Unions to RI: Negotiate a pension deal before you lose in court

February 7th, 2012 at 1:37 pm by under Nesi's Notes, On the Main Site

From Smith Hill to Providence and Pawtucket, government lawyers have been batting zero in their efforts to convince Rhode Island judges to uphold changes to public-sector workers’ retirement benefits.

That’s why the four state leaders who pushed through the new pension law should start formal negotiations with union leaders on an alternative overhaul of the system before they lose in court, according to Bob Walsh of the National Education Association Rhode Island.

“The legislative victory that the folks who supported changes in the pension system achieved is going to be short-lived – because it was illegal,” Walsh told WPRI.com on Tuesday. He suggested state leaders should appoint a neutral mediator such as former R.I. Supreme Court Chief Justice Frank Williams to start talks between the two sides.

The unions haven’t filed an injunction to block the new law from taking effect because it won’t impact active workers until July 1 or retirees until Jan. 1, when they miss their first cost-of-living adjustment, Walsh said. Superior Court Judge Sarah Taft-Carter already gave the unions a first-round victory last fall in an existing suit challenging earlier pension cutbacks.

Labor ‘realists’ will OK changes

Other states made less dramatic pension changes recently, including a 30-year refinancing of Massachusetts’ unfunded liability and a decision by Connecticut last month to hike its yearly pension fund deposits.

“The realists among labor leadership understand changes have to occur [in the pension system],” Walsh said. “I don’t necessarily believe that our successful efforts in court will lead to a judge saying, ‘Put everything back the way it was.’”

“I believe that our successful efforts in court will lead a judge to say, ‘The legislature went too far. They need to come up with a plan that doesn’t go too far, because there were more reasonable, less egregious alternatives,’” he said.

What would those more reasonable alternatives look like? Walsh, who served on the Chafee-Raimondo pension advisory group, give a strong hint in an op-ed last October, including a capped, inflation-indexed COLA for all retirees. He and other labor officials also offered extensive testimony about their views during an Oct. 26 joint finance committee hearing.

Chafee worried about a loss

Raimondo has repeatedly expressed confidence that the whole pension law will stand up in court, although she told WPRI.com last month she worries about the alternative. Chafee has expressed more concern; his administration considered putting money in escrow as part of the 2012-13 budget in case it loses but opted not to.

“You have to put your best legal case forward and try and win,” the governor said on WPRI 12′s “Newsmakers” last week. He added: “Certainly that does not help our court case, if you have escrow money. So we’re in a rock and a hard place. These are real issues.”

Walsh said the public debate was “too inflamed” against labor last fall for a discussion of a negotiated deal in Rhode Island.

“This was the weapons-of-mass-destruction approach – the public was convinced by Engage Rhode Island and The Providence Journal that the unfunded liability was a weapon of mass destruction, and the politicians herded behind that message and thought there was no alternative,” he said.

Retirees, workers will both sue

Now Walsh wants one or more of the quartet behind the pension law – Chafee, Raimondo, House Speaker Gordon Fox and Senate President M. Teresa Paiva Weed – to step forward and kick off serious discussions with the unions on a compromise before a judge acts.

“Real political courage will be sitting down with us and working this out,” he said. “It took absolutely no courage to vote with the trend last year. … Real political courage is [for lawmakers] to go to their leadership and say, ‘Hey, the unions told us the truth – they have a good story to tell in court. Let’s sit down with them and work it out or the state’s going to lose.’”

On the legal front, Walsh said the unions have teams of lawyers working on the “planning and coordination with these fairly massive lawsuits that will have to be filed” to challenge the pension law. Retirees and current workers will need to file separate suits, and national groups will likely provide support, he said.

Officials in Providence have noted repeatedly that unions cannot negotiate for retirees. That holds true at the state level, as well, Walsh said, but if union leaders reach what they consider to be a reasonable deal with state officials they will push retirees to accept it and withhold financial support from any further challenges.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

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27 Responses to “Unions to RI: Negotiate a pension deal before you lose in court”

  1. Mr. Fish says:

    finally someone who is making sense.

  2. Betsy says:

    Clueless union leaders, let the deck of cards fall. It started with Central Falls and will continue with Providence, Woonsocket and West Warwick. Let it all fall down…and then their members will get pennies on the dollar.

