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Curmudgeon's Corner: Raimondo’s pension board is nothing but a farce

August 2, 2011

Kabuki is a theatrical art form popular in Japan in which dances are performed in a formal, stylized manner. In other words, everyone knows what the next move will be.
Kabuki could also be used to describe Rhode Island General Treasurer Gina Raimondo’s Pension Advisory Board.
This body includes one mayor, one business executive, four labor leaders, five consultant/educators and Governor Chafee’s director of administration.
So, you might as well say there are at least five advocates for public employees in the group.
The PAB is to meet in public places four times over the summer and come up with recommendations to Mrs. Raimondo on how to fix the state’s pension systems which have an unfunded liability of about nine and a half billion dollars (excluding health care benefits for retirees).
Mrs. Raimondo says she and Governor Chafee, who owes his election on a plurality vote in no small measure to state employee unions—particularly teachers—will come up with a program to fix the current, unsustainable pension system to present to the special session of the legislature.
First of all, does anyone really believe the four union bosses on the PAB are going to endorse any meaningful reform of the pension system? Or, for that matter, will Director of Administration Richard Licht? My bet is they will file some sort of minority report in opposition to any recommendations the rest of the group may agree on.
Next, in a legislature dominated by teachers, both active and retired, public safety employees, union executives and other members heavily dependent on union contributions and lobbied heavily by union bosses, does anyone think any reasonable reforms will be approved by both the House and the Senate?
Finally, in the unlikely event that the governor were to sign a major reform of the state and municipal pension system, how likely is it that the unions will take the matter all the way up to the Supreme Court if necessary to block any new law?
To answer that question all you have to do is look at the fact that at the very time the PAB was meeting, Lynette Labinger, an attorney for the public employee unions, was arguing before Judge Sarah Taft-Carter against the modest changes enacted in 2009 and 2010 (when much-despised-by-the-unions Donald Carcieri was governor) that were designed to save taxpayers a paltry $59.6 million during this fiscal year.
These changes included increasing the number of years one needed to qualify for a pension; limiting cost of living adjustments; and reducing pension amounts slightly.
Ms. Labinger repeated the union argument that pensions are a property right protected by their contracts as implied in Supreme Court decisions.
Lawyer John Tarantino, representing the state, answered that case law holds there is no property right and, if there were, it would mean that the legislature could never alter a pension system that is governed by state law.
Judge Taft-Carter said she would issue her ruling in September. You can bet whichever way she rules the losing party will appeal to the Supreme Court.
Meanwhile, over at the Warwick Public Library, the pension advisory board and Treasurer Raimondo were listening to an actuarial consultant and discussing how much state employees should get after they retire.
Not surprisingly, board member Alicia H. Mitchell who worked in the Clinton Administration was concerned for employees who are not in the habit of putting money into savings and believes that public pension plans need to take this into account. Count her in the union camp, too.
Cranston Mayor Fung wondered about the role of personal responsibility in planning for retirement. Treasurer Raimondo seemed sympathetic to Ms. Mitchell’s concern.
An actuarial consultant narrowed the panel’s options to four: injecting more taxpayer dollars, hoping that investment returns will be better, amortizing the debt and cutting pension benefits.
My bet is the union advocates on the panel favor any of the first three or a combination thereof and will oppose the fourth at all costs.
I have another theatrical term with which to describe the pension advisory board: farce.

* In Central Falls, which some are calling the “canary in the coal mine”, former judge Robert Flanders was asking he city’s retirees to consider taking up to a 50% reduction in their pensions to help save the struggling, tiny municipality from bankruptcy.
Central Falls’ pension plan is not part of the state retirement system. Currently, public safety workers can retire on half pay after 20 years of service regardless of age. The city’s plan, managed by an insurance company, covers 141 police officers and firefighters under two contracts. Compounding the problem is the fact that 37% of the retirees collect two-thirds of their pay tax free under a disability pension.
One of them, former police sergeant Michael Long who went out on a disability pension for a neck injury and is now a practicing attorney, wanted to know, “Where is the fairness?”
How about if we start by adjusting your disability pension by the amount you make as a lawyer?
Or what about Central Falls’ current chief of police, Joseph P. Moran III, who collects a $50,678 per year pension while receiving a salary of $72,000 under a five year contract? Chief Moran says he applied for his pension to protect $35,000 in unused sick time.
In an op-ed in last Sunday’s Providence Journal, retired Cranston police captain Robert E. Barber says he is considering filing an individual lawsuit if any changes are made to his “contract”. Barber retired after 27 years on the job at age 50. He didn’t say how much his pension benefits are but he does mention that he is “a taxpayer”.
No, Captain Barber, you are not a taxpayer. You were and are a tax-taker because throughout your career, and now in your eight years of retirement, you have taken out of the tax system far more than you have paid in.
An acquaintance who retired after 26 years as a Providence cop told me there is a saying down at the FOP Hall: “I took care of you for twenty, now you take care of me for forty.”
Problem is, the taxpayers can no longer afford to do so.

Richard August is a North Kingstown resident and a regular contributor to the Standard Times. His opinions are his own. He can be reached at richardjaugust@yahoo.com.

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