Let’s start with the premise, often stated in this space, that the state employees, school teachers, et al., are getting hosed by having their pension rules changed in the middle of the game. I don’t want to keep having to say that over and over, so just incorporate that thought into everything that follows in this essay.
That being said, General Treasurer Gina Raimondo and Gov. Lincoln Chafee didn’t do too bad a job fixing what was threatening to become an out-of-control pension plan. Yes, union leaders are howling about it, but if they are honest, they will tell you that it could have been worse. A lot worse. If you don’t think so, just imagine what this proposal might look like if Donald Carcieri were still the governor. Either that, or call up some retired cops and firemen in Central Falls and ask how they are doing these days.
First of all, you had to know that anyone who was at all serious about reforming the pension system had to finger the COLAs as the first thing to go. That was the gaping wound through which all those taxpayer dollars were bleeding out. That the COLA freeze is temporary (if you consider an estimated 19 years temporary) and a mechanism is created for a differently-calculated COLA once each pension fund reaches 80 percent funding, is an indication that Raimondo was acting in fairly good faith as far as the employees and the retirees who are still going to be alive 19 years from now are concerned.
Other such indications are that all benefits accrued by employees up to the effective date of the new bill (next July 1, if all goes as planned) they get to keep. And employees who are already eligible to retire can do so when they please; the new minimum retirement age tabbed to the Social Security retirement (now between 66 and 67, depending on the year you were born) will not apply.
If the employees and even retirees in the state system don’ think those provisions are reasonable, they should listen to some of the remedies recommended by callers and some hosts on talk radio.
The big question now is: what becomes of the bill now that it is in the hands of the General Assembly?
As you might expect, very few people think the legislature is going to pass the package as is – “monkey with it” is a phrase I must have heard at least two dozen times in the past week from people predicting what they think the legislature will do with the bill.
I’m not sure, but my hunch is that it is going to pass pretty much intact.
Obviously, there is going to be a lot of political pressure from unions to amend or kill the plan, but contrary to popular myth, union power isn’t all that potent on Smith Hill anymore. There was big union pressure for binding arbitration, there was big union pressure to prevent mayoral academies, there was big union pressure to derail the last two or three rounds of pension changes. The unions went away mad each and every time.
On top of that, on this issue there is big anti-union pressure.
The group EngageRI (which should disclose the sources of its funds even though it isn’t legally required to), is running newspaper ads as well as spots on radio and TV in favor of the Raimondo reform, RISC (RI Statewide Coalition) is on its toes keeping its members informed and agitated on the issue. Common Cause is watching the legislative process and its adherence and non-adherence to the rules like a hawk.
There will nonetheless be people forming opinions about what should happen despite the fact that the sum total of the knowledge they have about the substance of the proposal is a bumper sticker that they saw or a slogan they heard somewhere. As much as we don’t like to think so, that is a pretty accurate description of most voters on most issues and candidates. That, and not greedy unions or venal politicians, is a big reason for why we got into this mess and many of our other problems in government and politics. The first link in the chain that does a lousy or lazy job of fulfilling its responsibilities is the electorate.
Organizations like EngageRI, RISC, the various Tea Parties, Operation Clean Government and Common Cause are trying to fix that and they just may be starting to succeed. Most of the people who work in the private sector have already been cheated out of decent pensions by the companies they work for and it makes them jealous of anyone who still has one, never mind a COLA, too. That, I believe, is one of the principal reasons this issue has seemed to cut through the apathy and capture the public’s attention.
Ironically, while a lot of civilians are worried that the legislature is going to “monkey with” the Raimondo plan, some of the Republicans and dissident Democrats in the House – who you might expect would embrace the plan – seem suspicious that leadership is going to ram the bill through as is and not allow amendments to be given proper consideration. They seem pretty keen to make some kind of changes to the bill, although we haven’t heard much about what those changes might be.
If the legislative ego is such that lawmakers feel they must make some change to the bill to put their mark on it and not have it be said that they swallowed the general treasurer’s plan whole, my guess is they will yank the provisions to change the independent municipal (non-MERS) plans.
That way, the legislators will get to have their say, they will look like heroes in their home districts, where mayors and town administrators are screaming because the state didn’t bail out their crippled local plans and they will once again deny Chafee a high-profile initiative he has been pushing for.
The governor was always big on including the local plans but Raimondo seemed to only reluctantly go along to keep Chafee inside the tent. Besides, this seems to be the only component that can be pulled out of the bill without having the rest of the reform structure collapse like a house of cards.
Public hearings start this week. It’ll be a fun fight to watch.