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Woonsocket Faces Financial Chaos

Thursday, June 13, 2013

 

Woonsocket is facing a worsening storm of financial issues, including a severe cash crunch, a deepening deficit, and a rising unfunded pension liability—raising renewed fears that the city could be on the brink of bankruptcy, GoLocalProv has learned.

“If enough of it piles on, it could push us to the edge,” said John Ward, the city council president.

The financial hole is just too big to fill at this point, said Michael Morin, president of the city firefighter union. “I’m not convinced we’re not going to end up in bankruptcy,” Morin said.

After this week’s bond rating downgrade, the stark reality of the city’s finances has once again been thrust into the spotlight. In particular:

■ Pensions: The city will miss its annual $1 million payment into the municipal pension system. That now is scheduled to be made in August. In accounting terms, the payment will be counted for the current fiscal year but in actuarial terms it won’t, further weakening a pension system that is already less than 60 percent funded.
■ Deficits: The city is facing a $3.4 million deficit in the current fiscal year, largely due to shortfalls in the school department. Overall, the city has racked up $11.5 million in deficits since 2010.
■ Debt: Woonsocket has been at risk of missing a $4.8 million debt payment due July 15.
■ Payroll: As of this past Tuesday, the city did not have enough funds to cover the first three pay periods in the upcoming fiscal year, according to the city finance director, Thomas Bruce.

The city’s reputation in the credit market could be headed for more trouble too. “We’re bracing for another downgrade,” Bruce said. After a conference call with Moody’s Investors Service Wednesday afternoon, Bruce said that assessment had not changed.

A spokesman for Moody’s yesterday evening confirmed the city remains under review for a potential downgrade. He said the review would be completed in the next 30 to 90 days.

This week’s downgrade brought Woonsocket to a B3. The next level is C, which is where Central Falls was when it declared insolvency, Bruce noted. “C level is synonymous with bankruptcy," Bruce said.

Budget commission may have delayed the inevitable

When similar alarms were sounded one year ago, a state-run budget commission was established to fix city finances. But one year later, the city has found itself back where it started, at least in financial terms. “The financial situation of the city hasn’t improved. Period,” Bruce said.

This will be the second year in a row that the city has missed its annual pension payment. Next year, the city will not only have to make up this year’s payment, it also will have to cough up an additional $3.5 million that the budget commission has concluded is necessary to fully fund the city-run pension system.

The city is also seeking a $12 million cash advance on state education aid for the second year in a row.

Bruce said credit ratings agencies may be evaluating Woonsocket’s financial health based on what the comparable circumstances would be in another state that did not have anything like Rhode Island’s law on distressed communities, which is the legal basis for the budget commission. “I think we would be in bankruptcy already,” Bruce said.

Woonsocket running out of time

Bruce said the city needs action in three areas to avert further fiscal deterioration: the advance in state aid, an estimated $9 million in concessions from unions, and $2.5 million in a supplemental tax bill. As of this writing, none of those budget-saving measures is guaranteed.

“The rating could fall if Woonsocket is unable to secure a supplemental tax, TANs [tax anticipation notes] or a state aid advance in order to meet near-term debt service payments; if it continues to show severe liquidity strain; or if the accumulated operating deficit continues to deepen,” said Moody's spokesman David Jacobson. (On the other hand, Jacobson said a rating increase is also possible if liquidity improves, dependence on state aid advances is reduced, the deficit declines on the school side, and the city makes progress on its “large unfunded pension liability.”)

Tomorrow, the budget commission is expected to pass a resolution asking for the advance in state aid. But the move would need the formal approval of state Education Commissioner Deborah Gist. So far, no decision has been made, Gist spokesman Elliot Krieger said last night.

The city is reaching out for help from every quarter. Yesterday, for example, the city received a $2.8 million advance payment on next year’s taxes from CVS. But there’s an obvious downside: now, that’s $2.8 million in tax revenue the city won’t be getting next year. The same goes for the advance in state aid.

“It’s absolutely a boomerang effect,” Bruce said.

