Eventually, We’ll Have to Stop Hoping That Time Hasn’t Run Out
At some point, it has to stop being relevant to argue about what Rhode Island has to do to “break out of its death spiral,” as former Economic Development Corp. head Michael McMahon puts it, and start talking about how to rebound from the collapse. There’s something of a sense of fruitless repetition to McMahon’s suggestion for Rhode Island:
The only costs that are meaningful enough to have an impact are costs related to employment and social services. Some may challenge this approach on “moral” grounds. But this is not a moral issue. Rather, it is economic reality.
If Rhode Island is to break out of its death spiral, it must be prepared to do the following:
- Reduce existing pension and health-care costs to retirees by 10 percent across the board.
- Change retirement-benefit plans for all current employees from defined-benefit to defined-contribution and increase the age at which workers can begin receiving benefits to 65.
- Require all workers to pay 20 percent of their health-care costs.
- Consolidate Rhode Island’s school and municipal districts (fire, police, mayor/town manger etc.) into five entities, roughly along existing county lines — Providence, Kent, Washington, Bristol and Newport.
- Reduce social-service payments by 3 percent per year over the next five years.
I’m increasingly persuaded that the numbers destiny is written — meaning that there are just not enough people left in Rhode Island’s “productive class” (upwardly mobile working and middle class private sector residents) to force change through political means. That leaves only revelation; enough of the people invested in the system have to be persuaded that they’re going to lose more by not fixing the problems than by accepting the fact that their own deals with the system are the problems.
Pensions, social service payments, all of it, will be gone when the state collapses. It’s not an either or. You cannot keep what you’re getting, and the only question is whether the state has to collapse around you or you make yourself part of the solution.
But it’s very, very hard to take make that leap of faith. Before Tiverton’s financial town meeting, I had a pleasant and interesting conversation with a teacher with whom I last spoke during last year’s contract negotiations. He understands that the state needs to change the way it does business, but he’s not persuaded that it should begin, as I always say, from the bottom up. That is, from his union’s concessions up through the State House’s policies.
In the comments to my initial post about the financial town meeting, a local parent explains that he’s made the decision to back his children’s education. But that backing quickly becomes indistinguishable from backing the system as it stands — the system that has locked our public schools into a failing model and our economy into decline. If he accepts a 10% increase in taxes every year, as he claims to be willing, for the sake of his children, he’ll rapidly be paying more than a private school tuition each year in additional taxes just to support growing labor costs. And if we should have learned anything over the last decade, it’s that public sector unions controlling the levers of government will never say, “OK, we’ve got enough.”
Which, I guess, is to say that Rhode Island is done. We can and should keep writing the same essays over and over again, about how to fix the problem, but at this point, they’re all objections for the record. Our fervent hopes should focus, instead, on a quick collapse and rapid recovery.