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Will the State & Organized Labor Reach a Deal on Pension Reform?

Wednesday, December 19, 2012

 

The decision by Superior Court Judge Sarah Taft-Carter to order the state and public employee unions into mediation to negotiate a settlement over the state’s pension overhaul was met with mixed reaction Tuesday, with Governor Lincoln Chafee and labor leaders praising the decision and taxpayer advocates questioning whether a deal is even practical.

Taft-Carter’s announcement came several weeks after Chafee, union chiefs and several municipal leaders such as Providence Mayor Angel Taveras and Cranston Mayor Allan Fung suggested that returning to the table for negotiations may be the state’s best chance at achieving pension reform. General Treasurer Gina Raimondo –the key architect behind the deal— and House Speaker Gordon Fox disagreed, arguing that the time for negotiations was in 2011 when the General Assembly passed pension reform legislation.

“While the state has a strong case, a strong case does not guarantee a win,” Chafee said Tuesday. “A negotiated settlement that is satisfactory to both sides could be in the best financial interest of the Rhode Island taxpayers. Such an outcome would be a favorable alternative to costly, uncertain litigation and – worst of all – the ‘fiscal calamity’ of a potential loss in court.”

Last year, Chafee signed legislation into law that moves public employees in a 401k-style hybrid plan, freezes cost-of-living-adjustments (COLAs) and raises the retirement age for many union workers. In doing so, state’s unfunded pension liability was reduced by $3 billion the state was expected to save nearly $300 million by 2013.

But the unions are challenging the legality of the sweeping reform package and have long been calling for negotiations. Rhode Island Council 94 president J. Michael Downey said he was pleased with Taft-Carter’s decision to order all side back to the bargaining table.

“We’re excited about the idea of mediation,” Downey said. “Hopefully it will give us the chance to be heard. I know many of the state’s leaders said that they had all kinds of meetings where labor got a chance to be heard, but we were never listened to. It’s our desire that the mediations will produce a resolution to this pension lawsuit and Council 94 is willing and ready to meet in good faith and we hope we can resolve our differences in mediation.”

Raimondo: State will Negotiate in Good Faith

By entering mediation, the state and the unions will attempt to reach a settlement in similar fashion to the way the city of Providence reached an agreement with its municipal unions and retirees earlier this year. The two sides are expected to update Taft-Carter on their progress in February and if a deal cannot be reached, a trial could begin next spring.

There are some differences to the situation in Providence, however. In the city’s case, the request to enter mediation came from both city officals and the unions; on the state side, Treasurer Raimondo has maintained that she believes the legislation will hold up in court. Still, Raimondo said she is willing to give negotiations a chance.

"I have great respect for the judicial system and it is important to let this process unfold in an orderly and transparent way,” she said. “We owe that to the people of Rhode Island and to our public employees. We continue to believe the state has a very strong case and a terrific legal team. As I have consistently said, we will participate in court-ordered mediation in good faith."

Critics: Mediation Means Concessions

But critics say any deal that doesn’t include the key portions of the legislation would be detrimental to the state. Rhode Island Statewide Coalition executive director Donna Perry said it appears Chafee has spent too much time listening to the unions and suggested the settlement talks will prove whether or not he’s willing to stand with the taxpayers.

“It’s worrisome that the first major ruling by Judge Taft-Carter on this landmark case is to order mediation talks,” Perry said. “Taxpayers have to be concerned about the direction this judge may take with this case and can only hope that with the court looking on, the unions may become more conciliatory on the larger reform points than they historically have been.”

Ocean State Tea Party in Action spokesperson Lisa Blais agreed with Perry. She praised the pension reform legislation for helping to create a solvent system for its pensioners and saving the state from financial ruin.

“The question must be answered here in Rhode Island: Will the public unions control Rhode Island’s economic destiny or will sanity prevail for the best interest of every taxpayer? Bottom line, mediation means concessions, which translates into regressive, unsustainable costs to taxpayers,” Blais said.

State Senator: Any Deal Must go Back to Legislature

Still, even if a deal can be reached, any changes to the legislation would have to go back to the legislature, which is why State Senator Dawson Hodgson said he was surprised that Taft-Carter called for mediation in the case.

“While the judiciary has authority to invalidate all or part of a statute (which is what the plaintiffs are requesting in their lawsuits) no one has the power to rewrite the law the way they see fit,” Hodgson wrote in an e-mail to GoLocalProv.

Hodgson said that unless provisions of the legislation are nullified by the court, it will have to go back to the legislature for any changes.

“To me, it seems that mediation only makes sense when the parties at the table actually have the power to resolve the dispute,” he said.

 

Dan McGowan can be reached at [email protected]. Follow him on Twitter: @danmcgowan.

