Chafee, left, and Cranston's Fung read Raimondo's report

Will this be the year Rhode Island fixes its pension system once and for all? The odds looked higher after General Treasurer Gina Raimondo’s big speech this afternoon.

It wasn’t so much the speech itself, a competently delivered overview of the pension problem that she paired with a call for lawmakers to act. It was the people who were in the room listening and, in many cases, nodding along with her.

Among them were Governor Chafee and many of his closest aides – Pat Rogers, Steve Hourahan, Richard Licht, Brian Daniels, Rosemary Booth Gallogly. Greater Providence Chamber of Commerce chief Laurie White was in attendance on behalf of the business community. Most notable of all was the presence of key union officials including the AFL-CIO’s George Nee and NEARI’s Robert Walsh.

In a conversation after the speech, Walsh sounded a decidedly conciliatory note, agreeing with Raimondo that the pension system faces a funding crisis and that a comprehensive solution is desirable. ”Everything is on the table,” he said. That doesn’t mean labor leaders will roll over and play dead – but they may be more willing to compromise than people realize.

And that’s where Chafee could play a critical role. Even if the governor isn’t the union toady of talk radio lore, he is someone labor trusts – “an honest broker,” in Walsh’s words. And Chafee’s aides have been at pains to argue he wants to see the pension problem solved in a thorough, equitable way. Perhaps this could be a “Nixon goes to China” moment for the independent governor.

Not everyone left the room happy. Cranston Mayor Allan Fung told me he found Raimondo’s study “disappointing” because it focused on pensions for state employees and teachers but not the troubled locally administered plans suffocating Cranston and other cities. (The report argues its lessons could apply to those, too.) And he worries the treasurer’s timeline for acting is “not expedient enough.”

That’s because those new actuarial forecasts Raimondo and the Retirement Board approved will take effect in July 2012 – and those new numbers are the real reason a pension overhaul is more likely than usual this year.

The sharply higher taxpayer contribution required under the new forecasts is a sword of Damocles pointed at government budgets from Woonsocket to Westerly. That means inaction could be just as painful as action – especially with 2012 being an election year.

Raimondo plans to convene a working group of experts who will craft actual legislation to fix the pension system in the coming months. If they don’t get the job done – and pension changes don’t get approved – during this calendar year, next winter’s budgeting will be a painful process for Fung and other local leaders. If they do, Rhode Islanders may get to put the pension issue to rest once and for all.

(photo: Ted Nesi/WPRI)