A Debt You Can Leave Behind

The top story in Sunday's Providence Journal had to do with the $30,000 that the average Rhode Island household owes in pension and other retirement benefit payments, beyond what has been put aside.

The bill now stands at $13.63 billion — $9.37 billion for pension payments that have been previously reported and $4.26 billion for other benefits, primarily medical insurance, that The Providence Journal has newly calculated from state and municipal financial reports. ...

And that's on top of more than $200 a year from each household to cover new costs accrued each year for pensions and benefits for future retirees.

Struggling families should consider that next time they hear of public-sector employees retiring in their early 50s. Of course, what the article doesn't mention is that Rhode Islanders can settle this debt — at least for themselves — simply by leaving. That's particularly relevant to an accompanying table that shows the unfunded liability for each town. Tiverton's, I note, is $36,172,948. Little mostly-rural Tiverton swings beyond its weight class when it comes to a history of bad governance.

It's at least a mildly silver lining to see what we've been saying around here being stated as explanatory fact:

Each year, through employee and taxpayer contributions, enough money should be put into pension and benefit funds to cover the credits the employees have accumulated, factoring in how much the contributions will earn through investments. ...

The Governmental Accounting Standards Board says the money should be put aside in the year that the employee earns the benefit rather than after the employee retires. Delaying payment, as happens under pay-as-you-go, hides the true cost of the work force.

"Hiding." That's been the objective of Rhode Island's corrupt government, and "pay as you go" continues to be the mantra of people, like Tom Sgouros, who owe their livings to the vast flood of money that rides along with public sector employees. (What savings might the state, schools, and municipalities realize if the labor union infrastructure were cut from the loop?) Pay attention when they argue that there really isn't a pension problem or that people aren't really leaving Rhode Island for reasons related to government. These are the arguments they've never had to make publicly because our elected representatives never pushed them on any of it.

Frankly, if the state has a debt that residents can avoid by leaving, it seems to me reasonable that the state can declare the larger part of that debt no longer owed. After all, taxpayers can leave it behind because taxpayers didn't actually incur it as a debt.