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PROVIDENCE â In an effort to address the local pension crisis, State Representative Lisa P. Tomasso (DâDist. 29, Coventry, West Greenwich) believes that municipalities need to begin viewing their yearly contributions as a requirement â rather than a luxury.
Tomasso introduced legislation to the House on Wednesday that would begin to do just that. The bill was co-sponsored by Representative Michael W. Chippendale (RâDist. 40, Foster, Coventry, Glocester) and Representative Larry Valencia (Dâ Dist. 39, Charlestown, Exeter, Richmond).
The legislation suggests that any surplus reported at the end of a fiscal year be automatically applied towards the townâs Annual Required Contribution (ARC).
In fiscal year 2010, the ARC for the municipal pension system in Coventry was $986,000, of which the town contributed 57 percent. Additionally, the ARC for the police pension system in Coventry was $3,520,000, of which the town contributed 64 percent.
If passed, the legislation would require that if the town was notified of a surplus, the amount needed to fund a 100 percent ARC contribution would automatically applied. In Coventry's case, this would mean the remaining 43 percent into the municipal pensions and 36 percent into the police pensions. If passed, this legislation would affect all municipalities.
Tomasso suggested that only if a townâs full ARC is contributed and still there are funds leftover, then the town should spend it as needed. She compared the scenario to a family that realized some extra money at the end of the year and rather than paying much needed bills, they spent it on a vacation.
âThis legislation simply ensures that communities prioritize their ARC payment as a bill as opposed to a luxury,â she said.
âThe ARC is not a choice. To not make that payment is to have defaulted on a bill that you have owed. Itâs disingenuous to the taxpayers,â said Tomasso, adding that doing so was ânot proper because at the end of the day, the money is put into CDs and different accounts and spent on different projects that you need the money for.â
The legislation has been assigned to the House Municipal Government Committee. Tomasso stated that she has been in discussions with Senator John J. Tassoni, Jr. (DâDist. 22, Smithfield, North Smithfield) in regards to a Senate version of the bill.