The city is also running out of time: both negotiations over union concessions and the supplemental tax bill remain at a standstill. The House and Senate have passed versions of the supplement tax bill, but state lawmakers are holding up final approval until the outcome of negotiations with city unions is known, according to Bruce. State Rep. Lisa Baldelli-Hunt, D-Woonsocket, said lawmakers is waiting because it wants to make sure taxpayers aren’t the only ones who are burdened.

But the unions could be using the delays on the supplemental tax bill to stall negotiations, Ward said.

“Nobody seems of a mind to make a move,” Ward said.

Morin said that local labor leaders are not purposely holding up negotiations, which have been underway since November. Instead, he said the delay is stemming from how much the city is demanding in concessions. “They’re just asking for so much,” Morin said. “It’s just so hard to reach their goal.”

Now, with just weeks left in the fiscal year, it may be too late to issue tax bills, according to Ward. “That whole concept may be off the table,” he said.

But the city has not waited for negotiations in order to enact cuts. Last month, the budget commission approved a series of unilateral changes to benefits for workers and retirees, mostly in health care, that are expected to save more than $4 million and take effect in July. Ward said the commission had been assured that the move was legally defensible.

Bruce, however, says that likely won’t stop city unions from seeking a temporary stay of the cuts in court. Morin also said he believes the city is headed for court challenges. (The firefighters and teachers, he noted, are already on the health plan that the city is forcing the other unions to adopt.)

State rep: I was misled by mayor

Baldelli-Hunt yesterday expressed anger and surprise at the state of the city’s finances.

“I’m angry. As a legislator, I feel that I’ve been misled at a time we’re trying to push through legislation to avoid municipal bankruptcy,” Baldelli-Hunt said, referring to the supplemental tax bill.

Baldelli-Hunt said that state lawmakers had questioned Woonsocket Mayor Leo Fontaine about the municipal side of the city budget and had been told there were no problems.

“There was no indication there was a problem,” Baldelli-Hunt said. “That leads me to believe they were using smoke and mirrors all along.”

Baldelli-Hunt, who is also running for mayor in this year’s election, faulted the city administration for failing to promptly share information with state lawmakers. Only within the last week did she become aware of the postponement of the annual pension payment, Baldelli-Hunt said. She added that she had unaware of other details of the city’s financial condition. (Fontaine did not respond to a request for direct comment.)

Even so, Baldelli-Hunt said she still supports the supplemental tax bill.

State officials come under fire

State officials, in turn, are starting to take some flak from local officials.

Some are questioning the effectiveness of the budget commission, which has a majority of members who are appointed by the state revenue director, Rosemary Booth Gallogly.

“While the commission has implemented positive changes, Woonsocket continues to experience budget deficits, structural imbalances, and strained liquidity,” Jacobson said. “The commission also took several months reviewing Woonsocket’s spending and accounting records, and are still implementing their recommended changes.”

Bruce said the commission has spent much of the year searching for fat to cut in a city where there is none: for every three desks in city offices, he said two are vacant. The commission has also exhaustively reviewed the municipal side of Woonsocket’s financial controls and decision-making process. But those were in already good shape, according to Bruce.

“I think if they weren’t, you wouldn’t be talking with me,” Bruce said. “I wouldn’t be here.”

Gary Sasse, a former state administration director, said the budget commission had done a “good job” and deserved credit for formulating a plan to move the city forward financially. “The problem is the process,” Sasse said. “If the process can’t come to a timely solution, then you may have to look at receivership.”

State officials have vowed to avoid receivership. But that may not necessarily be a good thing for Woonsocket.

Ward said he suspects the main reason Governor Lincoln Chafee and Gallogly don’t want bankruptcy for Woonsocket is the impact it may have on the state’s reputation and credit rating. He suggested that in staving off bankruptcy, the budget commission is helping the state but potentially hindering the city in reaching a resolution on its financial issues.

“In order to protect their corner of the world they allow the city to flounder somewhat,” Ward said. “I think they’re more interested in protecting the state … than the city.”

