This week, the State House Report primarily centers on the upcoming pension overhaul lawsuit. Not only will this week’s developments be covered, but also the origins of the contentious pension debate.
In addition to pension news, the looming “fiscal cliff” and a notable government appointment are also on the docket. read more…
Does Rhode Island’s Pension Reform Law have Any Hope of Survival?
A Political War
But Raimondo and other state leaders such as House Speaker Gordon Fox, have said the time for negotiating was last year. The Treasurer said she would be willing to sit down with all sides if Taft-Carter encourages such discussions to take place, but she remains opposed to “closed-door” meetings.
Union Leader Compares Raimondo to Mitt Romney
Judge has a Conflict
“The Judge’s character and work ethic are not in question, but what should be focused on is the clear language that sets forth when a judge should recuse themselves from particular cases,” Blais said.GoLocalProv | News | Does Rhode Island’s Pension Reform Law have Any Hope of Survival?.
A lawsuit filed by several Rhode Island unions following state municipal pension reform last November goes before Superior Court Judge Sarah Taft-Carter tomorrow. The hearing provides Taft-Carter an opportunity to rule on a state motion to dismiss the case, which, if upheld, would be a major step toward solidifying the pension reform as state law. But if the judge strikes down the state’s motion, as most analysts expect, litigation will continue until the parties have expended all their options, including a possible appeal to the State Supreme Court. The process may continue for several months or until the parties negotiate an acceptable alternative settlement.
“It’s a nine-inning game,” said Scott Mackay, political analyst for Rhode Island Public Radio. “We’re in the second inning.” read more…
How could Rhode Island’s pension reform efforts inform Cook County’s solution? Rhode Island Treasurer Gina Raimondo, the architect behind some of the country’s boldest pension reform, joins us with Cook County Commissioner Bridget Gainer on Chicago Tonight at 7:00 pm.
PROVIDENCE, R.I. (AP) — Public-sector unions on Tuesday hailed Gov. Lincoln Chafee’s call for negotiations to settle a closely watched lawsuit over Rhode Island’s landmark pension overhaul, but its main architect, the state treasurer, insists the dispute should be left to the courts.
J. Michael Downey, president of Rhode Island Council 94, said there’s still time to craft a compromise that prevents a protracted court battle. While there are no negotiations currently under way, Downey said, Chafee’s comments were a promising development in the contentious fight over public pensions.
“We have been — and are still — willing to come to some resolution rather than fight this through the courts for years,” Downey told The Associated Press.
The unions’ lawsuit has attracted national attention because it likely foreshadows similar battles elsewhere as states grapple with their own pension problems. On Friday, a judge will hear oral arguments on the state’s motion to dismiss the lawsuit.
On Monday, Chafee told WPRI-TV that the state should pursue negotiations to prevent a budgetary calamity if the overhaul is struck down.
“We’re the ones stuck with the bill if we fail in court and so we are the ones that really have the responsibility to pursue every avenue possible,” the independent governor said. “That includes negotiations to get this settled so we don’t fall into a deep, deep hole if the court case is adverse to us.”
Treasurer Gina Raimondo, a Democrat who championed the pension overhaul, wants to see the matter decided by the courts. Top lawmakers also remain supportive of the legislation, which Chafee signed into law a year ago. Raimondo noted that the pension law is already a compromise of sorts; lawmakers softened some provisions after hearing from public-sector unions during days of hearings on the bills.
“We have a strong case,” she said. “We have to let this process play out. It’s in the courts. I trust the courts. Let’s let it weave its way through.”
The law is designed to save billions of dollars in future years by suspending pension increases for years, raising retirement ages and creating a new retirement system that combines traditional pensions with 401(k)-like accounts. The changes, which went into effect July 1, affect active and retired state workers, teachers and those municipal employees covered by the state’s pension system.
When the law was passed, supporters — notably Chafee and Raimondo — argued that without significant action, rising pension costs would swamp state finances, putting funds for education, roads and future retirement benefits at risk. Before Rhode Island’s reforms passed, its pension costs were set to jump from $319 million in 2011 to $765 million in 2015 and $1.3 billion in 2028. The state’s annual budget is $7 billion.
