Experts React to Rhode Island Pension Reform Agreement
Monday, February 17, 2014
“This proposal should not be perceived as a victory by one side over another, rather it is a positive first step forward providing for the continued stability and predictability of the retirement system for decades to come. Crucially, this proposal does more than end the risks associated with a costly and protracted litigation. This settlement proposal would resolve six pending lawsuits contesting changes made in 2009, 2010 and 2011. It also demonstrates that our small state can lead the rest of the nation and come together to solve big problems," said Chafee and Raimondo.
Initial Reactions from Rhode Island Leaders
Gary Sasse, former Director of Administration and head of the Rhode Island Public Expenditure Council, said, "Labor's ability to negotiate give-back is a victory for public employees. There are no free lunches so the settlement will add to the future cost of state and local government. Increasing the unfunded liability is in marked contrast to the policy goals of pension reform."
Executive Director of the Rhode Island League of Cities and Towns Dan Beardsley took issue with the not just the settlement but with Govenor Chafee's statements at the press conference.
"First of all, I guess the Governor made a comment at the presser that "the lone dissenting vote by Dan Beardsley was probably coming from [Mayor] Fung's opposition" -- not only am I appalled that the Governor would stoop to such petty politics, as a former president of the League, he should be ashamed of himself for making such a comment," said Beardsley. "I've never cast a vote on the whims or wishes of one of my members -- I represent all the cities and towns, I'm not at the whim of one employee, those I've worked with have trusted me for over 40 years."
Beardsley continued, "As a member of retirement board, I cast a vote in opposition because the local share of teacher contributions will increase $7.9M in FY16, the MERS will increase 2.6 M in 2016, police and fire MERS units will increase by $600K in FY16. In all, the total unfunded accrued liability will increase by $109M.
"For what it's worth, the total cost increase may seem inconsequentially small to the administration overseeing an $8B budget, but tell that to the distressed communities, rubbing pennies together, like Pawtucket, and Woonsocket -- try to explain to those communities that this is inconsequential," said Beardsley.
Mayor Fung was vocal in his opposition following the settlement announcement. "I'm going to reach out to GA members not to approve this -- the increased costs will be passed down to taxpayers in FY16, as well as an increased unfunded liability. That's a concern of mine. I think once the taxpayers of Rhode Island start finding out what this bill could mean to them, they're doing to be concerned as well."
Taxpayers on Record
"My initial reaction, setting aside the details financially, it's a difficult pill to swallow," said Lisa Blais with Rhode Island taxpayer advocacy group OSTPA. "And to hear the Governor and Treasurer to talk about certainty, and financial stability and the right thing to do for taxpayers and pensioners -- and this is exactly what were heard in  when the reform was advocated for, and was passed."
Blais continued, "The bottom line is that they completely avoided dealing with the big question of that lawsuits were brought based on the constitutionally of the [General Assembly] passing the statute, changing the detail of how the pension law would work -- and yet in secret mediation, labor isn't crying foul over constitutionally issue, because they've now bargained increased benefits."
"From a taxpayer perspective, it leaves many people with the feeling we're at the whim unions and politicians, that we're their ATM," said Blais. "We've got cities and towns teetering on the brink of bankruptcy, programs being cut, taxpayers who just recently had to deal with net property tax increases up until 20%, we're supposed to say, this isn't so bad? It's a hard pill to swallow to watch the Governor and General Treasurer ignore separation of powers -- they left the General Assembly out of the room altogether.'
Former Congressional candidate and financial analyst Michael Riley added, "I have concerns on the added cost to the many vulnerable cities and towns as well as the extended nature of the process. We really need to address the cities before its too late."
- Majority of Anti-Pension Reform Lawmakers Returning to Smith Hill
- State Report: Rhode Island Pension Reform & Falling Off the Fiscal Cliff
- Council at Odds: Members Call for Changes to Pension Reform
- NEW: EngageRI Supports Providence Pension Reform
- Tea Party Lines Up Behind Treasurer Raimondo on Pension Reform
- Does Rhode Island’s Pension Reform Law have Any Hope of Survival?
- NEW: Former Union Head Day Blasts City Council on Pension Reform
- Will the State & Organized Labor Reach a Deal on Pension Reform?
- Donna Perry: Don’t Ruin the RI Pension Reform Law
- NEW: Raimondo Featured In Institutional Investor on Pension Reform
- Donna Perry: No Time for Timid Pension Reform in Providence
- Pension Reform Lawsuit Decision: The Timeline
- NEW: Hassett and Igliozzi Call for Changes to Providence Pension Reform
- Donna Perry: Time for Heavy Lifting on Disability Pension Reforms
- Providence Would be Devastated if Courts Block Pension Reform
- NEW: Judge Won’t Halt Pension Reform Law
- Experts React to Rhode Island Pension Reform Agreement
- REPORT: RI Public Pension Reform - Wall Street’s License to Steal
- NEW: Mediation Ordered in State Pension Reform Lawsuit
- Lawmakers Rake in $120k Since Voting Against Pension Reform
- Russell Moore: Don’t Gut Pension Reform
- NEW: Providence Retirees Approve Pension Reform