Asked if a second municipal bankruptcy would further tarnish the state’s reputation, Sasse said it hurts the state’s reputation more to have a city break down financially with no solution.

Neither Chafee’s office, nor Gallogly responded to requests for comment yesterday.

Bracing for bankruptcy

In some ways, Woonsocket is already bracing itself for the possibility of a bankruptcy. Bruce noted that the budget commission has adopted a five-year plan for improving city finances. That plan could easily be picked up and implemented by a state-appointed receiver, helping the city avoid the high costs that were incurred by receivers in Central Falls, Bruce noted.

The specter of bankruptcy is also weighing on the minds of the city workforce. If city firefighters and other workers concede too much, Morin said that puts them at a lower financial starting point in a bankruptcy process.

At the same time, he realizes that it’s their best interest to avoid bankruptcy. “I don’t really want to give up anything but I have to,” Morin said. “It doesn’t help firefighters to see the city fail. It doesn’t help firefighters one bit to see Woonsocket go into bankruptcy.”

Stephen Beale can be reached at [email protected]. Follow him on Twitter @bealenews

 

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Comments:

These elected officials crack me up. They all seem to stand around looking bewildered at how things could have gotten out of hand. When the eight hundred pound gorillas in the room are step increases, run away over time costs and far too many other union goodies to list.

Comment #1 by David Beagle on 2013 06 13

Much like Mayor Angel Taveras, Governor Chafee and other politicians are trying hard to delay the inevitable bankruptcy until after the 2014 election.

Sadly, the Rhode Island electorate is too blind to see such chicanery and will vote for incumbents regardless of the damage.

Comment #2 by Christopher Lee on 2013 06 13

Obviously Woonsocket's "Loan Shark" State Rep (Wanna-Be Mayor) Lisa Baldelli Hunt has not a clue of which she speaks with her stating: "I’m angry. As a legislator, I feel that I’ve been misled at a time we’re trying to push through legislation to avoid municipal bankruptcy,” Baldelli-Hunt said, referring to the supplemental tax bill.

Baldelli-Hunt said that state lawmakers had questioned Woonsocket Mayor Leo Fontaine about the municipal side of the city budget and had been told there were no problems.

“There was no indication there was a problem,” Baldelli-Hunt said. “That leads me to believe they were using smoke and mirrors all along.”

HELLO...Lisa, while you have been so involved playing politic down in Providence trying to stop Consumer Needed Legislation to prevent the Loan-Sharking business here in Rogues Island, of which your family is Big Time involved, from the continued rape and extortion of RI residents....the woes of the City of Woonsocket, caused more-so by the Financial Incompetence and Dishonesty rampart within your school system, has been reported almost daily, if not, at least, weekly in the pages of the Call, the Valley breeze and elsewhere.

Did it ever occur to you that you should become a little bit more informed before flying off the handle on this topic as it is very, very obvious that you are very ill-informed for a person that wants to be mayor and has not one iota of credentials or where-with-all to do so!

You have in Woonsocket, my dear Lisa, one of, if not, the best Finance Directors in the State, a mayor doing yeoman work above and beyond what any elected official should have to encounter....more-so, your Town Council President has the Financial Acumen in Government, 2nd to none!

YES...there is a Financial Crisis in Woonsocket....but rather then playing Politics, which is du Rigueur of Political Hacks here, both Locally and Statewide, how's about, for a change, we go after the real source of all of these problems, #1 - Our Out of Control School Systems that are costing us Ga-Zillions with no results.....and #2 - Our Public Employee Unions, namely Teachers, Firefighters and Police (All of whom are good people unto themselves) but all of whom have extorted contracts with un-affordable terms, conditions, benefits, etc., etc.

But, Oh No....we cannot do that....those are the people that elect all of the Bleeding Heart, Leftist, Liberal, Tax and Spend Democrats, that dominate our legislature, to office...such as YOURSELF!

