The Saturday Morning Post: Quick hits on politics & more in RI

February 15th, 2014 at 5:00 am by under Nesi's Notes, On the Main Site, The Saturday Morning Post

Happy Saturday! Here’s another edition of my weekend column – as always, send your takes, tips and trial balloons to tnesi@wpri.com. For quick hits all week long, follow @tednesi.

1. How much should Rhode Island pay for lawsuit insurance? That’s one way to look at the proposed pension settlement finally unveiled Friday afternoon: by giving back $232 million of the taxpayer savings from the 2011 overhaul, the General Assembly can lock in the remainder – $3.9 billion. We’re thus talking about the difference between a 46% decrease in Rhode Island’s unfunded pension liability and a 43% decrease in the unfunded liability – measurable but not major. In most cases, lawmakers would gladly grab 94% of what they originally sought and declare victory. But this isn’t most cases. For Senate President Teresa Paiva Weed and others, getting told by Gina Raimondo for the second time in three years that they need to pass the treasurer’s unchangeable pension proposal is tough to swallow. There’s also the broader constitutional question, emphasized by House Minority Leader Brian Newberry and others, of whether the legislature has the right to alter pension benefits; passing a settlement leaves that unanswered. Still, if the unions had called senior state leaders in early 2011 and said, “Hey, we have a proposal we’ll back to slash the unfunded pension liability by more than 40% without a legal fight,” they probably would have jumped at the chance. Will they really say no to it now?

2. Of course, that’s assuming the proposed settlement doesn’t get torpedoed by workers and retirees before the General Assembly even takes it up. The flip side of Raimondo and Governor Chafee locking in 94% of the 2011 pension law’s savings is that the unions would only get back about 6% of what they lost when it passed, at least as measured by the unfunded liability. After the hot rhetoric of the past few years, it may shock the rank and file to see they’d get so little out of a settlement their leaders have already approved. “Our unions actually voted for this settlement?” Providence’s Candace McCall wrote on Twitter. “I’ll be there to help vote it DOWN!!!!!” She added: “This pension settlement is a disgrace. I didn’t pay in 9.5% of my pay for thirty years for this! Unions screwed up! … Let’s go to court!” It will be interesting to see how many others agree with McCall. Then again, should Rhode Island’s workers and retirees accept this to avoid the possibility of an adverse legal outcome that could set a precedent for pensioners coast to coast?

3. Under the terms of the settlement, the pension funds for state employees and teachers would reach the crucial 80% funding level when full annual COLAs are restored in 2031, or 17 years from now.

4. Back in September, Angel Taveras released a Democratic primary poll giving him a 19-point lead over Gina Raimondo. Now, five months later, WPRI 12 and The Providence Journal have released a poll that has Taveras just four points ahead of Raimondo. The partisan split in the two surveys was nearly identical – about 60/40 Democrats to independents – so what changed? Clay Pell, who captured 15% of the vote in our WPRI/Journal poll. Subtracting that 15% from Taveras’s 19-point September lead gives you the mayor’s lead today: four points. As Tim White quipped after the poll results were released, so far it looks like Gina Raimondo should be sending Clay Pell a fruit basket to thank him for getting into the race. Indeed, support for the treasurer is actually slightly lower in the new WPRI/Journal poll (27%) than it was in the September Taveras poll (30%) even though the intervening period saw Raimondo kick off her campaign. This has all the makings of a fierce primary.

5. So that’s the bad news for Taveras. The good news: the guy is really, really popular with Democratic primary voters. The mayor’s favorable rating is a stellar 68%, and his job approval rating is 58%. His favorable rating is at or above 70% with some key groups: union households, self-identified Democrats, women, and 40- to 59-year-olds. Those are enviable numbers for a first-term officeholder who has one of the toughest jobs in Rhode Island politics, and it suggests Taveras has plenty of room to increase his primary support beyond its current level of 31%. But it also puts a real target on his back: if the other two candidates want to win, they’re going to want to pull down the mayor’s popularity.

