Making Headway Toward Fiscal Sanity

At first glance, it would appear that there is good news coming out the State House today.

Just before the stroke of midnight, a key House committee approved a new state budget that includes major cuts in public-employee pensions.

The move is expected to save the state and local communities $44 million in the coming year.

The much-vaunted pension reform was the cornerstone of the proposed new $6.3-billion state and federally financed budget for the year that begins July 1. At 11:54 p.m., the House Finance Committee gave its unanimous support of the measure, sending it on to the full House for a vote as early as Monday.

The pension package reinstates, for the first time in nearly two decades, a minimum retirement age.

To get a full pension, new state workers and public-school teachers -- and people in either group without the 10 years needed to be vested -- would have to be at least 59 years old and have worked for 29 years. That group includes about 4,350 state workers and 7,000 teachers.

The proposal also limits the maximum pension benefit to 75 percent of salary for workers with 38 years of service, and ties annual cost-of-living increases to inflation, with a cap at 3 percent.

"We're trying to do real reform and balance the equities and unfortunately it's going to land on the backs of some," said House Majority Leader Gordon D. Fox, D-Providence. But, "even what we've come out with, with the worst-case scenario, it's still a very good pension for a life's work."

The pension changes closely mirror what Governor Carcieri recommended in January, with minor tweaks around the age of retirement.

"I'm happy that the House Finance Committee seems to have accepted much of my plan for reforming the state pension system," the Republican governor said in a statement last night.

The Assembly also adopted Carcieri's suggestion of allowing workers to retire at age 65 with 10 years of service. The lawmakers' plan would allow earlier retirement for workers age 55 with 20 years service, but with a reduced pension.

The House and Senate plan to study changes to the pensions of other state employees not included here, such as state police, judges and employees at quasipublic state agencies.

Overall, the budget adds $95 million to the one proposed by Carcieri in January and is 6.5 percent larger than the spending plan for the current year.

Yes, it is good news/bad news, with the pension cuts counterbalanced with spending in other areas, but it cannot be doubted that the Governor has made headway. It would also seem that the Democrat leadership in the legislature has stuck their finger in the wind and can tell which way it's blowing. I think they can tell that the public is finally fed up and in an effort to save their political skins, they have acquiesced. Thus, now is no time to let up. This is just the first battle and there is no guarantee that it has actually been won just because the politicians seem to be saying so. The foot-dragging over implementation of Separation of Powers should remind us all that nothing is ever guaranteed. If we sit back and think it's over, we may soon find that we're right back where we started. In fact, a letter to the ProJo from Phil Stone of Providence reminds us all what else has gone on in just the last week:

Let's see if I've got this right: During the week of June 13, members of the Rhode Island General Assembly voted to legalize the smoking of marijuana. They voted against arresting prostitutes who work inside a building. They voted to unionize child-care providers, even though the program that we have is costing the state over $80 million a year. And, finally, they entertained a proposal to charge all full-time college students in the state $100 per semester, even though the cost of education is at an all-time high.

What a week! I can't wait to see what our senators and representatives vote on next.

Do you think it might be time to elect some new people to represent the taxpayers of Rhode Island? If this were not so absurd, it would be funny.

Let's keep the pressure on and keep supporting this Governor.