Comment #3 by TOM LETOURNEAU on 2013 06 13

Spot on, Tom. LBH is so morally and ethically bankrupt that she would rather lie and obfuscate than accept facts. She and her corrupt buddies in the State Legislature have foisted generous and unaffordable union salary/benefit packages that are breaking the backs of cities and towns across this state. Now she's shocked and angry. No, LBH--we are angry--at your stupidity.

Comment #4 by Mike Govern on 2013 06 13

PRACTICALLY EVERY CITY IN THIS COUNTRY WHICH HAS A HEAVY ENTITLEMENT BURDEN AND HAS LESS PEOPLE PAYING TAXES FACES THE SAME FATE.

Comment #5 by LENNY BRUCE on 2013 06 13

Too funny. The city is ready to go bankrupt, but the state wants to drag it out. Just get it done with. The situation in Providence is not much different. Despite concessions from the workers and retirees and huge tax increases for the residents the city still has a deficit. And in Warwick where the mayor has consistently said we are in great shape, there is talk in his administration about asking for concessions from the retiree's. He hasn't gotten there yet, but every year the taxes go up, every department gets squeezed, and we level fund the schools. All so the tax increase can go to pay for increased costs of pensions and other post retirement benefits.

Comment #6 by Redd Ratt on 2013 06 13

This is the inevitable path of every city.Defined benefits for public unions only add stability to those few lucky workers who retire well off with guarantees. For the rest of us its a nightmare and could get much much worse. There is little chance of the changes in Providence working. This long standing corruption ridden defined benefit policy creates nearly permanent instability for the rest of us. We must end this insanity and restore stability to taxpayers and town governments. No new employee in any town in Rhode Island should be hired under defined benifit plans and guarantees.

Comment #7 by michael riley on 2013 06 13

I know many jobs in this state force you into paying union dues, but I will never understand people not fighting to stop that. The "Right-to- Work" states are striving, while union controlled states are going under. Unions may have been great way back when, but they are nothing but a bunch of low life thieves now. You may as well take part of your hard earned paychecks and flush it down the toilet. That's essentially what you are doing when you pay those vile corrupt thugs.

Comment #8 by Jenn Palumbo on 2013 06 13

Don't blame the "elected" politicions...You dopes in RI elected them! Too many people in RI are on some entitlement program, or work for a union which gives out unsustainable benefits, or fooled by promises that the government will fix this or build that...And of course, your entire state is Democrat!!!!!....You are the fools who believe the dems when they say those mean old republican are only good for rich people. Just take a look at all the broke states---they're all democrat. The more left wing they are, the more broke they are. Use your HEADS! Vote them all out!

Comment #9 by joe pregiato on 2013 06 13

Our former piece-of-shit governor Carceri started Woonsocket down this path when he drastically cut the educational aid and put the city into a deficit. Woonsocket has more than their fair share of immigrants who pay hardly any taxes put siphen off the system.

Comment #10 by Mark St. Pierre on 2013 06 13

Mr. St. Pierre,
So if that's the problem all Governor Chafee needs to do is to return the state aid. But he hasn't The state is broke and fixing it is going to take a long time. The sooner Providence, Woonsocket, E. Providence, Warwick, Cranston go bankrupt the sooner we can get a sustained path to prosperity.
And Mr. Riley is 100% correct, defined benefits need to end. They are going to end. When is the question.

Comment #11 by Redd Ratt on 2013 06 13

How does cutting aid put the city in a deficit. It sounds like he had unfunded mandate (union contracts) that he had to live by. Bad. Who sucked up to the unions? 9 times out of ten, it's a dem trying to by votes.

Comment #12 by joe pregiato on 2013 06 13

bankruptcy is inevitable ...woonsocket, pawtucket, providence, west warwick,

all the cites that vote democrat master lever.

its just a matter of time.

things are ina free fall and most everyone is in denial.

fontaine has been handed a mess aand is doing the best with what he has but i say the state should not bail them out.

too bad woonsocket taxpayers and residents... you voted the party line all these years, now you alone pay the price.

