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Donna Perry: RI Becoming the Land of Last Resort

Thursday, April 05, 2012

 

The weaving car of Senate Majority Leader Dominick Ruggerio on a Barrington street last week, as well as the emerging details of the behavior exhibited by his nightlife buddy, Senator Frank Ciccone, during the arrest incident that followed, may have provoked head shaking by a cynical Rhode Island public, tongue-tied responses from other elected officials, and lively chatter on talk radio in recent days. But the meandering driving by the Senate Majority Leader serves as a perfect metaphor for the wider concern about the capability of elected leaders, especially in the General Assembly, to navigate the very troubled road the state is now on.

Only the days to come will show whether the state Legislature is finally ready to embrace the “tough decisions” so often cited in redundant Leadership talking points. If the past week’s torturous deliberations in Woonsocket can’t convince the General Assemblythat talking points need to be converted into action this session if several potentially collapsing cities and towns in the state are to be saved, one wonders if anything ever will. The truth is Woonsocket’s multi-layered woes may be just the warm-up act for the calamity that may be waiting in the wings in Providence if “municipal tools”, specifically those proposed by the Governor, can’t get past the sound bite stage in the chambers of the state Legislature. General Assembly lawmakers are no doubt being heavily swayed by a growing push back campaign against the consideration of receivership that’s presently being waged by several constituencies in the state right now.

It’s certainly true that bankruptcy is not a simple, painless, fast or even full proof remedy for the multiple fiscal problems facing several of the state’s cities and possibly towns, and should not be undertaken lightly.

Staggeringly Complex Fiscal Problems

But the cold, hard truth is cities like Woonsocket, and very likely Providence, are traveling in a circle of staggeringly complex and entrenched fiscal problems which naturally keeps landing them back in the same place every time. A report out by RIPEC this week seemed to be advocating that a General Assembly embrace of Governor Chafee’s municipal relief legislative package would get troubled communities off the circular route to nowhere and onto a more stable road of restructured local finances. The Report seemed also specifically aimed at warning against municipal bankruptcy as an answer for communities like Woonsocket and Providence. Both the RIPEC report and certain mayors and other elected officials have characterized bankruptcy as a severe “last resort” choice that should only be contemplated when all other options have been exhausted.

But when a city like Woonsocket is facing annual required contributions (ARC) to its pension plans that are extracting 60% of the entire tax levy, in addition to persistent school department deficits, it’s hard to see how anything short of a dramatic restructuring of city finances will move the city out of permanent debt. It’s an admirable recommendation to say the more palatable route is to urge state lawmakers to move forward on Chafee’s significant legislative package.

But the trouble is there’s little track record by unions to suggest they are in any way going to be a willing partner (read: more costly court battles) to any of the more aggressive reforms, but also, more to the point, little track record to indicate the overwhelming union favoring lawmakers will steer the Chafee package to passage with the clock ticking this spring.

Abused Property Taxpayers

Along these very lines, the Woonsocket City Council, facing a $10 million dollar school department deficit; already on a $90 million dollar pension debt bond; a $12 million dollar deficit bond from previous deficits; and literally running out of operating cash from pay period to pay periodstill clung to the belief that extra temporary cash will make the difference, and voted this week to approve a 13% supplemental tax hike rather than go into receivership. But the extra property tax, which is estimated to bring in only about $4.3 million, and falls to residents who are among the state’s lowest median household income earners, included the assertion by Mayor Leo Fontaine that he intends to make a package of temporary 10% pay cuts for municipal workers part of the deal or receivership is back on the table. Temporary pay cuts, which have not even been agreed to, sure must feel like small consolation to the city’s shrinking number of abused property tax payers whose bills are always permanent and ever increasing.

The tax is now dependent on General Assembly approval and there’s a lack of consensus among the city’s lawmaker delegation. Senators Marc Cote and Roger Picard seemed split on the usefulness of the supplemental tax, in the broader scope of the city’s entrenched debt, while House Rep. Jon Brien and Lisa Baldelli-Hunt indicated they needed a thorough review of both the Council’s resolution and Mayor Fontaine’s strategy going forward which seems to be a less than clear plan.

One thing is becoming clearer that gets back to the Ruggerio arrest. While Rhode Island is careening down the toughest road out there, many in the state’s ranks of elected leaders are bobbing and weaving and just plain lost.

Donna Perry is a Communications Consultant.

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