6. Most of the WPRI/Journal poll findings were unsurprising – which doesn’t make them uninteresting. (It’s always valuable to find out if our assumptions track measured reality.) One statistic that did surprise me, though, was Clay Pell’s unfavorable rating among Democratic primary voters: 21%, almost as high as Raimondo’s (24%) and a tick higher than Taveras’s (20%). Among both men and independents, Pell’s unfavorable rating is already 24%. Those numbers are higher than you might expect for someone who’s been on the political scene for barely a few months. Of course, Pell’s “don’t know” rating is much higher than those of the other two, at 41% – but since he’s already tying his rivals on the unfavorable side of the ledger, it’s incumbent on Pell to make a positive impression with those voters who are still forming an opinion about him.

7. Taveras is beating Raimondo among every subgroup of Democratic primary voters except two: independents and those ages 60 and up. Clay Pell is in third place with every subgroup of voters except one: those in public-sector union households, where he has 19% support while Raimondo has 17%.

8. A fascinating long read: Richard Reeves on the future of marriage in America.

9. Our weekly Saturday Morning Post dispatch from WPRI.com reporter Dan McGowan: “If there’s a major happening in Rhode Island government these days, it’s a safe bet to assume Ray Sullivan is involved. Sullivan, a former deputy House majority leader who led the effort to pass a same-sex marriage law in the state last year before joining Checkmate Consulting as a partner, played a behind-the-scenes public-relations role for organized labor leading up to Friday’s big pension settlement announcement. Sullivan said his firm was retained to ‘assist public employees, teachers and retiree coalitions in communicating with their members’ and indicated that relationship will continue in the coming months as union members and retirees prepare to vote on the deal. Sullivan did not wish to discuss how much Checkmate Consulting was paid or how much information about the settlement he received prior to a court-ordered confidentiality agreement being lifted, but said the firm had been helping with ‘planning behind the scenes for months.’ Separately, Checkmate Consulting helped coordinate the campaign kickoff for Democratic gubernatorial candidate and labor favorite Clay Pell last month; Sullivan said he did not coordinate with the Pell campaign for the pension settlement. Earlier this week, when it appeared as though the settlement talks had blown up, Pell criticized the mediation process for being ‘shrouded in secrecy.’”

10. Speaking of McGowan, if you missed his story on Buddy Cianci running for mayor again, go read it now.

11. Ian Prior, who was Brendan Doherty’s 2012 campaign manager and is now a National Republican Congressional Committee spokesman, endorsed Ken Block in the Republican primary for governor this week, as did Marion O’Brien, who handled Doherty’s outreach to seniors in 2012. On its own this wouldn’t be particularly noteworthy, since Prior and O’Brien aren’t exactly household names. But when you combine their decisions with three other developments in recent weeks – John Robitaille hinting the GOP should give Block a look, Tony Bucci signing on as Block’s finance director, and Mike Napolitano becoming Block’s director of operations – it’s a sign the newly minted Republican is making inroads with the Carcieri/Doherty wing of the local GOP. That doesn’t mean Block is going to win the Republican nomination. But it does suggest he has a serious shot at it, and a risk for Allan Fung.

12. More GOP news: National Review named Dawson Hodgson one of its AG candidates to watch.

13. A bonus Saturday Morning Post dispatch from WPRI.com ace Dan McGowan: “With a slight lead in the early polls and the best job approval rating of any elected official in the state, it’s not a surprise that Angel Taveras says he isn’t concerned about Clay Pell pulling votes away from him in the Democratic gubernatorial primary. But that doesn’t mean several supporters – and even some opponents – don’t wish the mayor would change his mind and stay to help fully solve the problems he inherited in Providence. Paul Doughty, president for the city’s firefighters union, said he tried to nudge Taveras into staying on another term in Providence, in part because he’s worried about the transition to a new mayor. ‘He brought us out of bankruptcy, there’s no question in my mind,’ Doughty said following Taveras’s State of the City address this week. In January, state Rep. John Carnvevale, who co-chairs the Providence delegation on Smith Hill, said he’s backing Pell for governor, but would fully support Taveras if he were staying put. City Councilman Luis Aponte, who has clashed with Taveras for three years and is backing Treasurer Gina Raimondo for governor, said he too wishes the mayor would stick around for another term. ‘He took over the city at a very difficult time and slowed the path into bankruptcy and I think we’ve absolutely moved in the right direction,’ Aponte said. ‘He’s made strategic investments and I think overall he’s been a good mayor.’”

