Licht, Fung dispute Raimondo’s take on local pension debateNovember 17th, 2011 at 6:00 am by Ted Nesi under Nesi's Notes
By Ted Nesi
PROVIDENCE, R.I. (WPRI) – Two officials who spent the summer working with Treasurer Gina Raimondo on the pension issue say she’s rewriting history in blaming them for the final legislation’s failure to make significant changes to the locally run pension plans.
Department of Administration Director Richard Licht and Cranston Mayor Allan Fung, both of whom served on the Chafee-Raimondo pension advisory group, said the treasurer didn’t tell them she thought the group’s work wouldn’t be rigorous enough for the final bill to include reforms of the 36 troubled municipal pension systems.
“I think that’s the worst excuse I’ve heard, because that was the point of me spending my entire summer with [former Auditor General] Ernie Almonte” working on those issues, Fung told WPRI.com. “The two of us were charged very specifically to review and analyze the very dire issues surrounding cities and towns.”
“I’m just laughing at that,” Fung said. “I basically wasted my breath at those meetings if that’s the case.” The mayor told WPRI.com the day he was appointed to the group that “the local piece has to be included” in the bill.
Need to ‘do their homework’
Raimondo has repeatedly blamed Chafee and the mayors for failing to “do their homework” by examining those plans and figuring out the best approach on them. Licht countered that their offices were collaborating on the pension bill, and it was only in September that Raimondo asked the governor’s office to write that portion of the bill.
“The treasurer’s office was taking responsibility for drafting the bill,” Licht said. “If they had told me from day one, or if they had told the governor, ‘OK, you’ve got to do the laboring on this,’ then I would have approached it differently. But that’s OK – they told us and we gladly took the assignment and did the best we could.”
“But the notion that we fell down on the job, I resent and I totally disagree with,” he said.
Gary Sasse, who served in former Gov. Don Carcieri’s administration and is now a consultant for the Providence City Council, said some of Raimondo’s concerns were valid, but she should have backed a revised proposal from Fung and Providence Mayor Angel Taveras that asked only for lawmakers’ support in freezing their plans’ COLAs with enabling legislation.
Raimondo has said the mayors can already take that step, but they say they’ve lost court battles over it in the past when they did so on their own. “They could do it themselves, but … the enabling legislation, it just gave them a little better defense,” Sasse said, adding that it wouldn’t have damaged the broader bill.
Raimondo’s team examined 36 plans
Fung said he spent “countless hours” over the summer working with the treasurer’s office as well as her outside consultant, the state’s actuary and Almonte studying the locally run pension plans and determining how the bill could help them. Fung and Almonte made presentations to the advisory group to share their findings.
The Cranston mayor did accept one of Raimondo’s criticisms – that his community has not conducted a recent experience study of its pension plan as the state did last winter – but said he held off on doing so because he didn’t want to have to spend the money twice if the legislation included specific requirements on that score.
Fung said the treasurer appeared to be looking for any excuse not to deal with the locally run plans in the legislation. “She’s throwing everything at us but the kitchen sink,” he said.
Licht said Chafee always told Raimondo and others that fixing the 36 locally run plans, which aren’t part of the state-managed Municipal Employees Retirement System (MERS), was a top priority for him, noting that the governor’s first budget included a proposal aimed at shoring them up.
Treasurer’s office split up work
An early September meeting was “the first time we were told that we had the drafting responsibility” on the locally run plans, Licht said. He then convened a working group including Department of Revenue Director Rosemary Booth Gallogly, Policy Director Brian Daniels and an outside attorney to write it.
At the same time, Senate President M. Teresa Paiva Weed expressed concern that not enough outreach had been done with police and fire union leaders. Chafee and his aides met with a number of them, including Paul Reed and Paul Valetta of the firefighters union, Licht said, though they didn’t come to any agreements.
Licht said a draft of the locally run plans language section of the bill was circulated by the governor’s office within two days of when the treasurer’s office distributed its own first draft of the rest of the legislation. The week before the bill’s mid-October introduction, the treasurer suggested a compromise approach close to what made it in, he said.
“It is a top priority of the governor – and mine – to address these plans,” Raimondo said during a briefing for reporters hours before she and the governor introduced the pension bill on Oct. 18. The non-MERS proposal “is a very aggressive schedule with teeth in it, because it’s an urgent problem and we need to have it fixed,” she said.
Laborers union fingered for change
But the compromise language – which include a cost-of-living adjustment (COLA) freeze if local leaders failed to come up with a way of fixing their plans – had disappeared from the bill by the time it reemerged for the joint finance committee’s vote last week, replaced with more limited language calling for a study commission.
Chafee suggested to WPRI.com on Monday that he thought Paiva Weed and her allies in the Laborers union killed the original locally run plans proposal with Raimondo’s acquiescence. Armand Sabitoni, the Laborers’ general secretary-treasurer and regional manager, served on Raimondo’s transition team.
Licht said Sabitoni and Senate Majority Leader Dominick Ruggerio “communicated to the governor … that this wasn’t the time to deal with the non-MERS plans,” particularly those affecting police and fire personnel, though Licht emphasized that Ruggerio “has been a supporter of statewide reform.”
Raimondo spokeswoman Joy Fox declined to respond to the charge directly. “It is not productive at this point to speculate as to why the General Assembly made adjustments to the bill in this area,” she told WPRI.com. “Let’s just get to work to fix the non-MERS problem.” The treasurer “will work with the mayors to fix their problem,” she said.
‘Momentary’ quarrel will pass
Despite the late-breaking brouhaha over the locally run plans, Licht said he thought any tension between the governor’s office and the treasurer’s was “momentary,” and said all four leaders – Chafee, Raimondo, Paiva Weed and House Speaker Gordon Fox – should be credited for shepherding through a major reform bill.
The governor plans to introduce legislation during the January special session that will address the locally run plans, Licht said.
“Political leaders have a right to disagreements and different views,” he said. “At the end of the day, this will pass, and we’re going to take the Senate president and others at their word that … they want to see something done on these plans in the spring, and we intend to present something for them to vote on.”
(photo: Ted Nesi/WPRI)