Rhode Island Pension Debate Sparks Statehouse Rallies
PROVIDENCE, R.I. -- Rhode Island's long-simmering pension fight reached a boiling point Wednesday as a business-backed group and public workers voiced opposing views on a major pension overhaul proposal in dueling Statehouse rallies.
Hundreds of workers and retirees gathered at the Statehouse to tell lawmakers the proposal would go back on years of promises to public workers. Hours later, hundreds of supporters of the plan cheered its authors, Treasurer Gina Raimondo and Gov. Lincoln Chafee.
Lawmakers are now reviewing the proposal, which would save $3 billion over a decade but would halt pension increases for retirees for a projected 19 years.
To reinforce one of the nation's weakest public pension systems, Raimondo and Chafee recommend creating a new pension system for current and future employees that would combine 401(k)-style accounts with traditional pensions. The plan would halt cost-of-living pension increases for most retirees for a projected 19 years and raise retirement ages. Workers would keep benefits they've already earned.
Angry public workers said it's unfair for them to bear the burden of bad promises made years ago and called on lawmakers to slow down their deliberations.
"Promises are meant to be kept," said Lisa Rattenni, 38, who works in a group home for developmentally disabled Rhode Islanders. "How do I keep my promises to the state of Rhode Island when they refuse to keep theirs?"
Rattenni, who attended the public employee rally, said she left the private sector because the state offered retirement security. Now she says she worries about how she'll pay for retirement.
Supporters of the proposal insisted that the state can't afford to honor all of its promises. Hundreds of them participated in a rally featuring Chafee and Raimondo that was organized by EngageRI, a group backed by the Greater Providence Chamber of Commerce.
Attorney Kas DeCarvalho said he worries runaway pension costs will swamp the state's governments and, eventually, its already struggling economy. He said the "sad truth" is that the state cannot fund both pension costs and public schools, roads and social services.
"Those promises that were made were made in good faith," he said. "But they were also made without a full understanding of what was being promised."
Both sides stayed mostly cordial in the tight Statehouse hallways. Supporters of the pension proposal held signs reading "Small Business Owner for Pension Reform" while opponents' signs criticized Raimondo and proclaimed that "RI is not Wisconsin," a reference to that state's recent debate over labor policy.
Supporters showed up during the public worker protest to unfurl a large banner in support of the plan. A few hours later, a handful of public workers remained to heckle supporters during their rally.
Raimondo, a Democrat, and Chafee, an independent, received loud applause when they addressed the supporters' rally. Raimondo told them that solving the pension puzzle won't be easy, but failure would prove to be much more damaging.
"We owe it to you to pass this bill," she told the crowd. "We owe it to one another to have well-funded and flourishing public schools. ... We will be sending a loud and clear signal across this nation."
The state's public retirement system faces an unfunded liability of more than $7 billion – nearly as much as an entire state budget for one year. Pension costs for taxpayers are set to double next year to more than $600 million.
The pension system covers 66,000 active and retired public teachers, state employees, judges and police and firefighters. Fifty-eight percent of retired teachers and 48 percent of retired state workers receive more money in their pensions than they did in their final years of work.
Legislative hearings on the bill continue on Thursday. A vote is not expected for a few weeks.