RI’s Unions Are in Battle Across the State — Budgets and Pensions Are in Distress
GoLocalProv News Team
RI’s Unions Are in Battle Across the State — Budgets and Pensions Are in Distress
On Wednesday, a new conflict erupted in Warwick where unions assert that Mayor Joe Solomon is leading a raid on the pension funds of the Warwick School Committee Employee Retirement Plan in order to divert $4 million from the pension fund to fill a gap in the Warwick School Department budget.
“I object to Warwick’s Mayor calling a decision to take money out of a pension fund the best birthday gift he has ever received. While the plan may be well funded currently, removing funds already deposited to a pension plan raises a host of legal and ethical issues,” said J. Michael Downey, President of Council 94,
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“A pension plan is not a piggy bank. We urge Mayor Solomon to reconsider. Council 94 will now examine and pursue all options available to prevent an ill-advised raid of the Warwick School Committee Employee Pension Plan,” added Downey.
Council 94 represents over 10,000 active and retired state, municipal, and private sector employees.
Mary Townsend, RI Council 94 Municipal Vice-President & President of Local 357, Warwick Independent School Employees, stated, “I am deeply concerned about the city of Warwick’s intention to divert $4 million dollars from the Warwick School Committee Employee Pension Plan. As a Pension Plan Board member, I have not been presented with a plan or an actuarial study to determine the impact on our retirement system. My members and I have worked hard to ensure that our retirement plan has stayed healthy.”
Founder of the Rhode Island Moderate Party and former GOP gubernatorial candidate Ken Block took to Facebook on Wednesday and said that while key economic indicators across the country are positive, the fundamentals in Rhode Island related to the state and local budgets are in distress.
“Anyone else get the feeling that government finances seem to be spiraling out of control? It feels like the pension crisis, which everyone has known was coming for decades, is here. Warwick is in serious fiscal trouble, as is Providence and very counter-intuitively, East Greenwich,” said Block.
“The state pension system has gobbled up $2.5 billion from taxpayers and seen the stock market double since pension reform, and yet its funding level has not improved at all. The state has a large budget deficit to overcome, and the General Assembly is farting out pro-labor bills as quickly as they can print those bills out on paper. I keep looking for some of our elected officials to exhibit leadership. I keep looking…,” added Block.
Rhode Island property taxes would be 25% lower were it not for the 'excessive' costs imposed on families and businesses for collectively bargained government services, according to a major report released today by the RI Center for Freedom & Prosperity.
"Our state cannot survive morally or economically with this unfair imbalance. At $888 for each Rhode Islander, a family of four is paying over $3500 annually for these overly-generous compensation deals," emphasized the Center's CEO, Mike Stenhouse. "We must find a more equitable balance between how much union members are paid and how much taxpayers can afford."
On Monday, RI General Treasurer issued a comprehensive report showing that the unfunded liability of local pension funds increased to $2.5 billion —up $100 million over the past year. The study issued by the Report of the Advisory Council for Locally Administered Pension Plans chaired by Magaziner identified 21 community plans that are underfunded by 40 percent or more.
Providence’s pension fund is only funded at 26 percent and has a shortfall of $1.356billion.
The two major public union legislative priorities are evergreen contracts and lowering the maximum number of hours a firefighter works before overtime kicks in from the federal standard of 53 hours to 42 hours.
The bills are strongly opposed by League of Cities and Towns who have been lobbying against the new initiatives saying that they are municipal budget busters. Both bills passed the Senate last week and are expected to land on Governor Gina Raimondo's desk.