Kerry King: RI Going Bankrupt Like Greece
Kerry King, Republican Candidate for General Treasurer
Kerry King: RI Going Bankrupt Like Greece
Like Greece, we have unsustainable borrowing that mortgages future generations to a lifetime of debt. There are huge unfunded liabilities (last count $10 billion plus) that are three times larger than our state revenue ($3 billion). Plus we have state and municipal debt totaling over $10 billion. So combined, our debt and unfunded liabilities are at least 7 times greater than our revenues. Perhaps the most important factor is that Public Employees Union contracts are bankrupting the state with their salaries, benefits, pensions and unproductive work rules. Had we not received the billion dollars in stimulus money last year from the Federal Government it is entirely possible we would have been the first state to go bankrupt.
Like Greece, our current political structure is built around servicing the people who put them in power. The Rhode Island Legislature is a wholly owned subsidiary of the Public Employees Union Bosses. They are the people who persuade their captives to pass laws that pay an extra 20% simply for working many years for the State, not to mention the laws that enable all of the other unions like the NEA to hold cities and towns hostages to wages, pensions and benefits that dwarf those available in the private sector.
At one time, unions brought their members from behind to equal status with private sector workers. But now the public sector has compensation well above the private sector placing great fiscal stress on the taxpayers of the State. Instead of making adjustments for the changing financial climate public sector union leadership have continued to ignore the cold, hard reality. Unless this changes, it is not a question of “if” only “when” the state will go bankrupt.
It is no secret that virtually every state is in deep financial trouble because of the Great Recession that has depleted virtually every source of revenue that a state relies on for funding. A recent article in Time Magazine points out just how bad things are and what is being done to remedy the situation around the country. Unfortunately, our Legislature had no real solutions to our current budget crisis and “balances” our latest budget with a built in $100 million hole.
Rhode Island is almost invariably the first to go into a recession and the last to come out of one. This is because we have continually robbed Peter to pay Paul…and the Peters are leaving the state for other places where taxes are low, government is smalland Public Sector unions don’t rule.
We never plan for the future. Politicians never want to make hard decisions when they can pass them off to future politicians. When we received our share of the tobacco settlement money, we promptly cashed it in for 50 cents on the dollar to balance the budget instead of spending it on health care as it was intended. We continue to pour all of our transportation fees into the General Fund instead of supporting our infrastructure and wonder why our roads and bridges are some of the worst in thenation. The lottery was sold to taxpayers as a solution to funding education, yet those revenues also end up in the General Fund and are spent for state jobs and benefits.
We are gamblers living from paycheck to paycheck and hoping to hit it big as we dig ourselves a deeper and deeper hole. It is time to stop digging. Rhode Island has only one solution. Its citizens need to vote in a new group of legislators and general officers committed to fiscal responsibility and reorganizing government. There are other things like consolidation of services that we need to face, but the voters need to first take back the state. If they don’t, it is entirely possible a judge, not the Legislature will be running the state in the not too distant future.
We should learn from Greece before it is too late. We need to end the red ink and Rebuild RI.