14. Stonehill College’s Peter Ubertaccio suggests Fall River and New Bedford should rethink their multi-decade effort to get commuter rail service extended there. Worth pondering.

15. John Arnold, the Enron alum and hedge-fund billionaire who’s become controversial in Rhode Island for backing Engage RI and American LeadHERship, is becoming to defenders of public-sector pensions what Pete Peterson represents to deficit doves. The liberal writer David Sirota took aim at Arnold twice this week, first for his political activism and then for his funding of a PBS series on pensions; the latter story was quickly labeled “a very important scoop” by Reuters’ influential Felix Salmon, and by Friday afternoon PBS was giving back the money.

16. My guests on Executive Suite this week are Amber Caulkins, who’s overseeing Rhode Island’s new College and University Research Collaborative, and Joe Morone, CEO of Footnote, a Boston startup that translates academic research into general-audience-friendly articles. The collaborative was created last year’s by the state’s 11 schools of higher ed with the financial support of The Rhode Island Foundation and the then-EDC (now Commerce RI) to help policymakers get good information about the challenges they face. (Insert your own joke about the General Assembly here.) The first effort is a cool example of what they have in mind, from Bryant’s Ed Tebaldi: “Manufacturing, Innovation, & Economic Growth: Challenges For Rhode Island And The Country.” Check it out – it’s not as dry as the title sounds, and even features this terrific chart. The most striking statistic in Telbadi’s piece was this: “According to my analysis of data from the U.S. Bureau of Labor Statistics, it led the country in manufacturing job loss from January 2000 to January 2013, with 44% of manufacturing jobs in the state evaporating over that period.” The rest of the country lost 31%.

17. I joined Rhode Island PBS for this week’s edition of “A Lively Experiment,” along with Scott MacKay, Wendy Schiller and Dave Layman. No surprise: the conversation was dominated by Campaign 2014 – especially the new WPRI/Projo poll – and pensions. Watch tonight at 7 p.m. on WSBE Learn (Ch. 36.2), Sunday at noon on WSBE-TV (Ch. 36.1) or online at the RI PBS blog.

18. If you missed them the first time around, now’s your chance to check out some of the items we published this week: the latest NECAP results were a mixed bag … Chafee made an undisclosed trip to Texas during the pension talks … Taveras highlighted progress in his State of the City speech … and a Sony executive unloaded on Rhode Island politicians over 38 Studios.

19. Set your DVRs: This week on Newsmakers – Congressman Joe Kennedy III. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive SuiteAmber Caulkins, program director at the College and University Research Collaborative, and Joe Morone, CEO of Footnote. Watch Saturday at 10:30 p.m. or Sunday at 6 p.m. on myRITV (or Sunday at 6 a.m. on Fox). See you back here next Saturday morning.

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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23 Responses to “The Saturday Morning Post: Quick hits on politics & more in RI”

  1. Snow says:

    The problem is the settlement itself. Aside from the fact that it is a big lose for workers, it doesn’t settle the question. I would rather chance losing everything, and get some legal closure from the courts. As it stands, the General Assmbley could confiscate the entire COLA, for example, in 17 years when it comes back–nothing could stop them. Because I’m newly retired, the new proposed multiplier of 2% per year doesn’t affect me directly, but I can’t understand why workers would agree to pay 11% to get back less than they accrued at 9.5%, when there is the real possibility that GA could tamper with their benefits in the future.

  2. Snow says:

    Thanks for including my Tweet. What I’ve lost in pension accruals, I’m gaining in Twitter followers!

  3. Lost in ri says:

    Anybody who thinks this is the last change to the
    Pension is probably mistaken.

    A few bad years of the stock market, state budget
    Tightens up, there will be more changes.

    1. j m paras says:

      In a Sept. 12, 2013 article in Pro Jo, entitled “Audit suggests state lower expectations on returns,” Randal Edgar wrote about audit of the pension fund that indicated it may well be necessary to lower the anticipated rate of return from 7.5% to 7% due to the Treasurer’s inability to achieve the present rate of return with her investments. He wrote, “Raimondo said the impact on the taxpayers and the pension system’s unfunded liability–the difference between the plan’s assets and its promises to employees and retirees–would depend on the size of the reduction, but she acknowledged, it could be big.” There is no guarantee that this will NOT happen, and if we all agree to this settlement, we will not be able to turn to the courts.
      You are correct, Lost in ri!

