a contractual mulligan, if you will.

Not that Taveras, Raimondo and Flanders don’t each have difficult situations to deal with – they do. But while fiscal health is important, so is being known as a community that keeps its word. And at this rate, Rhode Island is in grave danger of being known as the state where contracts are made to be broken.

This won’t serve the state well in any future negotiation, even if it’s with a big company looking for a tax incentive to relocate here. If we did it to the people who served and protected us, they might reason, why would they not also do it to us?

But on a more elemental level, faith in government is really all that holds us together as a civic community. Once we can’t trust our government to keep its word, all bets (and social contracts) are off. I’m not saying we’re there, or even close, but we should certainly do whatever we can do to avoid that path altogether.

Give Taveras credit here. Of the three promise breakers, he has leaned the least on the contractual mulligan strategy. Before going to the retirees, he raised taxes significantly and fought hard to raise revenue through other means, most notably by begging the colleges and hospitals to ante up as well.

And he has been pretty honest about his ask. When I asked him prior to Saturday how he felt about asking for such concessions, he was pretty blunt about it: “A lot of people have gone forward based on promises that have been made and most of them have kept their side of the bargain. Obviously the city is at this point saying we need to change our side of the bargain and that is always a difficult thing.”

At his plea to retirees on Saturday, he repeated several times, I’m told, that his ask was by no means fair. He repeated it to Ted Nesi later in the day.

Raimondo, on the other hand, sold her pension-cutting plan under the banner of being fair, that is when she wasn’t fist-pumping to the pro-business crowd. And Flanders … well, I’d be surprised if the concept of fair ever even occurred to him. He simply threatened to behead retirees if they didn’t agree to his pension-slashing terms. Seriously, he told them “a hair cut is better than a beheading.”

In the short term, Taveras’ more humanistic approach may save fewer dollars. But it’s little wonder he’s the most popular pol in the state. And in the long run, that kind of political capital can get you a lot more concessions than deception or decapitation.

February 13, 2012February 14, 2012

State of the City: Employees, retirees give first

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Providence Mayor Angel Taveras delivers the annual State of the City address.

As expected, Mayor Angel Taveras said the state of the city is not so good.

“Providence is in peril,” said the mayor of the capital city to lead into the annual State of the City speech. And, as he reiterated throughout his 20 minute address, it’s up to retirees and tax-exempt landowners to save it.

The city is still $22.5 million short of being fiscally solvent this year and – short of raising property taxes, which Taveras said was an option of absolute last resort – the only place left to turn is retiree benefits and the colleges and hospitals in the city. The retirees already pay taxes, the hospitals and colleges don’t.

Brown University is willing to pay more than the $2 million they already give to the city, and perhaps the big news of the speech was that a deal with Johnson and Wales is imminent.

“I am hopeful that this week we will announce a new agreement with Johnson & Wales University, reaffirming the University’s strong commitment to our city,” Taveras said.

No word on whether or not the six hospitals in the city are willing to step up.

“Our tax-exempts cannot stand quietly on the sidelines any longer,” he said. “If they refuse to compromise, we will hold them accountable by other means.”

The “other means” may be the legislative package the city prepared for the General Assembly. After his speech. Senator Rhoda Perry said the Providence caucus will begin to consider the package later this week.

Still, Taveras is looking for more from the retirees than he is from the tax-exempt institutions in the city. He is hoping to get $7.1 million from the nonprofits and promised to get at least twice that from retirees.

“This must stop now,” Taveras intoned. In the written version of his speech, distributed to members of the media, there was an exclamation mark, to drive the point home.

He was speaking about retirees who receive 5 and 6 percent annual increases to their pension benefits. We hear a lot about the unsustainable 5 and 6 percent increases, but what you rarely hear is that this accounts for only about 20 percent of retirees.

That said, the vast majority of the mayor’s speech was dedicated to thanking the municipal workers who have already sacrificed for the city. When Taveras inherited Providence’s fiscal woes, there was a $110 million structural deficit. He cut it to a fraction of that, in part, by shrinking the size of city payroll by some 200 employees.

We owe a debt of gratitude to our city workers from Laborers Local 1033 who keep this city running every day and were the first to agree to significant concessions to help the City,” Taveras said. He also thanked the police and fire unions, who made significant concessions in their contract negotiations.

While employees, retirees and nonprofits are being asked to help, there is one constituent group the mayor said he would like to avoid tapping into: the taxpayer. While he didn’t say a tax increase was off the table, he did call it “untenable.”

Update: An earlier version of this story indicated that Taveras wants retirees to contribute $8 million to help the city out of its deficit. In fact, that is only the health care portion of retiree benefits that Taveras hopes to save.

September 9, 2011January 6, 2012

Connecting the Dots In the Rhode Island Pension Crisis

August 3, 2011January 21, 2012

Rhode Island Public Sector Unions Form New Coalition

Rhode Island Retirement Security Coalition Website
www.RhodeIslandRetirementSecurity.org

Rhode Island Public Sector Unions Form New Coalition

Group to Study and Advocate for Public Employees in Pension Change Debate

Providence, RI — A new coalition of public sector unions was announced today to advocate for public employees in the ongoing pension change debate. The Rhode Island Retirement Security Coalition was created to educate and inform the members of the coalition’s unions on the potential changes to the state retirement system that are being discussed this summer at General Treasurer Gina Raimondo’s Pension Advisory Commission and this fall in a special session of the General Assembly.

The Rhode Island Retirement Security Coalition is composed of: the Rhode Island AFL-CIO, AFSCME Council 94, the Rhode Island Federation of Teachers and Health Professionals, the National Education Association Rhode Island, the Service Employees International Union- Locals 580 and 401, the Rhode Island Brotherhood of Correctional Officers, the International Brotherhood of Police Officers- NAGE/SEIU, the Laborers International Union of North America, and the International Federation of Professional and Technical Engineers- Local 400.

“With so much information coming out almost daily many of the rank-and-file members are understandably confused and scared about what is going on with their pensions, which they have faithfully paid into week after week and year after year,” said coalition spokesperson George Nee, President of the Rhode Island AFL-CIO. “The Rhode Island Retirement Security Coalition was put together so the unions could provide timely and relevant information to their members and the public.”

In an effort to reach their members quickly, the Rhode Island Retirement Security Coalition launched a website (www.RhodeIslandRetirementSecurity.org) today that allows union members and the public to access information, news stories, reports, and give their input into the discussion on the pension situation in Rhode Island.

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