Comment #13 by jon paycheck on 2013 06 13

Woonsocket is already bankrupt.

Comment #14 by Jim D on 2013 06 13

Problem is that everyone who is complaining here, is now out-numbered by non-taxpaying entitlement suckers and union members. We need the press to stop being the butt kissing libs that they are and tell people the truth: We are on an unsustainable path. And stop denograting a republican when he or she says "we can't afford it"

Comment #15 by joe pregiato on 2013 06 13

It might make people feel better to drive down public employees’ benefits and wages, but it won’t change the unemployment rate, increase wages or lower taxes. As a matter of fact, when you drive down union wages it has the opposite effect.
Real wages and benefits have been falling for years. After adjusting for inflation the minimum wage is lower than it was in 1968. Why?
Defined-benefit pension plans for federal, state and municipal workers - and many private employers - have been around since the ‘50s. Why are they no longer “sustainable?”
We are a much wealthier nation than we were 60 years ago. Why is it that for years even minimum wage jobs offered free medical benefits, including family plans? Why is it that ordinary working people were once able to buy a house and college-educate their children without crushing student loans or lifelong debt? Why are automobile loan payments being extended to 72 and 84 months.? Why are people no longer able to afford 36 month car loans?
To attribute what is going on in American society to “greedy unions,” “welfare cheats” or “illegal aliens” is the height of folly and know-nothingness. I guess it is easier to blame others than to think critically, something we’re not taught.
Do you honestly think there is no solution to the lack of livable wages, the national unemployment rate, childhood poverty, the one-sixth of American families on food stamps or the millions that lack even basic health care?
Keep beating up on the guy next to you and see where it gets you.

Comment #16 by Johnny cakes on 2013 06 13

Johnny (let'm eat) Cakes. You asked a lot of questions. I'll answer a few. But really, you are spewing the UNION line. Of Course you are gonna say that; that's all you know. 1) Limiting Union Benies won't help? Really. So if we did not have to pay for benefits, retirement and health care and you yourself had to pay them like everyone else, THAT won't lower taxes? And if we could lower the cost of each government employee; whether a fireman, teacher, policeman, we would not be able to afford more of them? Come on Johnny. 2) Why is it not sustainable? If you look at the contracts that some of these public unions have, just do the math. We cannot continue on a path in which Union benefits are growing at a higher rate than inflation (way higher) If you can't do simple math, then there is no use arguing with you. 3)We are a much richer nation now than yrs ago? You are not rich if you have a $150,000 on a credit card.

Comment #17 by joe pregiato on 2013 06 13

So from what Im hearing most people on here like the state dont like Woonsocket. Well you know what the state can piss off for all i care

Comment #18 by robert lamarre jr on 2013 06 13

Johnny Cakes, The federal government and private business' have gotten out of defined benefit pensions. The states and muni's will be forced to as well. One way or the other.

Comment #19 by Redd Ratt on 2013 06 13

Cut entitlement programs, get rid of the bottom feeders and get rid of any or all non productive municipal employees.

Last but not least, give the illegals the heave ho.

Fiscal problems solved.

The problem we face is not how to save us from financial ruin the problem is finding the politicians who have the fortitude and character to carry out the will of the people who elected them.

Comment #20 by Robert Anthony on 2013 06 13

after they file bankruptcy, is the supplemental tax refunded?

Comment #21 by Odd Job on 2013 06 14

Woonsocket is in line with a number of municipalities in this state that are dying a slow death. It has fallen victim to a lousy economy, poor fiscal management and perhaps they did not really learn the lessons of the banking crisis of 1991.

When the old Marquette Credit Union failed, it was like a major switch had been turned off in this city - everything suddenly ground to a halt. It was like an instant nightmare - people were cutoff from their money and businesses began to fail. The government continued to grind along the best it could but there was no real economic relief to come from there - they were still about twenty years behind the eight-ball. Many people were hurt from that banking crisis and perhaps this city had not fully recovered before this economic crisis fell on them.

