Central Falls Paves the Way for Pension Reform
Tuesday, July 26, 2011
With many retirees solely dependent on their municipal pension for income, it could not have been easy for Flanders to urge retirees to take a 50 percent cut or risk losing much more if the city declares bankruptcy. In doing so, however, Flanders set the table for the work of Gen. Treasurer Gina Raimando and Gov. Lincoln Chafee in forging a solution to Rhode Island’s nearly $10 billion in unfunded pension liability. It also further highlights the need for the special legislative session on pension reform this Fall.
Central Falls has the dubious distinction of being the proverbial canary in the coal mine. It is arguably in the worst financial state of all the cities and towns with a $5 million deficit on a budget of only $17 million; an unfunded pension liability of more than $80 million; and few community resources upon which to draw. But, the tough medicine Flanders is faced with delivering and the real human suffering that is likely to occur for pensioners should remind us that acting now to solve our pension problem is far better than the potentially disastrous consequences that can be caused by further delay.
Central Falls' ongoing fiscal problems will continue to play out over the summer and this should fuel political momentum for a comprehensive solution to the pension problem. The mayors of Rhode Island’s three largest communities also recently sounded the alarm, driving home the point that solving the pension problem is not only critical to the fiscal health of state government, but also to the fiscal health of our cities and towns. In Providence, for example, for every five dollars in the budget, one dollar is allocated for retirees. This number will continue to rise without significant changes to our pension system with all three Mayors agreeing that the problem can only be solved if it includes at least some adjustment to what current retirees are receiving.
The Central falls retirees have turned all the abstract numbers of the pension debate into all too human reality. The stakes are high. Now, it is up to our leaders to get the job done.
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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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Comments:
anthony sionni
9:55am on Tuesday, July 26, 2011
go bankrupt !!!
Nick Patriarca
10:20am on Tuesday, July 26, 2011
i scenario and reality you do not seem to recognize , since it dors not directly adversly effect you is a truely disabled police officer injured in the line of duty , who is incapable
of obtaining additional employment . has been retired for almost two decades .
is approaching 60 , and barely making ends meet on this $ 20, 000 annual pension .
a decrease in the pension amount would result in great fiscal hardship .
a case by case basis or a respect for the truely disabled making a minimal pension should be considered .just some information from the other end of the high end pension receivers and abusers .
johnny jones
10:29am on Tuesday, July 26, 2011
Typical anti-union comment by this nitwit Horowitz. The solution is to move the Central Falls police and fire retirees into the state pension system. It's such a relatively small amount, that the state system will hardly even notice it.
Either that, or offer these police officers and firefighters their jobs back. They retired based upon what they were contractually obligated to receive-the city can not go back on that obligation.
watching providence
3:01pm on Tuesday, July 26, 2011
These retirees are getting screwed. To make matters worse, Robert Flanders retired with 100% of his salary, like all RI judges. He is not the man who should be telling anyone that they need to reduce their pension. Stop the madness with the judges first!
Max Diesel
12:00pm on Thursday, July 28, 2011
Was there a point to this piece or just a regurgitation of the obvious, something needs to be done. Really??? Who knew?