Skip to main content

Politics as Usual: Raimondo spoke too soon regarding pension reform

June 15, 2011

General Treasurer Gina Raimondo would be well advised not to put too much work into her pension reform plan before a judge rules in the case now before the Superior Court about whether employees who are vested in the pension system have a property right in their promised pension benefits.
I realize the prevailing passion is to say “screw those state employees and their unions, what part of ‘there is no money’ don’t they understand?’
And that is a fine stance for someone to make a political point or a talk-show rant. But the law is the law and a judge is going to have to go by the law.
Supreme Court rulings at the federal and state levels going way back dictate that the words used in statute must be given their plain and ordinary meaning.
When I looked up the word “vested” in the Merriam-Webster dictionary, the definition was “fully and unconditionally guaranteed as a legal right, benefit, or privilege” and the example it gave was “the vested benefits of the pension plan.” (It also means “having a vest” as in “a vested suit”, but I’m pretty sure that is not what the word means in the pension statute.)
So it is difficult to see how a judge could twist the language to say that a vested pension is not a property right. But, then again, our Supreme Court ruled that the word “casino” means the same thing as ”lottery”, so I guess the naysayers have at least a fighting chance.
I keep seeing in editorials and hearing on talk radio about whether the “promise” of pension benefits can or even should be kept, given present financial realities. This construction attempts to paint the pension guarantees as something as evanescent and illusory as a politician’s campaign promise. It is not.
Pension law is not some pie-in-the-sky promise. It is a deal. It is a two-way street. Yes, the deal is contained in statute, not a labor contract, but it has the force and effect of a contract between the state and its employees once that employee becomes vested.
The state gave employees and teachers no choice but to kick in nearly 10 percent of their salary every single pay period in exchange for them receiving specified benefits at the time of their retirement. The requirement that the employees make their contributions was enforced, so how can the payment of their benefits down the line not be?
This is not a gratuitous political promise of free goodies for retirees; it is a quid pro quo. Those benefits are not being “given,” they have been paid for, at the full price the state demanded.
To deny or even reduce those benefits now for people who have been paying for at least 10 years (the time it takes to become vested) would not be a broken promise, it would be outright thievery. It would be taking a substantial amount of people’s money, then not giving them what they paid for.
Despite whatever advice Raimondo ultimately gives, it is unlikely that the courts are going to allow the General Assembly to unilaterally strip pension rights from vested employees. If there really is no option but to reduce pension benefits and COLAs, then those reductions are going to have to be negotiated with employees, most likely through their unions, even though, at the risk of repeating myself, those benefits were not negotiated as part of union contracts.
If Raimondo or Governor Chafee or the General Assembly are going to try to negotiate something like that, on the basis of “the money is not going to be there, so if you don’t want us to declare bankruptcy and void the pension plan, let’s work something out now,” the time to start that was several months ago.
Nobody thinks it is a good idea to simply refinance the pension debt—that would be “kicking the can down the road,” a tactic that is highly unpopular these days—but that, and raising taxes to pay the refinanced pension bond, is quite possibly what a judge (don’t forget, judges get state pensions, too) is going to force the state to do if an agreement cannot be hashed out with the workers.

n Even I think it’s way too early for such talk, but Channel 12’s web guru, Ted Nesi, had an interesting blog post about a week or so ago. While the rest of the political world was focusing on the potential Republican primary in the 1st Congressional District race between last year’s candidate John Loughlin and the new guy on the block, former State Police Superintendent Brendan Doherty, Nesi tracked down the Democrats who ran last time around—William Lynch, David Segal and Anthony Gemma – but lost to David Cicilline, who ultimately won the seat, and he found that all three are at least thinking about another run.
That would be interesting. There is no question that Cicilline is going to be vulnerable next time around, and this is a seat Democrats don’t want to lose. Remember that Cicilline kept the seat for the Democrats in a year of a GOP tidal wave after Patrick Kennedy chose not to run.
Democrats don’t want the opposite happening next year, when, with President Barack Obama on the ballot, they should have a good year in Rhode Island.
Cicilline is damaged, and my guess is he is going to become more so as we see more of the fallout from Providence’s financial meltdown. As cops and firefighters start getting laid off, more and more people are going to blame the bad effects on Cicilline, even if his successor, Mayor Angel Tavares refuses to do so. (Cicilline owes Tavares a big one for that; he was still blaming Buddy Cianci for stuff six or eight years into his term.)
Anyway, a replay of the 2010 Democratic primary (assuming no other Democrat takes a shot, which is nowhere near a foregone conclusion) could become interesting if Democrats start worrying that Cicilline could lose the seat to a Republican who gave him a run for his money last time or a new GOP hopeful who has integrity, rectitude and good will to burn. If Democratic primary voters decide they are looking for a new horse to ride into 2012, that bodes well for Bill Lynch.
Lynch, who was the party chairman for a dozen years, can paint himself as the adult in the race, the seasoned political hand who could beat back the challenge from whomever the Republicans put up.
Lynch has an instinct for the jugular (which he seemed to keep in his pocket last time) and a razor-sharp wit to do the cutting. If Lynch serves as his own political consultant this time around, and is the same kind of candidate that he was a party chairman, he could definitely hold the seat, especially with a presidential wind at his back in the general election. David Segal, alas, is probably too liberal for his own good. Rhode Island is a very Democratic state, but it is not a particularly liberal one.
Anthony Gemma showed a willingness to invest a lot of money, and even more time and effort into his campaign last time, but his message was muddled, and largely focused on in-state issues. From the day he announced his candidacy and laid out his platform, and every time rolled out a new idea, reporters were always asking him, “if that’s what you want to do, why aren’t you running for governor?”
Lynch ran an inexplicably bad campaign last time, if he were to sharpen his already impressive political skills and properly deploy them in a primary campaign, he would have to be considered the Democrat most likely to beat Cicilline, particularly if he could keep it a one-on-one race, unlike 2010’s crowded field, and avoid what Nesi dubbed ‘CD1: The Reunion Tour.”
That would be a political fight you could sell tickets to.

View more articles in:


Premium Drupal Themes by Adaptivethemes