A Debt You Can Leave Behind

The top story in Sunday’s Providence Journal had to do with the $30,000 that the average Rhode Island household owes in pension and other retirement benefit payments, beyond what has been put aside.

The bill now stands at $13.63 billion — $9.37 billion for pension payments that have been previously reported and $4.26 billion for other benefits, primarily medical insurance, that The Providence Journal has newly calculated from state and municipal financial reports. …
And that’s on top of more than $200 a year from each household to cover new costs accrued each year for pensions and benefits for future retirees.

Struggling families should consider that next time they hear of public-sector employees retiring in their early 50s. Of course, what the article doesn’t mention is that Rhode Islanders can settle this debt — at least for themselves — simply by leaving. That’s particularly relevant to an accompanying table that shows the unfunded liability for each town. Tiverton’s, I note, is $36,172,948. Little mostly-rural Tiverton swings beyond its weight class when it comes to a history of bad governance.
It’s at least a mildly silver lining to see what we’ve been saying around here being stated as explanatory fact:

Each year, through employee and taxpayer contributions, enough money should be put into pension and benefit funds to cover the credits the employees have accumulated, factoring in how much the contributions will earn through investments. …
The Governmental Accounting Standards Board says the money should be put aside in the year that the employee earns the benefit rather than after the employee retires. Delaying payment, as happens under pay-as-you-go, hides the true cost of the work force.

“Hiding.” That’s been the objective of Rhode Island’s corrupt government, and “pay as you go” continues to be the mantra of people, like Tom Sgouros, who owe their livings to the vast flood of money that rides along with public sector employees. (What savings might the state, schools, and municipalities realize if the labor union infrastructure were cut from the loop?) Pay attention when they argue that there really isn’t a pension problem or that people aren’t really leaving Rhode Island for reasons related to government. These are the arguments they’ve never had to make publicly because our elected representatives never pushed them on any of it.
Frankly, if the state has a debt that residents can avoid by leaving, it seems to me reasonable that the state can declare the larger part of that debt no longer owed. After all, taxpayers can leave it behind because taxpayers didn’t actually incur it as a debt.

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12 years ago

Rhode Islanders pay New York-level taxes for Mississippi-level public services and reelect the same corrupt party and politicians over and over again. There is truly no hope for Rhode Island.
If you could receive a tax-free check in the amount of $30,000 to move out of Rhode Island, would you do it? Now would be a wise time to leave because it’s going to get a whole lot worse before it gets any better. Don’t fool yourself – you will not martyring yourself for any noble cause by staying; your tax dollars will simply bankroll another 30-year “Greal Leap Forward” for the state as the same “progressives” and “experts” who brought you this mess use the same failed top-down government control models to attempt to fix the problem, enriching themselves in the process while hoping for another bailout from the more successful and business-friendly states via the federal government.

12 years ago

Leaving the state was exactly my first thought when I saw that 30K/household liability. The headline story drove the point home, squarely across my hindquarters. The thought of leaving is no longer an abstract mental exercise. The choice to stay or leave has now become a reality to be seriously contemplated.
The anchor cannot be easily lifted, however. Ten years of home ownership is like a ball and chain right now. Should I simply cut the anchor line, leave it lying on the bottom, and simply sail off? That really isn’t my style, but I’d wager the ranch that the bank would have no qualms about breaking contracts if it bettered the bottom line. I, on the other hand, honor my contractual obligations with the bank. I really think selling the property and breaking even is nothing more than pure fantasy right now. So near as I can tell, it’s either 30K and probably rising to the state gradually if I stay, or 30k to the bank immediately if I go. The only question is should I fold ’em and run like hell away from this place, or hold ’em and hope (state motto) things get better? It’s getting down to the river card, and bluffing by raising is not an option.

12 years ago

Start testing the waters, swamper. If you’re still working, look for a higher-paying job in a right-to-work, lower-tax state. Start looking at some properties online. Don’t use a real estate agent – try selling the house yourself online and see what kinds of offers you get. The important thing is that you’re exploring your options, unlike many Rhode Islanders who have given up hope or sold out to the system to try to get their share of the spoils.

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