 

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Comments:

I love it that Donna Perry is now the Golocal go to person on a daly basis. Does she consult her radio loser brother on these comments? What a joke this paper is becoming,

Comment #1 by tom brady on 2012 12 19

Tom, it's been a joke for a while now.

I'm sure when they're done negociating, it'll end up costing taxpayers more than it already does now.

Comment #2 by pearl fanch on 2012 12 19

Pearl, the problem with this state is that they constantly go after the middle class to support the growing Socialist movement in Providence and other cities. They claim they have no money, but the Mayor travels with his entourage to the tune of half a million etc... So if you really want people to give up pensions and such, then start at the top. Statewide, Providence, all the friends are taken care of, new jobs created when we have no money. That is why we are back to negotiations. Our LEADERS can't keep their hands out of the taxpayer cookie jar. This pension reform will go down like a molotov cocktail.

Comment #3 by tom brady on 2012 12 19

"Last year, Chafee signed legislation into law..."
Soooo... now that I am going to run again for Gov I need to get labor back in my corner. I decided to become a Dem and change my mind on the pension law that I signed last year.
Governor Chafee YOU are everything that is wrong with our civic leaders today. It's all about YOU and your private agenda.
In your defense... RI's get what they vote for. A self-serving, incompetent, arrogant, phony.

Comment #4 by Chris MacWilliams on 2012 12 19

Phony tax-payer groups. Just fronts for billionaires buying influence.

Comment #5 by Real Clear on 2012 12 19

I see this decision by the judge as a cowardly political decision. There is no practical way to rewrite this law. It was negotiated long ago and the unions were heard and had plenty of time. Their strategy has always been to give little or nothing , maintain defined benefit programs and threaten court action. Well, here we are and the judge punts. Just like every one else has. How many of us are sick of seeing supposedly responsible people refuse to take real action to fix real problems? This court decision is weak and is a "punt".

Comment #6 by michael riley on 2012 12 19

Whatever side your on, the best thing for Rhode Island is for a legal precedent to be set. If the unions win that will be the time for future negotiations. If the unions don't win then we can move forward with retirement security for all past, current and future state employees.

Comment #7 by george pratt on 2012 12 19

Pompous Rep and now RISC honcho Donna Perry and her ratings seeking boob brother want sensationalism to prevail and nothing more...
The lawsuit is a risk. The people of the state have enough to deal with...the scams of the Gen Assembly, the URI International Institute scandal still under investigation, the 38 Studios debarcle, now we see Pres of URI's Dooley spending half a million of taxpayer money to refurbish a house that is not even his permanently, and let's not forgot Fox did not report campaign contributions which is illegal and
his role in 38 Studios..still a secret to us...
The people of RI cannot foot the bill of a long and extended court case which could take years based on Raimondo's risky law. What does she care? It's not her money and her support which includes the spineless entity called Engage-RI, (who do not disclose their donors and now millionaire Raimondo is asking for their disclosure...she's becoming a flipflopper) Republicans, union haters and most recently the Texan billionaire who donated $500,000 to her cause.Their only only agenda is to bust unions and public pensions.They don;t care about the people of RI. They care about themselves.....

Comment #8 by dis gusted on 2012 12 19

It is a real mistake to ignore a looming existential debt of multi- billions of dollars and instead focus on Dooley's house or the scams of the general Assembly including International Institute of Sport. Court costs will likely be less than 6 billion or so.. So lets focus and stop throwing up straw arguments for not fighting this in court and giving taxpayers control over their own destiny. I f the taxpayer lost its no different than it was 2 years ago.. We couldnt pay then and we cant pay now. It s worth the risk to forever end taxpayer guaranteed retirements to government workers while the rest of us dont have guarantees.
If we could and we actually had the dollars the right thing to do is end all defined Benefit programs for new hirees and place that experiment in the trash heap of huge public policy mistakes. We should however not be cutting benefits for retired folks that received legitimate promises. 6% colas were not legit. If you are not vested now you should not expect guaranteed salary in the future . No one should. Life is risk, retirement income is risk. Why exactly should we immunize those in the public sector who work for the taxpayers from these risks?

Comment #9 by michael riley on 2012 12 19

We have a socialist movement because we live in a corrupt capitalist system of "haves" and "have nots". Even our pension system is a "have" and "have not" system set up to benefit some retirees better than other retirees. Also, retirees are tax payers too! Abetter reform package could have been pushed by Raimondo, but she's just a gd Republican in Democratic clothing who is in bed with corrupt and selfish big business.

