Rob Horowitz: Pension Reform Poised for Adoption
Tuesday, October 25, 2011
The comprehensive plan proposed last week by Gen. Treasurer Gina Raimondo (D) and Gov. Lincoln Chafee (I) to fix our state’s pension mess more than meets the high expectations raised by the long, but necessary, process of public education and hard-headed insider bargaining. The sweeping proposal matches the scale of the problem and the political moment.
Taken together, the components of the proposed measure would nearly halve our $7.3 billion of unfunded state pension liability as well as significantly cut annual outlays for pensions in the state budget. The major provisions call for suspending cost-of-living adjustments until the pension fund is 80 percent funded; converting to a hybrid pension with a 401k component; raising the retirement age to the one set by the Social Security Administration; and some refinancing of debt to extend the payments over time.
Raimondo and Chafee have won the buy-in of the legislative leadership. Both House Speaker Gordon Fox (D) and Senate President Paiva Weed (D) are actively supporting this landmark legislation—a development that bodes well for passage.
The public employee unions are predictably vowing to try to stop it in the General Assembly and/or challenge it in Court. While these unions still have influence, particularly in the State Senate, they have a big, uphill fight ahead. Their emphasis on a down-the-road court challenge, rather than an immediate aggressive legislative lobbying campaign as their main line of defense, shows just how aware they are of this fact.
An aggressive, persistent and persuasive public education campaign by Raimondo, coupled with high-profile examples of the crushing pension debt faced by cities and towns, has created a favorable political environment for the adoption of this sweeping legislation. Raimondo, in particular, is to be commended for setting the right tone to move the proposal forward by refusing to engage in the usual finger-pointing and blaming. Throughout this process, she has stayed focused on defining the substantive fiscal problem created by rapidly rising pension costs and on constructive and pragmatic solutions.
Rhode Island is poised to demonstrate unique constructive leadership on this critical issue--which will greatly move our state forward and provide a model of bold and sustainable reform for the rest of the nation. The General Assembly must now do the right thing and pass comprehensive pension reform.
Rob Horowitz is a strategic and communications consultant who provides general consulting, public relations, direct mail services and polling for national and state issue organizations, various non-profits and elected officials and candidates. He is an Adjunct Professor of Political Science at the University of Rhode Island
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