    1. Whirwin says:

      Betsy, Providence isn’t CF, and if you think Chapter 9 is a good thing, it is you who is clueless…

      1. Ed says:

        Whirwin, That is correct chapter 9 is not a good thing. But it is better than the deal that the elected made with the unions. Once Providence goes chapter 9, there is nothing to stop Pawtucket, Cranston, West Warwick, Woonsockett, East Providence, North Providence, Johnston and Westerly. Once these over generous contracts are ended it is time not renew any of them and fire all these public sector employees and hire new people. No one is entitled to a job for life. Let all public sector employees including public school teachers know the pain those of us who work in the private sector endure.

      2. Ted Nesi says:

        States can’t file for bankruptcy under federal law, regardless.

      3. westerly says:

        “Once Providence goes chapter 9, there is nothing to stop Pawtucket, Cranston, West Warwick, Woonsockett, East Providence, North Providence, Johnston and Westerly”

        Why add Westerly to that list? Our bond rating just went up, we’re about the only town that isn’t bankrupt in this state.

  3. tonym says:

    im wondering if all these employees who don’t want their pension touched will agree to have it based on what they started at, instead of what they retired making . my rational is ”hey you cant change the rules that i agreed to so i guess its ok to cut my salary to its original ”signed on for” rate. how do you think that would go in negotiations lol?

  4. Scott says says:

    Bob Walsh wants to remortgage the whole pension fund. This state has borrowed money for every DOT project in the state, where has that brought us to, a 454 million bill. And now there are five referendum questions to borrow another 200+ million come November. I belong to a private union in the building trades and we are correcting are own problem by putting our money to fix it, with no help from you, Mr. Walsh. So I have no more to give to you cause.

    1. Mr. Fish says:

      Um, no. another Projo reader.

  5. Cranstonres says:

    I didn’t know Raimondo was a lawyer now too. This was completely illegal and the state will pay a ton of money back, but most of the dirty politicians that passed it will be re-elected by then and they can say well we tried. Most of these guys are lawyers, they know it’s illegal, it was all about re-election or allegance to Fox (who it doesn’t even affect because his ward is in a private pension) If they were smart, they should have negotiated increased contributions to the pension, mandate cities and towns to pay their share, NEGOTIATE to suspend the COLA’s until the fund is stable and NEGOTIATE longer years of service, i’m sure everyone would have chipped in to fix the problem. Now the state will lose, the workers will win and the state will pay all the back pay, benefits, etc

  6. stevehawk85 says:

    Really i agree this was completely illegal..

  7. Jake says:

    All he seems to be saying is that since the courts will probably rule the whole thing illegal, it is better to fix it now. Since trying to come up with a compromise costs nothing, and litigation itself and losing the lawsuit will cost a fortune, what is the harm in trying?

  8. robert benson says:

    If the state and its cities and towns lose in court, the state’s citizens will have no alternative but armed rebellion. Just as the original colonists fought against King George when he was oppressing them financially, Rhode Islanders will rise up and fight to throw public employee unions out of state government before there is nothing left of this state and its cities.

    These public employee unions are their own worst enemy. They refuse to sacrifice in a time of economic disaster. What is worse is that this economic disaster was caused by these greedy union bosses. Don’t blame the union workers, they’ve been lied to and mismanaged by bosses whose mantra is More, More More!

    1. Marko says:

      Mr. Benson:

      I don’t think the Unions and the retiree’s understand a normal taxpayers plight and I KNOW THEY DO NOT KNOW THE LEVEL OF ANGER WE HAVE.

      You are correct…….there will be blood in the streets over this. I just pray, the Unions and Retirees will understand this is not against them, but against the Officials that have gotten us into this mess. Most has since passed away.

      WE WILL NOT SIT BACK AND HAVE MONEY TAKEN TO GIVE IT TO THE HAVES FROM THE HAVE NOT’s. THERE ARE MORE OF US “HAVE NOT’s” HERE WHO ARE ANGRY….VERY ANGRY!

      1. Dave P says:

        These comments are really getting scary!!! We live in a civilized society and we all must abide by the Courts decisions. Talk about “armed rebellion” and “blood in the streets” is insane.

    2. Abner says:

      Uh oh, Marko and Bobby Benson are fixin to start slaying people. Couple of armchair tough guys. Go for it ladies…..

