Will the Senate Support Chafee’s Municipal Relief Package?
Thursday, April 12, 2012
With municipalities now facing a $2.3 billion unfunded pension liability, the State Senate Thursday will begin discussing Governor Chafee’s sweeping proposal to provide relief to struggling cities and towns across the state.
The Senate Finance Committee will begin reviewing the package, which includes seven pieces of legislation that includes the ability to freeze cost-of-living-adjustments (COLAs) for retirees, would only apply to four highly distressed communities: Pawtucket, Providence, West Warwick and Woonsocket.
But Chafee’s proposal has garnered a broad base of support from municipalities throughout the state. Eleven city and town councils (Charlestown, Coventry, East Greenwich, Exeter, Jamestown, Johnston, Portsmouth, South Kingstown, Warren, West Warwick, and Westerly) has passed resolutions supporting the package, with many more expected to jump on board in the coming weeks.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“The councils that have passed these resolutions are part of a strong, growing coalition of municipal leaders throughout the state who understand that the collapse of one community has consequences for all Rhode Island communities,” Chafee said Wednesday. “They do not want to see property taxes continue to increase or have other cities go through the painful experiences of Central Falls.”
7 Bills
Aside from allowing cities and towns to freeze COLAs, the package would also:
- Offer mandate relief and binding arbitration reform for four highly distressed communities;
- Give cities and towns more control over school budgets;
- Require communities with overly generous pension benefits to bring pensions in line with the state system;
- Reduce disability pension benefits for employees that can perform other jobs;
- Advance municipal aid to avoid cash flow problems;
- Provide certain exemptions for school maintenance of effort requirements.
In Pawtucket, Mayor Don Grebien was forced to ask the state for a cash advance on tax payments to make payroll. Now he is asking the Governor to consider allowing his city to share municipal services with Central Falls and East Providence. In West Warwick, Council President Angelo Padula has already suggested the town could be the next Central Falls, which in filed for bankruptcy last August.
In the capital city, Mayor Angel Taveras is still trying to close a $20 million budget deficit in the current fiscal year. He is asking several groups of retirees to agree to concessions and is still trying to convince nonprofit institutions to make $7.1 million in payments in lieu of taxes to the city. Woonsocket's City Council last week voted to move forward with a 13.8 percent supplemental tax hike that is expected to help the city make up for a $10 million shortfall in the school department’s budget.
“Passing this municipal reform and relief legislation should therefore be a priority for every city and town in Rhode Island,” Chafee said. “I will continue to travel to town halls and city council chambers throughout the state urging municipal officials to encourage their legislators to support these bills.”
Will it Pass?
But while municipal leaders have offered their support for Chafee’s proposal, Senate President M. Teresa Paiva Weed and House Speaker Gordon Fox have been reluctant to endorse the package. The Senate has long been considered a major road block for the plan.
“Anyone who doesn’t vote for it doesn’t really understand how local government works,” Cumberland Mayor Dan McKee said last week.
Still, Chafee’s proposal has even drawn praise from some of his largest critics, another sign the package may have the broad support it needs. On Wednesday, Rhode Island Statewide Coalition executive director Harriet Lloyd called the plan “significant” and “comprehensive.”
“The package is significant because it’s comprehensive, not only addressing runaway retirement costs, but also recommends reforms to the mandate costs for active workers that are burying local communities,” Lloyd said. “The Governor’s bill identifies the major cost drivers in school and public safety budgets, which are combining with poorly funded pension plans to threaten the survival of several major cities in the state.”
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