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pension reform – RI Future http://www.rifuture.org Progressive News, Opinion, and Analysis Sat, 29 Oct 2016 16:03:26 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.25 Sleepless nights and cognitive dissonance at the State House http://www.rifuture.org/sleepless-nights-cognative-dissonance/ http://www.rifuture.org/sleepless-nights-cognative-dissonance/#comments Thu, 11 Feb 2016 14:31:10 +0000 http://www.rifuture.org/?p=58839 Speaking at the Greater Providence Chamber of Commerce (GPCC), alongside Senate President Teresa Paiva Weed and Governor Gina Raimondo, Nicholas Mattiello proudly ticked off a list of his tax cutting accomplishments since becoming Rhode Island’s Speaker of the House.

We’ve reduced the corporate tax rate in Rhode Island.

“We exempted sales tax on energy costs to assist businesses.

“We raised the exemption on the estate tax to keep successful folks in the State of Rhode Island.

“We eliminated the social security tax on many Rhode Islanders so we can assist the middle class after a lifetime of commitments so that they can stay and thrive in Rhode Island.

“We eliminated tax on radiology services to assist that industry.”

Acting as the self-appointed Yin to Mattiello’s Yang, Paiva-Weed spoke about how the Speaker and Governor stood with her “to take some of the most difficult votes the General Assembly could take to cut the budget…

One of them was last year… and that was cutting $70 million from Medicaid. That was a hard vote…

“In addition, many of you in this room were not standing here cheering when we had to make those difficult votes to ensure the passage of pension reform. And that was a vote that quite honestly kept me up many nights, because it really did hurt people…”

It really did hurt people.” Let that sink in for a moment.

 

“We raised the exemption on the estate tax to keep successful folks in the State of Rhode Island,” the Speaker had said, not five minutes earlier.

 

DSC_0974
Teresa Paiva-Weed

The message was as jarring as it was obvious: Tax cuts on the rich hurt people. Our leaders know this, but they don’t want to believe it. It’s called cognitive dissonance.

Beyond just hurting people, poorly targeted tax cuts do nothing to help the greater economy and instead impoverish a government’s ability to maintain infrastructure. Hence, RhodeWorks.

RhodeWorks will shift the financial burden of repairing RI’s roads and bridges onto trucking companies, who will maintain their profits by increasing the price of goods. This will burden the poor and middle class much more than it will the rich, who will be able to manage slight price increases by drawing on the extra money they keep through the tax cuts they’ve been granted.

Mattiello
Nicholas Mattiello

Despite Paiva-Weed’s protestations, she has not cast “difficult votes”. A difficult vote would be one in which she stood up for those without power and against the money of the connected elite. A difficult vote would be one of compassion and courage.

No, the votes Paiva-Weed made were easy, because the people she hurt have no power to hold her accountable for their pain. Her conscience might bother her, but what good is a conscience when the corporate tax rate needs to be cut?

As for Mattiello, after he proudly listed his accomplishments, he said, “We have been laser focused on moving our economy forward and doing the kind of things that build economic wealth and growth and jobs in the State of Rhode Island.”

“And then I hear,” said Mattiello, pausing as the cognitive dissonance crackled through his brain, “that there’s a consensus that we have the worst roads and bridges in the country and it’s the leading concern of businesses. It’s the number one driving force for businesses in their decision making.” Another pause.

Mattiello’s pauses say it all. All that money he gave away to his well off neighbors was for nothing. All those cuts to pensions and Medicaid were for nothing and all those people hurt by these cuts were hurt for nothing.

Our leaders bought the lies of economic charlatans, gave away millions in tax cuts, impoverished our state and hurt people terribly, only to find that what was really needed was a strong infrastructure, an infrastructure we might have been able to afford if we weren’t crippling our economy by cutting the taxes of dead millionaires.

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Why the pension settlement was a good deal for future taxpayers http://www.rifuture.org/why-the-pension-settlement-was-a-good-deal-for-future-taxpayers/ http://www.rifuture.org/why-the-pension-settlement-was-a-good-deal-for-future-taxpayers/#comments Sat, 22 Feb 2014 12:34:41 +0000 http://www.rifuture.org/?p=32614 Continue reading "Why the pension settlement was a good deal for future taxpayers"

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raimondo fist pumpFuture generations studying Rhode Island at the turn of the 21st Century will be embarrassed when they get to the part on pension politics.

Those were the days, they will note, when economic growth hit a bump in the road and some of the richest people in society launched a very expensive, targeted and secretive campaign to take from the people who work for the people.

