Pension Fairytale is Ending
Thursday, April 28, 2011
“We can choose to do nothing, and the consequences will be truly devastating.”
On the very same night Treasurer Gina Raimondo was delivering that weighty warning about the condition of the state’s pension system to several hundred people at a forum held at URI, a different—but not disconnected—public meeting was occurring in Cranston before the city School Committee.
While Treasurer Raimondo and former Auditor General Ernest Almonte, who were joined by Cranston Mayor Allan Fung, were telling those at the forum this past Monday night that the state’s true unfunded liability for pensions and health care for all teachers, police, firefighters and municipal workers combined is now pegged at a staggering $13 billion—the proceedings at the Cranston School Committee vividly exemplify how communities like Cranston have reached their own pension debt mess in the first place.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTUnions block reforms
The issue on the table at the School Committee was a far from dramatic proposal to privatize the school bus service in hopes of cutting the costs of operation and contracts for the 110 unionized personnel. The private vendor being eyed to take over the bus operations, First Student, is promising to achieve savings for Cranston of up to $3 million in the first three years if approved.
But the School Committee first had to cope with the crowd of existing unionized drivers, members of the Laborers International union, who showed up to oppose the privatization proposal wearing “Save Cranston School Bus Drivers” stickers. ( I guess the T-shirts weren’t ready in time for the meeting.) The committee also had to cope with the spectacle of having their own Committee Chairwoman, Andrea Iannazzi, sidestep her duties of presiding over the meeting, saying she would not participate in any discussions on privatization. (Ms. Iannazzi is the daughter of the union fixture Don Iannazzi, longtime Business Manager for the Providence affiliate of the Laborers, and sister of newly famous Stephen Iannazzi, the 25-year old whose family ties have landed him with a special Senate aide position paying over $88,000 a year for unclear duties, which is certainly an impressive career advancement for a high school graduate). The Iannazzi union empire aside, the bus driver union opposes the city’s timid attempt to begin to rein in bloated personnel costs.
Mayor Fung has been out front in recent months in urging state legislative leadership to craft pension reform measures to help him and other mayors pare down personnel retirement obligations which threaten to devour Cranston if not reduced. Cranston taxpayers are presently on the hook for a quarter of a billion dollars in pension obligations ($245 million) and another $50 million in promised health benefits for police and fire retirees and their beneficiaries. Despite the magnitude of that debt, the resistance shown to even the mildest proposed reductions to union personnel ranks like the bus drivers , is a vivid reminder of just what individual communities are up against in trying to rein in the public payroll.
A similar scenario was playing a few communities over in Warwick also on Monday night as the City Council reviewed and gave first passage to a reform package that would raise retirement ages and years of service required for a pension. There were fewer fireworks Monday night, but an earlier Council session on the reforms brought out the standing room only Council 94 AFSCME union workers in slogan T-shirts as the predictable opposition was mounted. (The reforms in Warwick, which would only affect new hires, are hardly revolutionary in requiring police and firefighters to reach age 50 before retirement and municipal workers, age 59.)
'A fondness for fiction problem'
Almonte, and Raimondo especially, should be applauded for taking a factual, unafraid, and very public approach in speaking out about the magnitude of the problem and making it clear that pension benefits—very possibly those already in the pipeline—may have to be altered because of the size of the gap, among the worst in the nation, between what was negotiated and what was set aside.
Rhode Island doesn’t just have a math problem as the Treasurer has so succinctly stated. Rhode Island has a fondness for fiction problem, as its public sector workforce, especially in the leadership ranks, is clinging to a reality that doesn’t exist. Raimondo has emerged as one of the few voices of leadership statewide and an ally for the Allan Fung’s and other city and town leaders who can expect to face bigger and louder city council and school committee crowds.
As the pension promises fairytale unravels into an ugly finger-pointing reality in the months to come, municipal leaders are going to need all the friends they can find.
If you valued this article, please LIKE GoLocalProv.com on Facebook by clicking HERE.
Donna Perry is a Communications Consultant to the RI Statewide Coalition (www.statewidecoalition.com)
