Rhode Island: The Place Where ‘Da Contract Outranks ‘Da Constitution
When the news story of Central Falls’ entry into receivership first broke, there was chatter from some quarters and maybe even a little glee — perhaps a bit too much glee — that an era of fiscal reckoning in Rhode Island had begun. But what the terms of the reckoning were, no one was really sure. “Municipal receivership” did not have a clear definition anywhere in Rhode Island law and different news stories reported on a wide range of options that had been put onto the proverbial table. For instance, on May 20, John Hill from the Projo reported that…
The court-appointed receiver has the power to approve or reject purchases and payments and, if the court approves, change contracts with unions and vendors and hire and fire municipal employees.On the same day, Donna Kenny Kirwan of the Pawtucket Times reported that…
[John Savage], who said he’d be paid between $100 and $375 an hour for his work as receiver, said it was too soon to predict what he might ask the court to do, from imposing new contract terms or increasing taxes.
Savage is authorized to oversee the municipal business of the city, which includes making purchases, paying vendor bills, meeting payroll obligations and any and all other actions that involve daily operations. He also has final approval over the hiring and/or termination of “any and all” city personnel….…and on the day before, Eric Tucker of the Associated Press had said that…
Under questioning by reporters, he did not rule out a re-negotiation of union contracts, or some type of a property tax increase, but said that any such actions would have to first be approved by Superior Court, which has the final say in all such matters involving the receivership.
The appointment transfers day-to-day operational control of the city to Savage, who specializes in receiverships and says he’ll have the authority to recommend the renegotiating of municipal contracts or tax increases.Last week, the Governor and legislature gave definition to the terms of the supposed reckoning. They agreed on a new municipal fiscal stabilization law, passed with the Governor’s signature, that spelled out an exact meaning of “municipal receivership” (and several legal steps that have to precede it). And of all of the possibilities that had been discussed as measures that might be taken in Central Falls, only one was taken off of the table by the new law: the modification of existing contracts.
Politics, of course, requires compromise. So what did the Governor get in return for signing on to this law? Did he ask in return for contracts being made exempt from emergency fiscal stabilization measures, for example, that cities and towns be given the fiscal “tools” they’ve been asking for in order to have a better opportunity to balance their budgets on their own, before the occurrence of full-blown crisis requiring emergency stabilization measures? Well no, the “tools” legislation died in committee.
How about insisting on inserting a little accountability to citizens and taxpayers into the fiscal stabilization process? No, that wasn’t part of the plan either. Instead, the Governor and the legislature together created a plan for decapitating local governments and replacing them with state appointees not accountable to local voters, blatantly contravening the home rule provisions of the Rhode Island Constitution. If a receiver or state-appointed “budget commission” (another possible emergency fiscal stabilization measure) orders taxes to be raised, there is no direct recourse for the taxpayers, either via an administrative process or via the ballot box. The citizens will pay what they are told and they won’t be allowed to get in the way of determining how much of their income is enough.
In short, Rhode Island’s governing class, Democrat and Republican alike, have decided that the state Constitution is wholly ignorable while union contracts are sacrosanct. If our political class does not see a fundamental problem with this, then there can be no denying that government has truly become primarily a private interest of public sector unions and connected pols, aided and abetted by Republican officials who have decided that their job is to be middle-managers within a system owned by and operated for unions and special interests.