Left Holding the Bag
The ProJo headlines the $9.4 billion pension liability, but also mentions the $2.4 billion health care liability. That’s $11.8 billion in money owed to state and municipal retirees (some of which is funded). They try to soften the blow explaining that an 80% funding level “is considered healthy” for pensions. So that makes it about a $7.5 billion pension obligation (if we include health care–assuming the 80% “rule” applies–the overall would be $9.4 billion). Yes, some pensions are partially funded, but it’s still not good.
Most of Rhode Island’s pension plans fall short of the 80-percent funding level, a gap of more than $5.7 billion. Of the 155 plans, more than 100 are less than 80-percent funded.
The 37 plans run by municipalities are in the worst financial shape, with 32 of them not reaching the 80-percent level.
Historically, pension contributions to the locally run plans have often been shortchanged in favor of other municipal services –– such as education, public works and public safety –– when money is tight.
The only solution is massive reform to current pension plans. Some fundamentals seem like no-brainers: move up the retirement age; no more double-dipping; no more buying “good” years. Some will be tougher, like trying to move to a 401K system with current employees (the Laffey idea of cutting them a check and telling them to invest wisely!). This isn’t about sticking it to government employees. You were made promises. They have been broken. Let’s not forget who did this.
For all of these broken promises were made by politicians who continued and continue to be re-elected. 70 years of Democrats have done this to you, Rhode Island. That’s the truth. Don’t blame the odd Republican Governor or occasional Republican Mayor for this. It was the Democrats in the General Assembly, on the Town and City Councils, on the “non-partisan” school committees who made these broken promises. This is what letting yourself become beholden and brainwashed into thinking that one party–the party of the “little guy”–would look out for you.
You elected them because they promised you a “good deal”. Now you and your kids and grand kids and Rhode Island taxpayers and their kids and grand kids are all left holding an empty bag full of broken promises. All because elected officials, almost all of them Democrats, told you what you wanted to hear and you believed them. It’s worked out for them. How’s it working out for you?