Those future historians will see that the ultimate losers in this “landmark reform” were the only ones who played by the rules and paid their fair share. There’s just so much inherently wrong with that, and history never judges such circumstances kindly – even though they probably all seemed to be the best course of action in the present tense.

And, of course they will see a Wall Street millionaire who made her foray into politics to accomplish this taking. And they will see that she used a Wall Street billionaire’s dark money to do it. And they will see, in the short term at least, that the taking didn’t end up as savings but rather a transfer of wealth to other Wall Street millionaires and billionaires.

But those future historians studying Rhode Island will also see a society that tied itself in all sorts of logical knots to pull this off.

They will see that we calculated the costs of pensions much differently than any other public spending item. Imagine what the “unfunded liability” would be for even a single school or for corporate tax subsidies to CVS alone!

They will see that the same labor leaders who were fighting against pension cuts were also begging to repeal the tax cuts given to Rhode Island’s richest residents while pensions were being underfunded. They will see that as we were cutting pensions, we were also ensuring that Wall Street bondholders would always get paid before said pensioners.

And those future historians will see that the biggest newspaper and radio station in the state engaged in a borderline misinformation campaign through their wildly one-sided opinion and analysis of the situation.

And those future historians will see that a “haircut or a beheading” was a mantra in Rhode Island.

And to that end I am glad the state workers, public school teachers and retirees – who were so clearly treated like an oppressed class of people throughout the era of pension political football (even if they did manage to swing a decent deal for themselves back when everyone thought growth was infinite) -took back even just a small slice of their dignity when they state shied away from being taken to court for its “landmark pension reforms.”

To my mind, $230 million is small price to pay for Rhode Island’s reputation as a decent society. It means for the rest of history we get to answer, “Not us, we settled out of court instead” when asked: “Hey isn’t Rhode Island the state the ruthlessly screwed over its teachers and plow drivers like a bunch of fist-wagging Wall Street barbarians searching for public sector blood?”

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Op/ed writers pick up ‘political football’ fumble http://www.rifuture.org/oped-writers-pick-up-political-football-fumble/ http://www.rifuture.org/oped-writers-pick-up-political-football-fumble/#comments Sun, 13 Oct 2013 13:09:31 +0000 http://www.rifuture.org/?p=27565 Continue reading "Op/ed writers pick up ‘political football’ fumble"

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wallstmainstForget the football analogies, maybe Ed Achorn was writing this morning’s misleading Providence Journal editorial while his beloved Boston Red Sox were getting goose-egged by Detroit (his most reviled municipality) last night?

Like Gina Raimondo did in 2011, the Sox crushed the ball against Tampa Bay. But last night the hirsute home team looked more like the Gina Raimondo of 2013, swinging and missing against more major league pitching. Raimondo’s only hit since being at-bat against the likes of Ted Seidle and Matt Taibbi has been to label the recent influx of high-and-tight, hard-hitting, anti-Wall Street journalism as “political football.”

I posted about political football Wednesday morning and both ProJo op/Eds (Fitzpatrick and Achorn) followed suit this weekend. It was an obvious great line right from the get-go. Interestingly, the Providence Journal news coverage led with the quote in print and the online version ended with it.

Ed Fitzpatrick looked at how the national narrative about Raimondo has gone from protagonist to “Wall Street Raimondo.” (we like to call Raimondo a Wall Street Democrat). I wrote that I thought it hypocritical that Raimondo used pensions as a political football when it was to her advantage and dismissed them when it did not.

Conversely, Ed Achorn wrote that people in unions are against good. And those who support their interests are childish. And failing to cut pensions would have been akin to “murdering” the private sector. (I am not making this up, you can read it for yourself here!!) It begins:

Frank Caprio, the last Democratic nominee for Rhode Island governor, made his mark by pledging to stand up to the special interests and fight for the common good. Public-employee unions did not like that very much, and turned on him with a vengeance in 2010, tearing down Mr. Caprio while dragging Lincoln Chafee into the governor’s office.

But wait, it gets even more ridiculous. Those who don’t agree are just being childish:

It would be nice to make politically powerful groups happier with more generous retirement benefits, but grownups realize the state has only so much to spend on government. There are other areas that cry out for funding; notably education, roads and bridges, and programs to help the neediest among us.

