NEW: Taxpayer Group Praises House Budget
Monday, June 20, 2011
The Rhode Island Statewide Coalition today praised the House for dropping most of Governor Lincoln Chafee’s 6 percent sales tax proposal, but said state lawmakers have not gone far enough in making changes to employee compensation.
“We’re relieved to see House leadership scrapped most of the new taxes, but they dropped the ball on the proposal to have public employees pay their fair share through higher contributions to their own pension plans and by allowing another pay raise,” said RISC Executive Director Harriet Lloyd.
Second pay raise for employees in six months
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The revised budget preserves a 3 percent raise for state employees, their second in six months, which RISC said will cost the state $25 million. It also eliminates Chafee’s proposal that state employee and teacher contributions to their pensions increase from 9 percent to 11.75 percent, which would have yielded $40 million in savings.
“They took a small step forward by phasing out longevity bonuses but taxpayers are not gaining much in this budget with no change in employees’ contributions and yet a new pay raise in the midst of a fiscal crisis,” Lloyd said.
MAST axed
The House budget also scrapped one of the more innovative aspects of the Governor’s budget—the Municipal Accountability, Sustainability, and Transparency (MAST) program. MAST rewarded cities and towns that fully funded their pension plans with increased state aid, but critics said it would lead to higher taxes because it did not give communities the tools they need to reduce retirement costs.
“The MAST program only addressed the contribution side of pension plans for communities without helping them reduce retirement costs and do away with unaffordable mandates in contracts,” Lloyd said. “MAST would have hurt communities eventually rather than help them.”
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