  9. Govstench says:

    This is high stakes poker game being put on the legislature by the unions. The biggest mistake this state made was to allow the unions in. Now they have “taken over” and telling the government what to do. Do we a problem here people? Perhaps the legislature needs to revisit these union laws and start repealing them. Maybe that will wake these people up.

    1. bunchoffools says:

      Yes there is a problem here. FDR…possibly the greatest friend of labor actually warned against governments allowing collective bargaining with labor unions for these all all the other reasons that RI is experiencing now.

      Unions and collective bargaining have a place and value when dealing with private profit generating business, not governments.

  10. [...] 13. RHODE ISLAND NEWS: “Unions to RI: Negotiate a pension deal before you lose in court,” by Ted Nesi (WPRI Channel 12 [Providence] News blog, Feb. 7, 2012). blogs.wpri.com… [...]

  11. Whirwin says:

    “Unions” to Rhode Island, Ted? sounds like it was just Bob Walsh talking. You make it sound like they all got together and issued a press release. Wouldn’t be trying to inflame the issue, would you?

    1. Ted Nesi says:

      Good headline writing is an art, Whirwin. What makes you think Walsh is off the reservation from the other unions?

      1. Whirwin says:

        What makes you think “the other unions” agree with the statement, and appointed Bob Walsh as their spokesman? It is entirely possible that “other unions” would rather let them lose in court first, then negotiate. Still others may be against negotiations altogether. “Good” headline writing may be an art, but it’s not “good” if it’s not accurate. And it’s not accurate if you’re attributing a statement made by one person to multiple organizations.

      2. Ted Nesi says:

        Do you have any first-hand knowledge, Whirwin? Which of the other unions do you think may feel that way?

      3. Whirwin says:

        No I don’t have any firsthand knowledge, nor did I ever indicate I did. And I have no idea how the other unions feel. The point is, your headline indicates they all share one opinion, and have conveyed that opinion to the state. But the article only contains information about Bob Walsh’s opinion. And I’m saying it’s inaccurate and misleading to attribute a statement to “unions” when it is actually Bob Walsh’s statement, and “other unions” could very well have a different opinion. There may even be others in Walsh’s own union who don’t agree with the statement.

  12. Firejerk1 says:

    “Once these over generous contracts are ended it is time not renew any of them and fire all these public sector employees and hire new people. No one is entitled to a job for life.”

    So tell me Ed, where will you find qualified (and more importantly LICENSED) Emergency Medical Technicians to staff the ALS Rescues that respond to medical emergencies on a daily basis? Are you going to step into the vacant slot with your license? Will you fast track all of the physicals, psychological tests, licenses, and just plain knowledge and experience out of thin air?

    Do you know how to operate the pump on a fire pumper, or operate the turntable on a ladder truck? Can you fill Self Contained Breathing Apparatus tanks from a cascade system? Do you know the streets, and districts proficiently enough to respond to emergencies without delay?

    Sometimes it’s better to keep one’s opinion to oneself as to not make yourself look and sound like a complete ass, especially when it’s about subject matter you clearly don’t understand.

  13. bunchoffools says:

    The politicians and union leaders are just as culpable for this mess. The deals struck in the first place were ridiculous. Then both failed when they stopped funding the plans sufficiently. The politicians instead spent the money on more politically attractive projects and the unions were asleep a the wheel when they didn’t raise a concern about this then. This whole mess is a good reason why the govermnent should not be involved in collective bargaining with unions…the government is not a business. Collective bargaining takes the decisions about how to spend tax money out of the hands of the tax payors.

    And there have to be concerns esp in a state a small as RI…who knows who and when in those negotiations who is the politician and the union leader really working for?

    The whole idea of pensions needs to be looked at…the governement needs to look more closely at 401k style retirement plans and not guaranteed pensions. There is no way to know the future so it is silly to offer an income for life to anyone let alone with compounded colas.

    It is frustrating to hear all these plans to get more money out of business and tax payors etc, but no real talk of reform.

