The Cold, Hard Truth (in Numbers)
Thursday, May 26, 2011
Leading into the comprehensive 16-page document is the title “Truth in Numbers.” The full title is then laid out as “Truth in Numbers: The Security and Sustainability of Rhode Island’s Retirement System.”
Calling the document “Truth in Numbers” was the right choice as it conveyed much more than the deceptive simplicity and directness of the phrase. Through the arrangement of the report into sections that methodically laid out the history of misguided pension system decisions and the enabling legislation which produced the current unsustainable benefit formulas, Raimondo stripped away the confusion once and for all and made the numbers the centerpiece, and therefore bullet-proof, argument for change. She delivered facts, through the numbers and formulas, which trump all the arguments for fairness that have come before, but she laid them out in a vivid and simple chronology that is accessible to the general public.
In her steady, non-dramatic, accountant-toned delivery, with the Governor, many mayors, and top brass of statewide unions looking on—the Treasurer hit all the right notes as she redirected the pension debate from rhetoric to a roadmap in what is shaping up to be a game changing political moment.
Her careful presentation of data on the accumulating costs tied to current laws governing years of service, age of retirement, and the costly added-on benefit of compounded COLA’s, represented a potent pre-emptive strike which she knew would be needed in the days to come as her report is dissected.
This is far from the first and only detailed report on the state’s troubled pension system naturally. But what makes it more significant than most that have come before is its fearless declaration that there can be no sacred cows as the process is unveiled. The report proposes the suspension of cost-of-living adjustment payments (COLA’s) even to vested and retired workers and teachers, and attaches the projected savings of $1 billion in doing so. Its’ retirement age proposal, which is presently drawing a lot of chatter, to hike it to 67, in line with the social security threshold, would chip off another roughly $700 million from the system’s costs. Changes in the accrual rate for workers closer to a 1% threshold would result in pensions more closely resembling 40% of pay as opposed to the current unsustainable 75% and 80% levels.
As for reaction, though it’s still emerging, some in the union leadership ranks seem to be settling into a tired “It’s not our fault” line of defense, coupled with “we just played by the rules and followed a system that political leaders set up”……..all of which represents a distinctly insincere posture.
It’s not an issue of blaming any one particular constituency over another at this point, but union leadership refusing to acknowledge their own significant role in helping to build the unsustainable benefit system will do neither themselves—nor this process—much good in the days going forward. The reality is the years of hardball lobbying by the unions, through both political leaders and/ or their own union agent-lawmakers, has played a role as equal to most any other in how the now unsustainable benefit system got cemented onto the books.
The Governor’s presence at the announcement was more nuanced as he attended in a second-tier role and awkwardly spoke of the “hard work ahead” and urged “everyone to work together” and even wished the Treasurer “Good Luck” at one point (?!) in his short, uneven remarks.
Speaker Fox and Senate President Paiva-Weed, who issued a joint statement of support, but did not attend the announcement, have arguably the most significant roles to play going forward and need to grasp, and quickly, that the state’s taxpayers and bankrupted communities do not see this as simply the Treasurer’s challenge. If the Governor and Legislative leadership do not move forward with her and appear to the public as not stepping up to play leading roles, they will be the ones faulted for prolonging the pension debt and possibly allowing a fiscal calamity to unfold in communities across the state.
Raimondo has done the heavy-lifting homework and laid out the considerable case for change. The spotlight should now shift to them and the entire Legislature who will soon realize that the cold, hard truth can also generate a lot of heat.
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Donna Perry is a Communications Consultant to RISC, RI Statewide Coalition www.statewidecoalition.com
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