  4. Snow says:

    Absolutely spot on–the COLA will never return. Vote this disgrace down.

  5. Bea says:

    Vote Caprio for Treasurer –
    hopefully he can begin to restore what is left of our Pension Fund after Gina is through destroying it.
    Also, Taveras has a better fund return than Gina and is in the process of backing out of hedge funds.

    1. There was an article in the East Bay Phoenix, EBayri.com written by Arlene Violet everyone should read this article about Ernest Almonte, Violet called him a Warrior, a must read.

      1. Mr. Poultry says:

        Ask Almonte about his recent stint on the Urban League board.

  6. Phil says:

    I don’t see why Bob Walsh wants Clay in there. His arch nemesis seems to have a much better shot of the nomination with him in it.

    In regards to Block, while he may be getting these token supporters, the over-riding issue is no one trusts him.

    1. Paul says:

      You know, I was going to give Block a chance because I like the idea of someone slashing spending, but he’s so weak on so many issues. And I agree with Phil, I just don’t trust him. I can just see him doing a Chaffee-esque switch to bring the moderate party back.

  7. Ace In The Car says:

    Anyone in the state pension system with less than 10 years of service as of June 30, 2012 would be crazy to approve the proposed settlement. In effect, these “participants” receive nothing from the settlement. Their pension plan is the same as it was prior to the settlement and they receive no guarantee that the pension will not be altered in the future, to their detriment, when the next budget crisis comes along (Massachusetts casino gaming, for example). Why on earth would these individuals vote to approve the settlement?

    The union negotiators, most of if not all of whom have at least 20 years in the system, took care of themselves and the groups most closely affiliated with them in terms of years of service and did nothing for the newer employees, except of course to continue to extract union dues from them.

    The only plus side to the Treasurer’s pension “reform” from these employees perspective is that the amount contributed to their 401(a) accounts can’t be stolen from them in the future when pension benefits are cut again and their contribution rate is left unchanged (or conversely, their contribution rate is increased and their pension benefit is unchanged).

    1. Ace In The Car says:

      Well, I was right. Any retirement system member with less than ten years of service would be crazy to vote yes for the pension settlement. That is why they will not be getting to vote on it. Retirement system members who are members of a union should ask their union leadership why it is they aren’t being represented by leadership and aren’t allowed a vote on the proposed settlement but still have to pay dues to support the same leadership. Time for a change at the top if you ask me.

      1. Tradita says:

        Ace, It does not seem fair that any contributing member of the pension system is to be denied a vote on the settlement. Even if you have less than ten years of service, you are still contributing payroll deductions into the pension fund. This settlement vote is beginning to sound rigged against those who would vote NO.

  8. TLAW says:

    Politics, envy,and emotions aside, the initial 3% compounded COLA was excessive and mirrored the excessiveness of our society’s institutions: Banks, Corporations, Labor, Politicians. It had to be changed.

    The legal principles that apply to the COLA issue are clear: 1) State pensions are a contract. The word contract even exists in the pension statute.
    2) Contracts cannot be retroactively changed unless there has been a material change in the conditions of the contract. 3) RI’s legislature decided in the 80′s not to match the obligatory employees’ contribution. 4) RI’s budget has grown to over 8 billion to fund legislatively approved programs. 5) State government has not sold one asset, one parcel of land, even as a token retro contribution in amends. 6) Even if there was a fiscal problem, a total elimination/suspension of COLA constitutes more than a significant reduction and will not be sustained by the courts. 7) The proposed settlement favors current state workers with over 20 years of service and only current workers are eligible to vote for the re-election of union officers, not retirees. 8) To prevail in court, the state would need to show clean hands, i.e., it took all reasonable interim steps prior to the total elimination of COLAs. It did not.

    Judges did not have their pensions/COLAs affected because the legislature directly funds 100% of judges (former legislators) pensions. Equal treatment of state employees? NO!

    The mediation and court processes are just a long term stall tactic by union leaders in bed with the legislators and politicians to keep the fiscal status
    quo that benefits them. Why? Because they know that groups of retired state workers have been formed, have been preparing for that moment when there is the passage of a reform of the pension reform, or a definitive trial date to press for just COLA issue resolution.

