Time for Raimondo, Chafee and Assembly to work together on local pensions
The parade seems to be forming for the 2014 Rhode Island campaign for governor. RIPR political analyst Scott MacKay explains why this may not be a good thing for our beleaguered state.
In the 24/7 world of modern politics, two years is a very long time. But in the latest debate over city and town pension systems, Democratic General Treasurer Gina Raimondo is actively trying to undermine the pension overhaul plan put forward by Governor Lincoln Chafee, an independent.
Raimondo’s allies make no secret of her intention of running for governor in two years. She’s smart, ambitious and hard-working, so this ought to come as no surprise to anyone in Rhode Island’s political constellation.
Chafee last year took the helm of a state in a deep recession with a state budget awash in red ink. One of the worst problems Chafee inherited is the financial mess faced by Rhode Island’s cities and towns.
You don’t have to be political scientist to figure out why this happened. For years, politicians traded overly generous public pensions for union support on election day. Then former governor Don Carcieri and the General Assembly cut almost $200 million in state aid to cities and towns in just two years.
Now Chafee and Raimondo are mired in a joust over how to deal with the local pension costs. Chafee is seeking immediate action to allow these cash-strapped communities to reduce cost-of-living adjustments to retirees. The governor has submitted a legislative package to help them.
Raimondo has counseled patience and has told local leaders to look to Smith Hill as a last resort. She and her staff have advised the local officials to study the issue before asking the Assembly for relief. Chiming in to support the treasurer is the Engage Rhode Island group, Rhode Island’s version of a Super PAC that violates every tenet of transparency and open government by refusing to disclose just who its wealthy donors are.
Raimondo won plaudits for spearheading state pension overhaul last year, a move Chafee supported. But now that the governor is looking to help such cash-strapped cities as Providence, Pawtucket, West Warwick, Cranston and Woonsocket, Raimondo is not reciprocating. If these communities slide into bankruptcy like a line of falling dominoes, Chafee will take the political hit, not Raimondo.
The problem with Raimondo’s course is that it does not consider the urgency of the action needed by the cities and towns. Providence is a prime example. Gary Sasse, one of Rhode Island’s top government finance experts and an adviser to the Providence City Council put it starkly last week. “The treasurer’s suggestion that legislation be a last resort is unrealistic given the financial challenges Providence is facing. The wolf is at the door; turning our backs on it and pretending it is not there is not a practical alternative.’’
The treasurer cites the lack of strong legal precedent for allowing the cities to curb cost of living adjustments. But Raimondo didn’t worry about this when she tackled the much easier task last year of making the state retirement system solvent in the long term.
The grand irony is what the cities and towns are looking for – relief from oppressive and unsustainable COLA payments – was the bedrock of what Raimondo’s plan did for the state system.
Pawtucket Mayor Don Grebien is closing fire stations. Woonsocket’s Mayor, Leo Fontaine, has proposed a big property tax hike. Providence’s Angel Taveras has raised taxes, laid off city employees and won tough concessions from unions representing city workers. Where do they turn next?
The communities get this. Thirteen town and city councils have voted to support Chafee’s initiative. How can Raimondo or any responsible politician justify waiting any longer? Isn’t it time for the treasurer and the Assembly to join forces with the governor to make the legislation work for our hard-pressed communities?
After all, the Smith Hill crowd helped create this problem. It is high time they decided to become part of the solution.
Scott MacKay’s commentary can be heard every Monday at 6:35 and 8:35. You can also follow his political analysis at our `On Politics’ blog at RIPR.org.