Workers and retirees accused state leaders of reneging on promised benefits and urged Chafee and the General Assembly to negotiate an alternative to the proposal.
“This was shoved down people’s throats,” said Bob Walsh, executive director of the National Education Association Rhode Island. “This can be resolved through real conversation.”
Any compromise that is worked out between Chafee, unions and lawmakers could be considered by the General Assembly when it convenes next month, Walsh said. He said it’s too soon to say what form a compromise might take — pension increases, retirement ages and types of benefit plans could all be part of the discussion.
Top lawmakers, however, remain supportive of the law as written. House Speaker Gordon Fox, D-Providence, said in a statement that he was “extremely proud” of the process that led to the overhaul.
“After months of review, which included 30 hours of open public testimony, we enacted a bill that we believe will withstand the challenge currently pending in our courts,” he said.
Chafee spokeswoman Chris Hunsinger said she was unaware of any plans by Chafee to begin negotiations with union leaders. She said Chafee remains confident about the state’s chances of prevailing but is open to considering ways to stabilize the pension system without a long and uncertain court battle.
“I’m not sure what the perfect time for negotiation would be, but I do know it’s never too late,” she said.
PROVIDENCE, R.I. (WPRI) – Gov. Lincoln Chafee is calling for both sides in the state pension reform lawsuit to come to the table and negotiate even as the case moves through the courts.
“In any litigation it’s common practice to have negotiations,” Chafee said. “I’m in favor of that: of having negotiation as litigation goes forward.”
Chafee made the comments days before a Superior Court hearing where Judge Sarah Taft-Carter will consider arguments on the state’s motion to dismiss a union lawsuit challenging the pension law, which Chafee signed into law last fall.
“We’re the ones stuck with the bill if we fail in court and so we are the ones that really have the responsibility to pursue every avenue possible. That’s fair to the taxpayer,” Chafee said. “That includes negotiations to get this settled so we don’t fall into a deep, deep hole if the court case is adverse to us.”
Nesi’s Notes: In-depth pension coverage
Union leader Robert Walsh – executive director of the National Education Association Rhode Island – applauded the governor’s comments, saying the court process will likely take up years and dominate every budget discussion during that time.
“I think [negotiations are] the only way we are going to get the pension situation solved permanently,” Walsh said. “We think we’re going to win in court, but that … we are going to be back doing this again.”
Walsh said the unions’ argument is that there were “more reasonable alternatives” the state could have taken besides enacting the pension reform law.
In the past General Treasurer Gina Raimondo has expressed confidence that the state will prevail, and House Speaker Gordon Fox released a statement Monday that seemed to give the thumbs-down to negotiations.
“After months of review, which included 30 hours of open public testimony, we enacted a bill that we believe will withstand the challenge currently pending in our courts,” Fox said in the statement.
“Thirty hours? That’s nothing,” Walsh responded. “The treasurer has not shown openness … I realize there are political considerations.”
Raimondo is believed to be considering a run for governor in 2014.
Walsh took issue with Raimondo’s national attention for the pension changes in Rhode Island. She has given several talks on the law and appeared on national television discussing it.
“It’s really not a true story because they suggest we were at the table bargaining with them,” Walsh said. “No we were not; this was imposed upon us.”
The law enacted last November is aimed at saving billions of dollars by suspending retirees’ cost-of-living adjustments (COLAs) until the pension system is 80% funded and moving most current employees into a hybrid pension plan. The changes took effect on July 1.
Raimondo was in Washington, D.C., on Monday to attend a forum at the Brookings Institute and was not available for an interview. But in April, she warned that the impact on Rhode Island would be “devastating” if a judge throws out the law.
“If that law is repealed the municipalities will have to find $100 million next year alone,” she said. “You will see devastation, I believe, in municipalities not being able to pay those bills.”
It’s widely believed the case will end up in the hands of the R.I. Supreme Court.