Question 2 to Moderate Party Gubernatorial Candidate Ken Block: One set of criteria in the new fiscal stabilization law that can trigger a municipal takeover by the state involves decisions made by bond-rating agencies. The 1990s RI Supreme Court opinion which will likely be used to justify this new law begins with the statement that “on or about July 16, 1993, Moody’s Investors Services, a recognized bond-rating agency, downgraded the town of West Warwick’s municipal bonds to a grade Ba”. Are we living in a society that believes that financial-industry needs take precedence over democratic voice?
|Looking at state finances holistically, and looking at our town finances holistically, our elected leaders have done an awful job of strategic planning and thinking and laying out sustainable budgets and insuring that we can handle financial crises when they come down the line… || Audio: 50 sec|
|The credit agencies and the bond ratings, where they look at the states finances and town’s finances as a whole, look at the unfunded liabilities and pension plans, look at where the tax dollars are going and look at what other liabilities you have is a very necessary benchmark in my opinion, to determine if we have a problem or don’t have a problem, because we don’t really have a mechanism other than that, unless we send in the Auditor General because something has been raised as a red flag. I think the bond ratings agencies are probably a good canary in the coal mine, to determine if we have a substantial problem… || Audio: 1m 4 sec|
|We have to get our hands around this, and do something about it, because the average taxpayer is entrusting their elected leaders to just do the right thing, and when they don’t, what do we do? We don’t really have a recall provision. We don’t have a systematic way for assessing the health of governments and budgets and finances… || Audio: 25 sec|
|We need to have the early warning. We need to have a process and procedure in place. If a town is spiraling down the insolvency drain, how do we yank it out of there…You can certainly make the claim that we’re stepping out of the boundaries of the strict constitutional read of things, but in the absence of a better idea right now, I think it’s appropriate and necessary, because we can’t have the disasters unfolding that appear to be happening to us… || Audio: 42 sec|