“Sins of the Past” Contribute to Pension Woes
ProJo has the story:
Acting Auditor General Dennis E. Hoyle said…cities and towns need to look at their sometimes generous retirement plans, determine whether they are “sustainable or not” and make changes. He said cities and towns could improve the situation by making full contributions each year, raising employee contributions and transitioning out of defined-benefit plans to defined contribution or hybrid plans for new hires.
“Without changes in the benefit structure, there’s not going to be that much of a dramatic savings” he told the commission.
As Dan Beardsley of the Rhode Island League of Cities and Towns said,
…cities and towns are trying to deal with the “sins of the past” when it comes to promised retirement benefits, but he acknowledged it is a challenge. It would help, he said, if the state allowed defined contribution and hybrid plans for cities and towns that enroll employees in the state Municipal Employees Retirement System, because those would lower projected costs for new hires.
Take Cranston, for example:
Hoyle cited the Cranston police and fire retirement system as an example of a plan that is in trouble. According to the report, the Cranston plan covers 70 active members and 426 retirees and has enough money to cover just 15 percent of its projected obligations. As a result, the annual required contribution needed to keep pace with projected costs is $20.1 million. By contrast, the annual required contribution for the state Municipal Employees Retirement System, which covers 14,667 active employees and retirees — more than 29 times as many people as the Cranston plan — is $33.5 million.
We need statewide reform to help enable local reform. But it’s up to citizens to ensure that their politicians don’t continue to kick the can down the road or, worse, try to “solve” the problem through higher taxes. Reign it in.
I like the fact that these problems are being exposed. I only hope that those communities that have done the right thing over the years will not be burdened with the cost of fixing the problems created by sleazy politicians that cooked the books or sold out to unions with things like the 6% COLAs enjoyed by some Providence firefighters.
As financially troubled as my home town is (Woonsocket), we never gave away the store like some of those chumps did!
It’s this kind of stuff where I think the RIGOP really drops the ball. Spend the money they have on ad campaigns explaining this stuff. It can be done in 30 seconds. Get the word out that the Assembly isn’t doing anything to help the financial problems in this state and if they don’t by November, there are Republican candidates who will enact some of the types of things being suggested by people like Beardsley.
Rather than chasing people like Caprio or Laffey or dropping $1,000 around on lit drops for candidates, spend the money advertising for the generic Republican candidate.
I just don’t get it.
Attn General Assembly…this is your cue to do SOMETHING…hello? Is this thing on?
–“spend the money advertising for the generic Republican candidate.”
Patrick,
Great idea.
But first the RIGOP would have to agree on a platform and shared set of issues and proposed solutions to them.
Good luck with that. The “moderates” are in the pockets of the Democrats & unions and would veto any such effort. They buy personal political “labor peace” by hobbling the GOP and keeping it from becoming competitive.
RRI, I think the RIGOP’s platform in November should have 1 plank. Economy. Jobs. Taxation issues. That’s it. Let them talk about all the social issues they want. Let them run on gay marriage or whatever the next great social program is. I would run on creating jobs, spurring business, cutting taxes down to a point where it increases consumption and production. That’s it.
James Carville was right.
I agree that the campaign emphasis should be on the economy, though the platform should be clear on the social issues as well.
Good starts for an economic platform would be: a public sector pension freeze / conversion to a defined contribution model; universal education vouchers for children; reducing welfare benefits to federal minimums; repeal of the statute granting teachers permission to unionize (even better, extending this to all public sector employees).
Also, benchmarking NH with a stated goal of eliminating the income and/or sales taxes within 5 years.
Talk about bright line differences! Force the Democrats to defend high property taxes, bad schools, moribund economy, pensions and perks for the privileged public sector …
RRI, which office you running for? You got my vote.
The Dems would not defend high taxes, they’d attack the taxes that would increase. As soon as you breathe the words “NH model”, they’ll trot out the property tax rates that NH pays. Yes, I know that NH overall pays less in taxes than we do, but that’s the direction that I would go if I were a Dem having to shoot down that proposition.
Look at many of the states with no income tax. How can they afford that? Quite often it is through tourism. How’s RI’s tourism compared to NH? I’m guessing not even close. NH has the mountains with skiing and they can tax the hell out of that. Sure there are no sales taxes, but they pay almost 10% in meals tax and I have no idea what the lodging tax is. But if we want to be similar to NH, we’d have to be similar in more areas than lack of tax structures.
Patrick,
Sorry, but I’ve no interest in running for office, for a whole bunch of reasons, one being I really don’t want to have to rub elbows with the kind of slime that inhabits the General Assembly, much less have my name and reputation in any way associated with that corrupt institution.
NH is no bargain for property taxes, but I’m not convinced that they’re significantly higher than RI (if they’re higher at all).
Yes, there’s a bit of apples and oranges in comparing RI and NH. OTOH, both are New England states confronting the region’s high energy costs and NH, with a much larger geographic area of roads to maintain, but a population about the same as RI’s, manages to run the state with one major tax (property) instead of RI’s three major forms of tax (property, income and sales).
Without a doubt RI could greatly reduce expenditures and thus taxes.
It’s not likely to happen, which is why productive people are continuing to “Go Galt” and leave Rhode island.
Patrick, your comment recommending a platform for the RIGOP contains an admirable sentiment but misses the real point. Full employment and good-quality jobs are a result of a healthy economy; which is a result of a healthy, producer-oriented business environment based on low taxes, reasonable regulation, and a well-educated workforce with a strong work ethic; which is a result of laws and government policies that structure such an environment. The platform needs to lay out specifically what those laws and policies would be if the GOP were to have a majority in the General Assembly and the Governorship. That’s what a platform is.
Platform, talking points, whatever you want to call it. 90% of the voters don’t care what a “platform” is. They just care that they’re going to have a job and pay their bills. Make that the #1 and only issue in the campaign. Start driving the bus and make the Dems play defense for the next 8 months. Point out all the areas where the Dems have failed and just give a few ideas on what Republicans would do if they were in office instead. Even come right out and say, “Social issues are on the back burner. We’re not worried about those things when we have unemployment at the levels we do. When we’re one of the most overtaxed states in the country. When we’re one of only two states to see a decrease in its citizens. People are leaving because they can’t survive in RI. Republicans will work to fix that. Dems have created it, let Republicans fix it.”
That’s the direction that I would take the whole campaign and see if it’d work. I think very few people care to get much more wonky than that.