    The COLA issue is not one of fact requiring an expensive protracted trial. Rather, it is a legal issue: Can vested contractually based COLAs be
    totally eliminated? To what extent can they be reduced that will not be more than a significant reduction. (The ans. is easy. Just apply the understated CPI index.)

    A dozen years down the road when the average retirees age at the time of the passage of the reform two years ago reaches 84, most will be deceased and I can hear politicians and labor leaders finally saying, now we can make amends.

  9. Tradita says:

    This settlement offers retirees a one-time $500 payment in exchange for their being “…forever and completely barred from ever asserting any claims…” in court in the future, on these challenges to pension reform.

    After that initial $500, IMO retirees will never see another inflation adjustment. While this settlement allows for the possibility of future “cola’s”, it does not guarantee them. Withholding legal implied-contract cola’s from retirees is the equivalent of a tax on the elderly that rises with the rate of inflation. This “inflation tax” will be used to pay Wall Street hedge fund fees.

    Further, the settlement does not address whether or not it is constitutional to alter the pensions of those who are already retired. So this settlement will open the door for the state to make future changes in pension laws and further reduce retiree benefits, while at the same time closing the door to court challenges.

    This settlement does not guarantee the general assembly will work to help the pension fund recover from their past mismanagement. In fact, the GA tried last year to repeal RIGL 35-6-1(d), which says any state surpluses must be transferred to the pension fund. If we couldn’t trust them before, why would we trust them now?

  10. TLAW says:

    Forgot a major legal point: All state retirees are of the same legal “class”, i.e., belong to the same retirement fund. To cap COLAs at $25,000 is discriminatory and violates the Equal Protection Clauses of the U.S. and RI Constitutions. Note, after the duped retirees who joined the union sponsored plaintiff groups vote on the settlement, the court will allow a short time period for all other retirees to join a “class” action or vote on the matter.

    This is a slick way to get those who receive pensions over $25,000 to waive their future legal rights.

    I would love to see an out of state law professor or firm take on this case for the over $25,000 pension crowd just to expose and bring to some sort of justice those political and union leaders who have corrupted our state.

  11. George says:

    I don’t blame the union members and retiree’s that want to vote against the settlement. Doesn’t seem like there is much to lose in court. What I think happened in the mediation was the unions knew there wasn’t a better deal coming. They could wash their hands of it and say “we got the best deal we could, you don’t have to vote for it”. I hope the unions vote it down so we can have this mess settled once and for all. If it goes to the ag it will be passed quickly.

  12. Snow says:

    TLAW,
    “Note, after the duped retirees who joined the union sponsored plaintiff groups vote on the settlement, the court will allow a short time period for all other retirees to join a “class” action or vote on the matter.

    This is a slick way to get those who receive pensions over $25,000 to waive their future legal rights.”

    How do the retirees, who have not joined the lawsuit through associations or union sponsored groups, protect their rights? Enter into a class action suit, or vote the proposal down?

    1. TLAW says:

      Non-represented state retirees need to organize. This is probably best accomplished by someone stepping up to secure an out of state private law firm, public interest law firm, or university law department, that has no ties to RI’s power structure. The attorney, or for that matter, a charismatic non-lawyer, initially, may retain a large hall or auditorium, place ads in RI news papers and media, to call for an organizing meeting, review the legal issues, probability of winning on the COLA issue, and cost. It looks like state retirees have only 60 days or so to accomplish this step. Good luck.

  13. Snow says:

    Thank you TLAw, I appreciate your response. I’m an unrepresented retiree, and I will consider your advice and try to get some support very quickly.

  14. [...] the long view, wpri.com’s Ted Nesi writes “if the unions had called senior state leaders in early 2011 and said, ‘Hey, we have a [...]

  15. [...] the long view, wpri.com’s Ted Nesi writes “if the unions had called senior state leaders in early 2011 and said, ‘Hey, we have a [...]

  16. [...] rank-and-file workers and retirees, such as retired Providence teacher Candace McCall, who’ve expressed shock that their union leaders are willing to end the legal challenge in exchange for a relative pittance [...]