Donna Perry: Woonsocket Taxpayers are Nobody’s April Fool
Thursday, March 29, 2012
Talk of another bankruptcy is taking hold in another Rhode Island city in recent days, but this time it’s not coming from the Mayor’s office, the Governor’s office or from any officials in the state Department of Revenue. As an angry crowd of 500 Woonsocket taxpayers crowded a stormy City Council meeting Monday night demanding answers and not more tax bills, they appeared very unafraid to use the “B” word.
The mess that has been unfolding there since the appalling discovery that there was an undetected $10 million dollar school department deficit has brought the city and its taxpayers to the brink of not only bankruptcy, but possibly civic war. Taxpayers rightfully demanded to know how it could be that the now suspended school department Business Manager Stacey Busbycould get away with asserting that the school department would have a surplus in the final days of 2011, while a $10 million dollar deficit was lurking below the surface.
Their anger has been amplified by additional allegations about both Busby and former Superintendent Robert Gerardi, who city officials now believe may have been “manipulating budget data to mask costs” so as to hire or promote certain school district personnel, in an alleged scheme which has now drawn in the State Police to investigate if laws governing misuse of public funds have been violated.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTFurthermore, there are new questions over who may have unlawfully tampered with Busby’s contract, altering a provision granting her a “no termination” status, and the list goes on. It’s little wonder that against this growing scandalous backdrop, city taxpayers have dropped the gauntlet against the City Council’s planned 13% supplemental tax hike and Monday night seemed unwilling to budge, looming bankruptcy or not. Though the supplemental tax would likely bring in an additional $ 4 million to cover a good chunk of the deficit, irate taxpayers pointed out the tax seems unfair in a city wherethe median household income hovers at around $40,000 dollars a year and the number of property taxpaying residents is vastly shrinking against a rapidly expanding population of renter families whose children need to use the schools.
Meantime, as state officials warily eye the growing stand-off between officials and taxpayers in Woonsocket, they issued warnings this week that numerous other communities may be about to experience a decidedly unfunny April Fool’s Day. That’s because April 1st is the deadline for communities to turn in the results of actuarial experience studies which reviewed investment returns and expected true retiree costs, which are about to show the liability debt is worse than what’s been predicted. Last fall’s projections that the unfunded liability for the plans in 24 communities, totaling $2.1 billion for pensions and $3.5 billion for retiree health care, was actually short of what the true number is about to show.
Furthermore, state officials have warned that even unwelcome tax hikes could not even get most communities out of the pension weeds and would not produce enough revenue to make the annual payment that would be needed to prop up the faltering pension funds, which clearly means the next Woonsocket is in the wings.
One last observation concerning the approaching first of April: while the grim news has poured out of Woonsocket, a drama of a different sort has been playing out in a video message from the public employee unions in an ad campaign to promote their so called RITE Plan, Rhode Islanders for Tax Equity (RITE), which seeks to increase taxes on earners over $250,000.The problem with the video campaign is that it leaves out just a couple of vital facts. It’s accurate in that it underscores we surely havecollapsing cities and towns; desperate people; high property taxes; debt; and vulnerable citizens becoming more vulnerable with a shrinking social safety net. But the video conveniently omits a chief underlying cause of these grim realities: overly generous pension plans doled out to people in their forties and fifties who will draw on the system for 2, 3 or in some cases 4 decades matched bygold plated, low co-pay structured health plansthat are now triggering annual required contribution payments that threaten to devour half –or greater—ofthe entire revenue base of many cities and towns.
The RITE coalition is dead wrong to try and link Rhode Island’s escalating fiscal crisis with the lower tax rate that was only installed last year on those earning over $250,000.
One can only assume the union campaign was actually meant as an April Fool’s joke.
But it won’t resonate in Woonsocket where there’s no more time for jokes, and the taxpayers are tired of being played for fools.
Donna Perry is a Communications Consultant to RISC - www.statewidecoalition.com
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