Woonsocket has never really transitioned from the old mill town it was to the future. There is no real economic engine driving this city. They are lucky to have CVS in their borders to help with their revenue stream but, for the most part, it is strictly residential tax base that is keeping this government going. They have a serious problem with their school system regarding their budget and over spending which continues to generate red ink, and the local leaders appear unable to control it. They continue to use gimmicks to “get by”. They had an issue a couple of years ago with their operating budget and decided to float a bond to fund their operating budget. This was a five-year bond to cover the expense of one year! What were they thinking? Now they have the debt service on that expensive bond to pay for while they are still working to make ends meet with their future budgets. This is a form of “credit card management”, which is what is going on in many municipalities which is getting them into serious trouble. Compound that with not keeping their pension payments on schedule for their retirees and dealing with expensive labor contracts with their municipal employees, it appears this city is on the road to ruin. A few other municipalities are facing the same issues as Woonsocket but not as acute.

While they called in the troops from the Budget Commission to help stabilize the situation, they may have already gone over the cliff. This is the city with the “food stamp” or “boom-bust” economy blows a little life into the city, it is in dire shape. This commission will no doubt, recommend higher property taxes, major cutbacks in city services to help bring costs into line. They should recommend that the pension plan be taken over by the General Treasurer’s office for administration in fairness to their retirees, and the elected leaders need to come together to get some kind of economic package going to attract business back into the city to generate jobs. It has been twenty-two years since the banking crisis and Woonsocket has still not moved - what have the elected leaders been doing? What are the voters thinking?

Comment #22 by Gov- stench on 2013 06 14

Mike Riley

The "rest of us" -do you mean your Hedge Fund buddies in their multi-
million houses on Ocean Rd.?

It'll become clear in a short time how Raimondo's 26% of pension assets and Taveras' 20% will be the relevant definition of "corruption ridden".

Riley,stay off the sauce before commenting.

Comment #23 by mark malachi on 2013 06 14

Mark--keep your class warfare, emotion-based drivel to yourself, please. You too can succeed if you try--too many find it easier to whine and complain and vote yourself someone elses gains....

Comment #24 by Mike Govern on 2013 06 14

I guess the truth hurts, but it is what it is, face up to it !

Comment #25 by Mark St. Pierre on 2013 06 14

Red Ratt
“The federal government and private business' have gotten out of defined benefit pensions. The states and muni's will be forced to as well.”

You’re right! But the question remains, why? What is the motivation for privatizing pensions and subjecting our retirement savings to the Wall Street casino - and that’s what it is? They are doing this for the same reasons they are privatizing schools. There is money to be made in “educating” our children and taking a piece of your retirement savings. They not only want a “taste” of your IRA/401K in management fees, they want to shape the next generation to accept this dog-eat-dog-Race-to-the-Top way of organizing society. They want to indoctrinate the youth with their sick me-first-winner-take-all view of the world.
What kind of pension system is it that subjects our savings to market forces, where overwhelmingly trades are done by manipulating prices by buying and selling shares using computer algorithms.
They’re gambling with our retirement funds, not investing. If they lose they make money; if they win they make money. Is this what you want for you, your kids and grandkids?
We are taught that this is not only the way things are but the way things should be. They are urinating on us and telling us it’s raining.

Comment #26 by Johnny cakes on 2013 06 14

Johnny Cakes no one is or should ever entitled to a guaranteed retirement. Not you, not me and not my local town janitor or teacher or public works employee. Thats point one. Point two manage the money your self.You dont have to send it anywhere if you dont want to. You obviously dont believe in capitalism and don't "TRUST" Wall Street so invest in your neighbors business or farm for all i care. Just don't ask me to guarantee your retirement. I don't ask you to guarantee mine.I have no problem with public employees taking a match from the town or State and managing it themselves. I dont want to manage it. Its their retirement and some people like more risk than others. Its their choice and most importantly their responsibility. Unless you think taxpayers should pay for this elite class of worker known as the "public employee" . I simply don t see why taxpayers should guarantee their retirement. Neither did FDR, by the way.

