The Deleterious Distinctions of a Disability Pension (And Their Dubious Designers)

Under Patrick's post, Max Diesel asks

Does anyone know how much this clown's pension was bumped with and without the disability after coming back as chief?

The answer is that, in Rhode Island, a regular pension is taxable. A disability pension is not taxable.

And this continues for the life of the retiree. But why should it? Once the employee hits retirement age, the regular pension should kick in. That provision alone would go a ways to reducing the percentage of public employees who go out on disability pensions, as Tim White illustrates in his excellent 2008 expose of Rhode Island's disability pension problems.

The lowest overall disability rate goes to the city of Pawtucket. The rules there say police and firefighters who get hurt on-the-job collect a disability pension until their 20th year, when they would normally retire.

It then gets converted down to a less-lucrative service pension. As a result, you will find only 6 Pawtucket firefighters collecting a disability pension. No other town we examined has this provision.

Once again, as in so many other matters of fiscal policy, this is a very reasonable adjustment that elected officials on the state and local levels have inexplicably eschewed.

By the way, the Dissembler from the First District gets mentioned in White's report, once again exaggerating an aspect of Providence's fiscal situation.

Providence Mayor David Cicilline says, "It used to be the case that once you received a disability pension that you essentially received it forever."

Mayor Cicilline says an ordinance passed this year [2008] aims to change that.

"We now have a revision that requires an annual certification of your disability," says Cicilline.

So rather than addressing the problem directly by changing the policy (disability pension to be converted to regular pensions at age 65), then-Mayor Cicilline backed a half-hearted step that has done bupkis to cut back on the number of disability pensions issued. It sounded good at the time, though, didn't it?

As for the term that Max uses to refer to Mr. Farrell, I understand that Max is very frustrated - as we all are - at this manifestation of an irresponsible and indefensible policy. It should be noted, however, that the real "clowns" here are the decades of elected officials who took a raft of fiscally criminal measures and turned them into law. Had they not done so, the door would not have been flung wide open, in this and so many other areas, for the Rhode Island taxpayer to be mugged on a remarkable scale.