The Economist magazine on ‘desperate times’ in Rhode IslandMay 3rd, 2012 at 12:46 pm by Ted Nesi under Nesi's Notes, On the Main Site
The last time the tart-tongued British weekly The Economist wrote a major story about Rhode Island, in 2009, the headline was “Little Rhody in the red” and the focus was on the state’s “mammoth economic problems.”
Well, The Economist is back – and this time the focus is on the public-sector finance crisis roiling cities and towns across the state. “Improvident,” the headline declares. “Desperate measures for desperate times.”
Here’s an excerpt from the article (no byline, natch):
IT WOULD be something of an overstatement, explains Angel Taveras, the mayor of Providence, Rhode Island’s capital, to call the measures he signed this week a “strategy” for dealing with the city’s financial troubles. He and the city council are simply facing reality, he says. The city was projected to run a deficit of $110m this year. Despite shedding jobs, cutting pay, trimming benefits, curbing services and expanding the tax base (on top of an 11% tax rise last year), Providence still faced a shortfall of $21m or so. There was no way to set its finances to rights without tackling the city’s huge pension costs.
Political observers will undoubtedly also note this is the first national or international article about the state’s finances in quite a while that makes no mention of Treasurer Gina Raimondo. Also, hard as it may be to believe, The Economist actually overstates the health of Providence’s pension system; it’s only 32% funded.