PAWTUCKET — Pent-up anger over the state of the economy and Gov. Lincoln Chafee's budget proposals aimed at fixing it bubbled to the surface among business owners at Thursday's breakfast meeting with local state legislators sponsored by the Northern Rhode Island Chamber of Commerce.
State Representative Elaine Coderre (D-60th District) and state Sen. Edward O'Neill, (I-17th District) were the only two members of the local delegation to respond to the invitation from the NRI Chamber's Pawtucket Advisory Group. Both fielded some tough questions from business leaders who said they are frustrated by what they see going on in the state and what appears to be an unwillingness on the part of elected officials to make changes.
Several business leaders, including Peter Adams, owner of Ocean State Printers, and Richard Blockson, General Manager of The Times and The Woonsocket Call, spoke passionately about the need for pension reform, particularly among state employees. The topic of unfunded pensions and generous benefits enjoyed by state workers and others in powerful unions was a topic that dominated the meeting and generated lively discussion among the participants.
While no one had any simple solutions, there was a general consensus that drastic measures have to be taken by the state's lawmakers in order for the business climate to improve. However, there was also much skepticism on the part of those in attendance that the necessary changes would be made, particularly under the current legislative leadership.
O'Neill noted that the last governor, Donald Carcieri, had been hobbled by the legislature in many of the financial reform measures he had tried to do. He said the Rhode Island legislature “has the power in this state, and that's unfortunate.” He noted that the governors of other states, such as New Jersey, have the power to make key changes.
O'Neill added that “Pension reform is the 'elephant in the room.'. If that doesn't get fixed, it affects everything else.” Along those lines, Adams suggested that state lawmakers should “privatize everything you can possibly privatize.” O'Neill agreed, noting that if the pension liability problem is not fixed there will be bankruptcy “and then there will be no pensions. People don't get it,” he said. “They want the whole cake.”
Robert Billington, executive director of the Blackstone Valley Tourism Council, called for the need for a better analysis of the state pensions that are given out going forward to see what they will cost taxpayers down the road. He noted that lawmakers should only be voting on “what we can actually afford to do.” He admitted, however, the difficulty involved in trying to change entrenched attitudes about pensions and benefits. Without a major reform of the current system, “We're probably fixing a machine that can't be fixed,” Billington observed.
Paul Audette, of Providence Metalizing Co., agreed, saying that the current state pension system must be “deconstructed and then rebuilt from the bottom up.”He credited newly elected state Treasurer Gina Raimondo for having both the intellect and the courage to analyze the state pension system and bring it out into the open.
The generous pensions afforded to school teachers came up as well, although, as Paul Ouellette, of the Northern Rhode Island Chamber of Commerce noted, historically, teachers were provided with high pensions to offset their relatively low salaries of years past. “But, he noted, “Both pensions and salaries have risen over time.” He added, however, that while a lot has happened in the past to contribute to the current problem, “We need to move forward.”
Audette agreed, saying, “Changes have to be made because a lot of people are disturbed. There is a lot of concern that we are continuing to do things without regard about how to pay for it. It's not 'business as usual.'”
David Carlin, vice president of government affairs for the NRI Chamber of Commerce, said the matter of pension reform is something that will ultimately be decided by the U.S. Supreme Court. He said it will likely come down to legal challenge by labor unions over whether or not pensions are considered to be “property rights,” which Raimondo doesn't believe they are. He said Raimondo asserts that pensions, whether for retirees, vested or non-vested employees (those with less than 10 years) can be adjusted without compensation. “It will be up to the U.S. Supreme Court to determine if states have a right to change pensions without compensation,” he said.
The issue of benefits such as longevity pay and health insurance co-pays for state employees, including lawmakers, also spurred a lively discussion. Some, including Blockson and Adams, asked O'Neill and Coderre if they received health insurance from the state and what their medical insurance co-payments were. They also asked the two lawmakers if they felt this was justified.
Both lawmakers said that the health benefits were a mandated part of their compensation which they received, along with their annual salary of $14,000. O'Neill said he voluntarily contributes a co-pay of 20 percent, while Coderre said she pays 10 percent.
Coderre, a lawmaker for 27 years, explained that her health insurance benefit has changed over the years. She noted that from the time she was elected and up until about six years ago, her health benefit was free, and now there is a range of co-pays that are suggested to lawmakers. She said she currently contributes 10 percent and feels this is justified based on her time spent at the State House and doing the work involved with her elected position.
At one point, the discussion grew heated over the sway that lobbyists, particularly those from unions, and large-scale political donors, can have over legislative voting. Several participants suggested that public financing of campaigns is the only answer. O'Neill agreed, saying that when he goes to any political fundraising event, he is always interested to see who is there from various labor unions and political action committees. “These are the people who are influencing what's happening in state government. Public financing would take care of that,” stated O'Neill.
After one participant suggested that lawmakers were essentially “bought and paid for” by lobbyists, Coderre objected, saying that any compensation that she has received over the years as a lawmaker “doesn't come close” to the money she could have made over those same years in the private sector when she considers the time she has spent working on constituents' business. She noted that when she was first elected, the legislative pay was $300 a year.
Coderre also bristled at the notion that she has been influenced by political donors. She noted that many times during her career she has voted against labor interests, Chamber of Commerce interests and many other groups who have also contributed to her political campaigns over the years. “I read the bill, I do my homework...I am not 'bought and paid for,'” said Coderre, emphatically.
Both Coderre and O'Neill stressed the need for business leaders to contact their local state representatives and senators with their concerns. Both lawmakers stated that it really does get their attention if they get several calls and e-mails about a particular bill and people's viewpoints on how it will affect them.
O'Neill also got his message across that he believes the state budget needs to be deconstructed and reworked according to zero-based budgeting principles. The budget, he said, should be rebuilt from the bottom up, starting with the most important things and discarding those that are not necessary.
On a matter of local interest, Coderre also said she supported the amendment to Pawtucket's Home Rule Charter that would give the City Council the power to ratify all school contracts. Coderre was the main sponsor of a House bill that would allow the city to do this, and she said the measure passed by an overwhelming margin on Wednesday. It now heads over to the Senate for approval.
O'Neill said he also supports this concept of giving city leaders final approval over teacher contracts because “the people who have to raise the money for the contract aren't the ones who sign the contract.”
Another topic talked about at the breakfast was legislation currently in the works to change a state law that requires all non-salaried and non-commissioned employees to be paid on a weekly basis. Several business leaders said that having the ability to pay employees bi-weekly would cut costs and make payroll services more efficient.
In closing, Ouellette commented that lawmakers “have got to get hold of the budget and cut spending, not raise taxes.” He noted that, particularly with state pensions, there needs to be some changes, such as instituting a requirement for a minimum amount of time spent on a job. “A lot of us are saying, 'We should have been a state employee,'” noted Ouellette. “It's not the real world.”