Comment #10 by Mark St. Pierre on 2012 12 19

OUR pension system? i dont have this system only the people i pay from taxes have it

Comment #11 by michael riley on 2012 12 19

you could have had it, if you made that selection mr riley..You make choices in life. We all choose what we want to do. We choose what job we want, if we want to go to college and if we want a union job. So now you show your jealousy Mr Riley by being negative to those who decided to choose the job that included the pension.
There is no one in this state that did not have choice ....to work for a union or not is a free will choice given to everyone...What happens after you choose is the bed you lie in...

Comment #12 by dis gusted on 2012 12 19

Dis gusted,

To join, or not join a union is not a choice in RI. And since your such a big believer in choice, be certain to not bemoan the salaries of corporate execs.

Comment #13 by george pratt on 2012 12 19

I do not bemoan anybody. The salaries of the execs are on the backs of those workers who get nothing and are treated like slaves /told what to do and if they complain, they are fired so they stay and take it.... Instead of trying to elevate these hard working people in getting more, people like you push down the worker's ability to gain more in his employment.
You certainly have a choice in this state to do whatever you want. To join a union is a choice. You can work for a company that will make yo a slave and give you no benefits and these are the corporate giants like CVS, who when they retire, like Tom Ryan get a severence pay, benefits, perks in the millions. You are either naive or stupid to think that years ago when people could select if they wanted to be a teacher, policeman, fire fighter state worker or doctor/lawyer etc., that they did not have choice. You knew up front if the job was a union job or not. The state hired anyone who wanted to work their jobs. There are many corporates who are powerful execs who do not reward their workers. Ask those who work in jobs where if they make a ocmplaint the boss tells them..there;s the door....You must live in a dream world...The goal is to elevate all workers, not push down those who are union workers....

Comment #14 by dis gusted on 2012 12 19

thanks for not bemoaning anyone \
tom ryan

Comment #15 by michael riley on 2012 12 19

"Reach a deal?"

The deal has already been reached in the pension reform legislation signed into law last year.

Now is not time for mediation or weaseling of any kind. It's time to decide if the law stands or does not stand.

Comment #16 by Art West on 2012 12 19

i wasnt ever promised guaranteed retirement or colas , or step increases...nor were you in 1978......to claim that someone elses multiple negotiations (from 1985 til now) is a promise to you is quite a stretch

Comment #17 by michael riley on 2012 12 19

you're wrong...people were promised when reetired you would get what you signed back then whether you wish to believe it or not...

and the tom ryan who responded must be the stand up comedian since the corporate tom ryan would not treat his workers like crap and settle his law suits with dignity

Comment #18 by dis gusted on 2012 12 19

I guess the greedy legalized protection/extortion rackets err I mean labor unions didn't learn anything from Central Falls......

Comment #19 by Russ Hryzan on 2012 12 20

Tom Brady is 100% right. That's the way BOTH the Republicans and Democrats who are in bed with big business want it. They want 99% of the population on food stamps so Billionaires can lord over them. And they don't give a good God damn about the working man anymore.

They don't John Kerry's million dollar tax yachts. But they tax my 1990 Taurus I keep running that's worth a whole $600. They give a flat tax for millionaires, then they cut state aid and my property tax goes up. And I never get the flat tax option. Because I'm middle class. Because I work with my hands. And because I know what it's like to sweat for a living rather than grow fat in a pinstriped suit.

So they will bust the unions to get more money for their buddies that grew up on trust funds to make money on Wall Street and pay their employees less.

And at the same time, they will raise my taxes and my kids' tuition to give free healthcare to free loaders.

That's the problem with this country and this state.

Freeloaders.

And they come in both the $10,000 per year and the $10,000,000 per year variety.

And none of them have ever built or made anything useful in their lives.

Comment #20 by TheRhodeIsland WorkingMan on 2012 12 20

TO: The RhodeIsland Working Man,
You said it eloquently but the people who make the laws won't listen to you. They have their own self serving agendas and we in the middle class are not part of it...
I said it months and months ago that John Kerry's yacht in Newport is not taxed and thus his own state of MA gets no money from him...And this moron will become the next Sec of State
Raimondo and Fox are no different than the Repubs who support them. In fact Raimondo is a millionaire from her 10 yr NY capital investment business and is a Republican in disguise with wealthy friends including Boies and Bloomberg..She is politically driven in everything she does..

Comment #21 by dis gusted on 2012 12 20

its real simple...pension reform has to include an end to defined benefits...no one is entitled to a Guaranteed retirement .... no one

Comment #22 by michael riley on 2012 12 20

I disagree, if an employer enters into a defined benefit contract with an employee, then HONOR THE CONTRACT !. If a defined contract is what's in place then I for one don't appreciate being screwed out of it ! There is no honor in contracts anymore, their just a waste of paper, how disgusting. But, that's just another indicator of what our pathetic society is all about.

Comment #23 by Mark St. Pierre on 2012 12 21




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