Block Battles with Fung Over His Claims About Pension/401k Savings in Cranston

Monday, September 01, 2014


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Critics are questioning claims by Cranston Mayor and gubernatorial candidate Allan Fung that the city's changes to 401K pension are contributing to substantial savings. 

Fung has touted major financial overhauls in Cranston, citing that he "cut spending, balanced budgets, rolled up his sleeves and reformed pensions, saving millions...all of that means smaller government and bigger economy," in a TV ad. 

"The Mayor decided to get people out of the old city plans and into 401Ks. My understanding is that it's only new hires -- if which the city's only had about 4 or 5 since then," said City Councilman Paul Archetto.  "I've heard now that a number of unions have negotiated that as part of a collective bargaining unit.  So even if we have 25 folks now in the new system, I think the Mayor is over-exaggerating the savings associated with this currently."

Savings, Semantics

Fung has said the millions in savings associated with negotiated pension reform that he ushered through Cranston in 2013 are a result of freezing -- and capping -- cost-of-living-adjustments to the city's fire and police retirees. 

"Mayor Fung has brought more than 1,000 new private sector jobs to Cranston during his administration, achieved pension reform saving over six million dollars in this budget year alone, has consolidated services, reduced personnel, and has moved new employees in two major unions into 401(k) style retirement plans.  These reforms have helped to balance budgets without a tax increase for three straight years," said the Fung campaign in a release in July. 

Dan Yorke, who hosts "Dan Yorke State of Mind" on WPRI-12 and "The Dan Yorke Show on WPRO-630," said that guests and callers have broached the issue of the impact of the switch to 401Ks on his programs.

"Allan has recently talked about 401Ks -- and I've wondered out loud why it hasn't been a more instrumental piece of his campaign," said Yorke.

The Fung administration and campaign team has said that while there have been cost savings to date, the major savings are expected in the future. 

"There’s approximately 21 people from both the Teamsters Union and Laborers Union, and possibly a few more in the process of joining," said Carlos Lopez in the Mayor's Office.

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As for how much has been saved to date, Lopez said the following. 

"Approximately $37,000 so far in FY ’13-‘14 where the city only contributes 3% towards the 401a plan & the employee contributes their share vs. traditional pension plans where city pays approximately 11% and is more costly to taxpayers," said Lopez. 

"All new employees who are hired under these contracts will participate in the 401(k) style retirement plans rather than the more expensive traditional pension plan. As a result, the savings will continue to grow in coming years," added Fung campaign spokesperson Robert Coupe.  "Also, Cranston was a leader in this movement to defined contribution retirement plans under Mayor Fung."

Block Questions Impact

Gubernatorial opponent Ken Block, however, said he took issue with the way that the 401k savings were portrayed in Fung's messaging.

"This is Fung, insider politician, using smoke and mirrors to look like a reformer.  If these numbers are true, whether it's the four city employees the Councilman thought was now having 401Ks, or it's the 25 or so the City is now saying, they couldn't have possibly saved the city millions," said Block spokesperson Jeff Britt.  "This is one of many times that the Fung campaign has stated something that isn't actually true.  That's what inside politicians do." 

Britt pointed to a recent mailer by Fung addressing the 401ks. "He didn't require employees as he said in his mailer to move into 401Ks.  Only 21 people have moved for less than $50K," said Britt.  "He's caught telling half truths, if not full-out lies.  It's like how he talks about not raising taxes Cranston -- but ignores his first three years in office."


Related Slideshow: 10 Questions Fung Has to Answer When Running for Gov of RI

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10) Can Fung raise the money necessary to be competitive?

At the last reporting period, Cranston Mayor Allan Fung's campaign had only $336,000.


Ken Block had $540,000 and he just entered the race.  


Democrat Gina Raimondo has over $2.3 million and even Angel Taveras has $759,000 cash on hand.

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9) Is Fung ready for prime time?

Fung is well-liked in Cranston and most everyone thinks Fung is a "nice guy."


Gina Raimondo and Angel Taveras can claim they took on tough issues.


Ken Block articulates big ideas and a proven record in business, but out of the gate Fung's campaign seems less than ready.


Fung's campaign manager got confused about how many Democrats Fung has  donated to and his motivation for donating to them. 


Would another four years in Cranston be the wiser path?

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8) Can Fung effectively run against Angel Taveras?

Fung claims Providence Mayor Angel Taveras as a close friend, but it raises questions about inherent personal conflicts and ability to run and effective race.


Politics in Rhode Island is often a blood sport, will Fung approve that knockout punch TV spot in the closing weeks that tags Taveras for the spiraling crime problem in Providence?

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7) Is Fung's base big enough?

For Mayor Fung, his base is Cranston, but he does not enjoy a groundswell of Hispanic voters like Providence Mayor Angel Taveras hopes to bank on (7% of the voters were Hispanic in the General Election in 2012, according to Pew Research).


A race against Raimondo would be tough as she would very likely have a strong block of female voters.


Where does Fung get his votes?

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6) Can Fung defend the tax increases in Cranston?

When Fung runs as a Republican against a Democrat, there is an advantage if Fung can point out a differentiation of fiscal discipline. Fung, as Mayor, had numerous and significant residential and commercial tax increases.


This will not help him against the fiscally prudent Ken Block, but even if he were to win the primary then he would lose the advantage against Angel Taveras in a General Election. Both have ushered large tax increases through their councils.

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5) Why pledge to create "20,000 jobs"? It sounds like Don Carcieri.

Don't know if Fung was paying attention, but GOP Governor Don Carcieri ran on...creating 20,000 new jobs. 


When Carcieri left office, Rhode Island had the worst unemployment in America. Not sure Fung wants to mirror that Carcieri pledge.

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4) Defending Don Carcieri and making him a part of the campaign - is that a good idea?

The collapse of 38 Studios has scarred Don Carcieri's legacy as Governor of Rhode Island. At best, Carcieri was star struck to give a baseball player $75 million -- at worse, Carcieri was part of something far more ominous.


For Fung, who wants to run as the future of Rhode Island, why be associated with Don Carcieri?

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3) Defending the lobbyist role?

In 2014, do we think Rhode Islanders will be looking for a former lobbyist for a large corporation that is cutting Rhode Islander's jobs to be our next Governor?


Lobbyist-turned-Governor will be tougher to pull off than actor Ronald Reagan-turned-Governor of California in the 1960's.

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2) Understand the changing position on gay marriage?

Hard to know what Allan Fung's position is on gay marriage. At different times he offered a range of views.


Some GOP primary voters have been opposed to the RI law and others were supportive, but neither segment of the GOP may understand what his position was -- or is.  

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1) Political donations to local, federal and national Democrats - are you sure you are a Republican?

Fung has given to David Cicilline, US Senate Majority Leader Harry Reid of Nevada, former RI Senate President Bill Irons and once RI Attorney General Patrick Lynch. Fung's campaign manager claims he was a lobbyist and needed to donate to Democratic leaders.  Cicilline, Reid and Lynch meet none of those criteria.  


Not only did Fung give thousands of his own dollars to Dems, he turned down requests from leading GOP candidates like John Robitalle and Jon Loughlin who were badly outspent and needed every dollar to win.


The Republican party in Rhode Island is a pretty small group trying to create a pretty big tent - from Scott Avedisian to Doreen Costa. For most Republicans in this state it is tough -- you don't enjoy the political connections and you're part of a tiny minority -- so loyalty matters.


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