I would agree that education, infrastructure and ending poverty are more important that pensions, and so would every single retiree. Where we disagree is whether these are either/or propositions. Well, Rhode Island’s paper of record’s official editorial voice actually wants you to believe that cutting pensions was necessary to save capitalism!

Murdering the goose that lays the golden eggs — the private sector — would have hurt public employees vastly more than making some reasonable changes in the system. Reform was a question of math, not politics.

Well Rhode Island, if you thought the Ed Achorn era as op/ed editor was bad, wait till we get a healthy dose of the Ed Achorn era minus Froma Harrop. The ProJo really needs to send Achorn to the showers and bring in someone from the bullpen who isn’t scuffing the ball.

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Stop calling the pension cuts a ‘reform’ http://www.rifuture.org/stop-calling-the-pension-cuts-a-reform/ http://www.rifuture.org/stop-calling-the-pension-cuts-a-reform/#comments Fri, 16 Aug 2013 09:40:07 +0000 http://www.rifuture.org/?p=25707 Continue reading "Stop calling the pension cuts a ‘reform’"

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enron pension“Pension reform.”  It’s a phrase we’ve all heard.  We’ve heard it from right-wing pundits and conservative politicians.  We’ve heard it from ALEC.  We’ve heard it from RIPEC.  We’ve even heard it from labor leaders, progressive politicians, and the august pages of this blog.  I’m embarrassed to say I’ve heard those words tumble out of my mouth.  And that’s a problem.

Rhetoric matters.  Conservatives never say they want to cut Social Security, they say they want to “reform” it.  It’s the same story with Medicare, Medicaid, food stamps, and welfare.  And pensions.  At the national level, liberals occasionally slip up and say, “entitlement reform,” but most liberals and unbiased journalists call cutting Social Security “cutting Social Security.”  So it is a touch odd that in Rhode Island we adopted this right-wing phrasing whole cloth.  Somehow, everyone started calling the pension cuts “pension reform.”

It’s time to stop.  A few months ago, the Rhode Island Progressive Democrats made a decision.  We decided we were going to call the pension cuts exactly what they are–pension cuts.  I’m asking you to join us.  Call the cuts cuts.  Whenever you hear anyone say, “pension reform,” correct them.

The correct phrase is “pension cuts.”

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Can RI Take Tips from Illinois Pension Reform Bill http://www.rifuture.org/can-ri-take-tips-from-illinois-pension-reform-bill/ http://www.rifuture.org/can-ri-take-tips-from-illinois-pension-reform-bill/#comments Tue, 08 Jan 2013 17:06:21 +0000 http://www.rifuture.org//?p=17562 Continue reading "Can RI Take Tips from Illinois Pension Reform Bill"

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From a YouTube video made by Illinois Gov. Pat Quinn.

As mediation starts this week, someone might want take a closer look at Illinois proposed pension reform legislation.

The bill might not pass there, but it might be worth using as a model in mediation here because it corrects a similar-sized unfunded liability in a way that seems less onerous on retirees without raising taxes in roughly the same period of time.

Although Illinois is the only state in the country with a pension plan in worse shape than our own, the proposed legislation there would only freeze COLAs for six years, according to the Chicago Tribune.

Among the key features of the House plan is a freeze on cost-of-living increases for all workers and retirees for as long as six years. Once the cost-of-living bumps resume, they would apply only to the first $25,000 of pensions. The inflation adjustments also would not be awarded until a person hits 67, a major departure  public employees who have been allowed to retire much earlier in some cases and begin reaping the benefits of the annual increases immediately.

Of course, the devil is in the details, but it can’t hurt to give this a once-over. Also, it’s worth noting that we didn’t have to reform pensions in a fashion so impressive to the ALECs and Manhattan Institutes of the political worlds…

NPR did a really well-balanced story on Illinois’ pension reform efforts this weekend. Aside from having the two most unfunded state pension plans in the country, NPR points out another similarity with Rhode Island’s pension problems:

Over those many years, Illinois’ teachers, state troopers, university professors and other state employees have been paying their share, contributing about 8 to 12 percent out of every paycheck to their pension funds. But the state hasn’t.

They also included this pretty cool YouTube video Democratic Gov. Pat Quinn made:

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Fla. Judge Rules Pension Reform Unconstitutional http://www.rifuture.org/florida-judge-rules-pension-reform-unconstitutional/ http://www.rifuture.org/florida-judge-rules-pension-reform-unconstitutional/#comments Fri, 23 Mar 2012 07:00:32 +0000 http://www.rifuture.org//?p=4157 Continue reading "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.

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