January 7, 2012
Public Pension Escrow Accounts?
Liz Boardman and Iain Wilson have an excellent article in Thursday's South County Independent previewing the new General Assembly session from the perspective of some area legislators. In it, Rep Spencer Dickinson (D-South Kingstown) stated that
He plans to call for the creation of state and municipal escrow accounts, so the money is there if the courts overturn the new pension law.“Passing something you think will be reversed in the courts is taking money now and kicking the can down the road,” Dickinson said. “We should be thinking about that on the state and town level. It’s not found money.”
I asked Rep Dickinson via e-mail where he thought the money would come from to fund city and town escrow accounts in view of the fact that all municipalities were either at break even or in the red. We spoke today by telephone; below is his response.
The possibility that the state will lose [the lawsuit anticipated to arise from pension reform] in court has to be taken seriously. It would be irresponsible not to.Budgeting of different towns is the responsibility of the councils and the mayors. Where would the money come from [for pension escrow accounts]? that is the responsibility of the town council or mayor.
In any town in Rhode Island, I believe that you could find several business owners who would say that they could look at the town budget and find money. It's the responsibility of elected officials and the mayor but there are people in the community who believe that they could contribute to the process.
Wait, what?? This is a whole new goofy-land.
"Budgeting of different towns is the responsibility of the councils and the mayors. Where would the money come from [for pension escrow accounts]? that is the responsibility of the town council or mayor."
Two words for you Rep, "unfunded mandate". You're telling mayors that they will be legally required to fund these accounts but you have no idea where the money will come from? Not your problem? Seriously?
"In any town in Rhode Island, I believe that you could find several business owners who would say that they could look at the town budget and find money. It's the responsibility of elected officials and the mayor but there are people in the community who believe that they could contribute to the process."
Umm, if they believed they could contribute to the process, THEY WOULD!
Find me a mayor or city council member willing to sit down with people and go over the budget, explain parts of it, listen to feedback and say "You know, we never thought about cutting that before. That's a good idea. We'll just take this pencil here and reduce that number and move the difference over into Rep Dickinson's trusty escrow account and voila! We are now in accordance with the state law. Thank you Mrs. Businessperson, you've been so helpful!"
Maybe I'm the one that is Looney Tunes.
Posted by: Patrick at January 7, 2012 4:19 PMThose are a lot of words for him to say "I don't know" or "not my problem."
Posted by: Dan at January 7, 2012 5:01 PM"Looney Tunes" is the correct analogy.
Listen up unionist {snip}-here's what happens in the unlikely event reform gets ruled unconstitutional:
1. State-EVERYBODY unvested goes into the social security system. Period. Do not pass go, do not get a 401 .
2. Munis-Helloooooooooo Bankrupctcy Court.
Got it-heads we win tails you lose.
Don't you know that state and muni workers already do contribute to social security? The pension just provides a boost to that check. And the COLA is just a funny word for a raise each year.
Posted by: Jim at January 7, 2012 9:56 PMRep. Dickerson gets the Flying Fickle Finger of Fate Award.
Posted by: Mark at January 8, 2012 12:39 PMWhat? I suggest the only fiscally responsible approach to the situation we are in, I do it on AnchorRising, and this is the response I get? We are definitely in Bizarro World.
--Spencer
Spencer, I for one am not questioning your fiscal responsibility. Heck, I'd love to see a lot more fiscal responsibility at the State House, aimed at things the General Assembly should be responsible for. My complaint about your bill is that it is yet another unfunded mandate by the Assembly on the municipalities.
If the towns had the money to put into escrow, then that means they'd have enough money to pay their pension obligations and reform wouldn't really be necessary.
Posted by: Patrick at January 8, 2012 9:00 PMWhy doesn't the state make cuts in its own budget and set aside the savings to the municipalities for said escrow accounts? Now *that* would be real fiscal responsibility.
The General Assembly can start with legislative grants and keep cutting from there. Of course then the "RI Minority Elder Task Force" (whatever the hell that is) would have to live without its novelty check for $5,000.00.
Posted by: Dan at January 8, 2012 9:43 PMDear Rep. Dickinson:
Are you out of your friggin' mind?
Feel free to come review my city's budget with me and I'll be happy to listen and consider all of your recommendations for cuts that will allow us to fund your escrow.
I agree with you when you say that "In any town...you could find several business owners who would say that they could look at the twon budget and find money." But just becasue these business owners "say" they can, does that mean that the money you speak of is actually there? Not likely, thanks to the huge state aid cuts and unfunded mandates imposed on local communities by the likes of our Genral Assembly members that are completely out of touch, such as yourself.
Wake up Mr. Dickinson, join those of us living with the reality our predecessors created with the help of your predecessors; oh, and let's not forget the binding decisions of the arbitrators that our General Assembly MANDATES!
Posted by: John at January 9, 2012 10:26 AMHey,
Beavis, Butthead, John, Tommy {snip}, Mark--
Where is all this hostility coming from? My point is this. If you think the reform bill solved your budget problem, it didn't. Let's recognize reality here. Pension contributions are made from your budget for schools, public safety, etc. You call that unfunded mandates? The bill that was passed barely scratches the surface of the problem -- municipal pension plans, other benefits, loss of revenue to Massachusetts casinos, etc. And the bill begs for a credible legal challenge. What is YOUR plan for paying your town's obligation three years down the road when the courts reverse the legislation? Just asking.
I believe Spencer is one of the bought and paid for union {snip} who voted AGAINST the very modest Raimondo pension reform.
Breaking news on RI Futue-as of tommorow it's baaaaaaaack.
I'll be signing up until they bar me.
"Pension contributions are made from your budget for schools, public safety, etc. You call that unfunded mandates?"
No. When the General Assembly passes a law that tells a town that they must put money toward a specific purpose without giving the town that money, that is an unfunded mandate. There are many of them at the State House and they should all be eliminated.
"What is YOUR plan for paying your town's obligation three years down the road when the courts reverse the legislation? "
My plan? I don't have one because it's irrelevant. It's not like I can call up Dan McKee and say "Hey Dan, here's my plan for what you need to do if the pension reform bill is overturned." That's his job to worry about that. Will he do the right thing? I hope so. What you bring up is a valid question, what will the towns do if they take advantage of the savings now and then have to pay it back later? That's something that each mayor should have to answer. But none of them should have that answer forced on them by the General Assembly.