Retirees Prepared to Battle City over Mayor’s Threats
Wednesday, February 15, 2012
Several former police officers and firefighters said Tuesday that they should not be blamed for the city’s fiscal woes and vowed to battle it out in court if Mayor Angel Taveras attempts to freeze cost-of-living-adjustments (COLAs) or cap their pensions.
“I think it's an illegal tactic by the Mayor,” former Providence Police Union President Robert Paniccia said. “We already have this thing with the Medicare. It's the same thing. Our sacrifices have been made over the years. And to say you're going to disregard the contract is illegal.”
During his State of the City address Monday evening, Taveras said Providence is "on the edge and staring into a black hole,” placing the blame for the city’s financial issues squarely on retirees and the tax-exempt institutions, who he said have been unwilling to sacrifice to help save the cash-strapped city.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“This year, one way or another, we will address the broken pension and health care systems that are draining our city," Taveras said.
Unsustainable Promises
The city currently faces a $22.5 million deficit in the current fiscal year and has indicated that it will run out of money by June if it can’t reach agreements with the retirees or the nonprofit institutions in the coming months. Taveras intends to hold a meeting with retirees in March, but he has already said that all city retirees will have their benefits cut this year.
Police and fire retirees have already taken legal action against the city after it attempted to move retirees over the age of 65 to Medicare after receiving General Assembly approval during the last legislative session. Judge Sarah Taft-Carter issued a preliminary injunction that stopped the city from shifting their coverage and the State Supreme Court determined last week that it will not expedite the city's appeal or lift the injunction.
"The unsustainable promise of free health care for life continues the burden on the taxpayer increases and the window of opportunity to pull our city out of the black hole grows increasingly smaller," Taveras said during his speech.”
I Live on that Pension
But Paniccia and other retirees say that while they understand Taveras inherited a city in fiscal disarray, they do not believe the city should be allowed to go back on contractual agreements made years ago.
“I signed on for a job and they told me this is your pay, this is your vacation time, this is what you pay for your pension and this is what you get when you retire,” said Paniccia. “I live on that pension. I've got to plan my life. To think that I'm not going to get a COLA is ridiculous.”
The Taveras administration has pointed to the fact that the top 25 pension recipients in the city all make over $109,000 each year, mostly due to five and six percent compounded COLAs that were granted two decades ago. The top recipient, former Fire Chief Gilbert McLaughlin, retired in 1991 at a salary of $63,510.72. He now makes $196,813.08.
Not all retirees are cashing in like McLaughlin. According to city pension records from last April, 75 retirees (or their families) made of $85,000 last year. The average police and fire retiree made about $42,000 in 2011.
Councilman Bryan Principe said he would like to see the city attempt to address the approximately 600 retirees earning five and six percent COLAs before going after every retiree. And while the Mayor has threatened bankruptcy or a supplemental tax hike, Principe said he would like to see all other options considered first.
"I'd say that [bankruptcy] is one of the last options coupled with the tax increase," Principe said. "I'm fundamentally against a tax increase. I am looking at all other options first. Cutting spending, going after the retirees. I think we need to go after the big fish first."
Must Make Changes
City officials aren’t the only ones who believe changes need to be made to the pension system. Paniccia said no retired person should make more than their active counterpart. A former firefighter who wished not to be identified said he doesn’t believe current retirees should be affected, but that changes should be made moving forward.
“Why should I give up my pension,” the retiree asked. “We negotiated those contracts and we did what we had to do. I worked hard every day to earn my pension. There aren’t that many of us that are getting rich from being firefighters.”
Joseph Penza, who represents the police and fire retirees and also was the union lawyer who negotiated the five percent compounded COLAs over 20 years ago, said he believes the city will have a difficult time freezing COLAs without legislative approval.
“I know what the Mayor said, but I think when they think that through it, they might change that,” Penza said Tuesday.
Penza said he recalls when the contracts were originally being negotiated that some of the union membership was unhappy because they had to give up pay increases for two years. He said no one talked about the pension obligations down the road. He said the city shouldn’t take mistakes made by past administrations out on retirees.
“I’ve always made it clear that the issues the current Mayor is facing is not his fault,” Penza said. “Similarly it's not the retirees’ fault. So constantly pounding on the retirees and saying they’re the cause is not fair to them.”
Penza said that while McLaughlin’s pension has been widely publicized, no one has talked about how retirees making less than $30,000 will be affected if the Mayor attempts to freeze COLAs.
We’re Used to the Blame
But Taveras is adamant that the city won’t be able to overcome its financial hardship without going after the retirees. If it doesn’t, Taveras warned the city could find itself as the next Central Falls, which filed for municipal bankruptcy last summer.
“While our city workers, teachers, police officers and firefighters are foregoing raises, many of our retirees continue to collect 5 and 6 percent compounded raises every year,” he said. Taxpayers and business owners know that guaranteed yearly raises of this magnitude – or any magnitude in these economic times – make no sense. This must stop now.”
Paniccia called the Mayor’s threats unfair, but said he has become used to politicians going after unions and retirees
“It's not anything that I haven't heard before,” he said. “This is the way it always goes; they always blame us for the city's hardships. We're the only ones that have been playing by the rules.”
If you valued this article, please LIKE GoLocalProv.com on Facebook by clicking HERE.