  14. Vincent Sheehan says:

    From:Vincent Sheehan

    Retired Providence Firefighter,accidental disablity pension 12/27,1979

    Letter about court ruling 1-31-2012

    Please,, the former mayors have given away everything so they can get the votes. If you spent 30-40 years on the fire or police depts, and were told that each week the city matched your 9-10% of your pay to go to your pension, then you find out they haven’t done it for 50 years, WHO is at fault.??? When I signed my papers the who pays what were laid out where the city and myself and the controllers office wittness. It stated:
    “This pension carries benifets of 66 & 2/3s to the injured Firefighter and family health coverage for the life of the injured, all at city of prov expense, payable thru the retirement clause and in all the contracts, including but not limited to CBA agreements.
    People who get contracts thru CBa’s are held to strict guidelines by law. People who sign CBA’s are being held to the same standard. Whether they are elected officials of a Union or the City, or a Judge. The law is just that, the law.
    Please look at ” ARENA vs Prov Pension ” in early 1990′s the judge after years of work and searching found that even though the fire and police were getting 3%, the MAYOR ordered the 5 & 6% cola’s in by exectuive order, (my understanding of that time) I had no clue what was going on because of my injuries and the damm drugs I had to take.I started to receive 5% several years later. The City of Prov also states that no retire will pay more than $400.00 deductible per year, well last year I paid $976.00 and my wifes was 812.00 so where is this $400.00 come from.?? Read the pension guidelines. These are laws, because without the laws, the contracts would be voided.
    My 1st check in 1980 was for $824.00 per month for the next 3 years before the cola kicked in.
    On 1-30-2012 the judge in the latest go around with the city of providence sided for the plantif,the fire and police, stating that a contracts were in place all the time and the rule of law was clearly on their side. If people keep playing games electing the same people every year and expect a different result are not realizing what they are doing, Please stop electing pupputs and put people in these important positions that will reflect your well-being and your voice. These contracts are public info anyone can view them under the foia that is federally ordered. Look at the years and timming to elections and SUPRISE they seemed match the years that all is well with everthing,how can elected officials blow that much smoke and people believe it.They claim to be unaware of their own actions.What happened to the ” rainny Day fund that showed a large balance before mayor Travers took over.? When people see this, what do they do ? they promote them to congress and other places.Fire and police work hard for the monies they earn, and yes I am a retired firefighter who retired with a broken back.Between injury and surgery I spent 3 month in bed with very little movement, and the next 1 & 12 years getting to walk without crutches or a cane. The swelling on my spine took 3 months to reduce enough to operate. I have lost my left kidney to cancer, and 2 other cancers in bladder with surgery. Had chemo and all the “goodies” for cancer. I had 2 heart attacks as well. Here I am at 66 years old and feel like 102 and feel like the begger at a corner looking for a hand out, no I just want what was promised in writting and fairly due me, my family deserves that at least for service to the city and the loss of earnings I could have made.I currently get Medicare and I pay for part B, as do other Fire/police retiree’s. REMEMBER fire and police do not pay social security tax’s due to private pension. I worked enough in the 60′s to get my quarters in so I started getting S/S. My 1st check was for S/S was $ 111.00 and no cola’s for last 2 years , so now you might understand why this issue has pushed me to write this. If you want to screw someone at least have the #^%@’s to tell them up front, not after all these years.I have to live on 3 small checks every month my S/S, my city check pension and my wifes small S/S check. Together they don’t total what is set aside for a cleark in city hall . I have a very strict budget. By the way I pay for medicare, so I really feel screwed by the city of providence. If the mayor or anyone in power has anything say,say it to my face and stop this behind closed doors and behind my back bull-shit. Sit down with the concerned people and talk out the problem, stop screaming “chapter 9 ” thats like screaming fire in a crowded theater. After awhile no one listens’no lisnens.!!! The Mayor his council (legal) and retires should sit down with the Union lawyer and stay at the table until a reasonable agreement is found. My personal feeling is that the Mayor and or the Gov. wants Providence to go into chap #9, well if that is what they want then all this was for nothing and we might as well move back to the caves and start all over again. Maybe in 10,000 years we will be civilized enough to sit and talk rather than scream, and act like kids in a schoolyard. I’ll take my ball back to my cave. Let me know where and when and I’ll be at any meeting the have. I told the girl at the R.W.Casinio when we were there for the medicare thing, that, I see you in court before I let that happen, well, been there done that. NOW WHAT….

    V.S.