Comment #27 by michael riley on 2013 06 14

Johnny Cakes is an example of what happens in the 'entitlement' society. He actually thinks he is entitled to a guaranteed retirement. Manage it yourself like the rest of us! Put it under your mattress. No one is forcing you to put in in Wall St----unless of course your UNION is forcing you?!....BTW, In NY, under their current contract, teachers are guarenteed not to lose money in the stock market; If their pension fund loses money in a calendar yr, the TAXPAYERS have to make up the difference! That means that the Teachers Pension Fund's manager may as well take MORE risk. Why not? If they win, the teachers win big. If they lose, we taxpayers make up the difference. Now, Johnny, tell the truth, you think that's a great idea!

Comment #28 by joe pregiato on 2013 06 14

Joe and Michael,
I understand your thinking, it’s the law of the jungle and a survival of the fittest. In your mind people must be little more than animals. I don’t think you realize how your view of the world dehumanizes you and others.
Why did human beings form societies to begin with, so everyone could fend for themselves?
Society has no obligation to anyone in their old age, if they become disabled or are born with a disability? Society has no obligation toward children, either?
Human beings don’t have a right to work and contribute, receive a wage that’s livable, receive health care and be taken care of when they are no longer able to physically contribute toward building and developing society. I assume you are not in favor of Social Security or Medicare, either, because these are guarantees of subsistence, health care and some dignity after a lifetime of work.
For you it is all against all in a competitive and desperate struggle for survival; and the only nexus between people is cold hard cash.
This is the world of clinical sociopaths, and you have a lot of company in the highest echelons of society.

Comment #29 by Johnny cakes on 2013 06 14

Johnny, pensions are invested in wall street. What do you think they put the money in the mattress.

Comment #30 by Redd Ratt on 2013 06 14

Do the people commenting not realize that government "defined benefit" pensions are funded by the defined,mandatory contribution of the employee,not the employer.

Govt.employees are forced to contribute 8% to 12% of their salaries to a fund and have vittually no say as to how that money is invested.

The danger-its personification is Raimondo.com

Comment #31 by mark malachi on 2013 06 15

Mike Govern,class warfare-really?
No ,just calling out someone who is one of the many hedge fund managers who wants access to even more of the employees' money than they have already.

Comment #32 by mark malachi on 2013 06 15

Mark Malachi lacks understanding of Defined benefit programs and how they are paid for. Lets put that aside for a moment.I would like to address the concerns of Johnny cakes whoever that is.Its always interesting when the self described "tolerant" progressives stand up and defend an elite class. They defend 10% of the population , those who work for the municipalities and state, and say they are above the rest of us . They "deserve" guarantees. They deserve free or cheap high end health insurance.They deserve a $1.2 million dollar annuity at retirement when the rest of us have a median retirement account of roughly $50,000. they deserve to have taxpayers guarantee that annuity regardless of the performance of the assets set aside to fund those retirements. If the market goes down 50% they still get that $1.2 million. Does that seem fair to you? What is so special about a public employee that they should have these guarantees? This DEFINED BENEFIT system is destroying town after town and the State of Rhode island. Why ? Why do we continue? Because the system is a money pot for corruption. Politicians have been known to sell these jobs to willing buyers, because of the benefits. They give these lucrative deals to those who have helped them get elected. We can reduce corruption,stabilize finances and get back on the right track of building infrastructure and providing community services to needy residents by simply doing what is right and what is fair.
To me "Fairness is no member of congress should have a special health care program paid by us".Fairness dictates that town employees ,who are paid by us ,are not designated elite and shouldn't receive guarantees from us. They should not have million dollar retirements paid by us. But they do. Many towns have finance directors creating these budgets and then not funding properly the retirements and ironically those directors don't even live in the community that guarantees the retirements. The system is a mess that benefits only 2 groups . Politicians and public employees. Its time for taxpayers to wake up and realize that public workers are no better and no more elite than the average citizen.

Comment #33 by michael riley on 2013 06 17




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