Happy Saturday! Here’s another edition of my weekend column – as always, send your takes, tips and trial balloons to firstname.lastname@example.org. For quick hits all week long, follow @tednesi.
1. Don’t believe anybody who says they’re sure of whether the pension settlement is going to go through. As I chronicled Thursday, there at least 10 flavors of opinion on the merits of the deal, a sign of how fluid and heated the debate around it is. That said, keep in mind that the settlement doesn’t necessarily have to be popular to pass. That’s particularly true during the upcoming first round of votes by union and retiree plaintiffs, which must be finished by mid-April. As Kathy Gregg first noted, a ballot that isn’t returned will be counted as a “yes” – so rank-and-file opponents of the deal have to convince at least 50% of their brethren to affirmatively mail in a ballot marked “no” to kill it. That’s a tall order when the voters are split into six groups that won’t be gathering together in any local union hall: state workers, teachers, police officers, firefighters, municipal employees and retirees. Put another way: the deal’s proponents are organized and well-financed; the opponents aren’t. Still, it’s possible a groundswell of opposition could torpedo it. But if the settlement passes that vote and a second one on the union/retiree side, labor lobbyists only need to convince half of the state legislature to back the deal to get it enacted. That seems doable, particularly if proponents of the settlement can win the spin war by highlighting how lopsided its financial impact is.
2. One way the deal’s supporters could get it passed: pay off the municipalities. Specifically, the General Assembly could agree to pay the extra pension contributions the settlement requires from cities and towns. (Clay Pell put forward a version of this idea, though he didn’t suggest covering the full cost.) As the Rhode Island League of Cities & Towns’ Dan Beardsley reminded me this week, back in 1989 the legislature helped close a budget deficit by changing the calculation for teacher pension contributions from 60% state and 40% municipal to 60% municipal and 40% state. “They said we’re going to flip it for one year; it’s been like that since 1989,” he said. If the settlement passes as is, Beardsley said, it would be “probably the second-worst unfunded mandate pushed onto the cities and towns in my four decades here at the League” after the 1989 switch. And it’s not like places such as Providence (facing a $1.2 million hit in 2015-16 under the settlement), Woonsocket ($559,000), East Providence ($506,000) or Central Falls ($216,000) are exactly rolling in dough to pay the higher tab.
PROVIDENCE, R.I. (WPRI) – Rhode Island’s farm revival continued during the Great Recession, though at a considerably slower pace than before, new federal data shows.
The U.S. Census of Agriculture found the number of farms in Rhode Island rose to 1,243 in 2012, up from 1,219 in 2007 and 858 in 2002, even as the number declined nationwide, according to a census conducted every five years that was released Thursday.
J. Michael Downey, president of Council 94, Rhode Island’s largest public-employees union, sent an email to his members Thursday laying out what happens next in the pension settlement process.
Downey reports that every eligible worker or retiree “will soon receive a mail ballot” allowing them to vote on whether to proceed with the settlement, though he didn’t provide any specific dates or deadlines. There are six blocs of voters, including state workers and teachers, and if more than 50% of members of any of the six blocs vote against the settlement, it’s off.
“Consistent with class action litigation, members who accept the proposed settlement are not required to take any action, as unreturned ballots shall be considered as agreeing with the settlement,” Downey also notes – meaning anyone who doesn’t return a ballot will be counted as a “yes” vote on the settlement.
The pension settlement is complicated. And so, naturally, are opinions about it.
Political controversies are often cast in black-and-white terms – you’re either for something or against it. But on many issues there’s a much wider range of possible opinions. It’s more of a gradation than a clear line.
The pension settlement is a great example of that. I’ve seen more than a half-dozen different opinions about it that vary based on the premises about pensions people start with as well as whether they’re emphasizing the fiscal or legal impacts of the deal. I’ve listed each one below – to be clear, though, these opinions aren’t necessarily mutually exclusive, and this list isn’t exhaustive.
Add more opinions in the comments section below!
The original 2011 pension law wasn’t necessary. Much of the discussion about the pension law starts from an agreed-upon premise that Rhode Island had a pension funding problem in 2011 and needed to address it. But even that is contested, usually from the left. Tom Sgouros, the local activist and writer, has argued that the reason there appears to be a pension funding problem is because of the way policymakers and actuaries have decided to measure and fund those liabilities. If the framework is changed – or if the assumptions are altered, as Cranston’s Paul Valletta has colorfully noted – what appears to be a major problem on paper could, if not disappear, at least appear far more manageable. And if that’s your view, there was no need to make the sweeping changes passed in 2011 in the first place.
PROVIDENCE, R.I. (WPRI) – Providence officials say they suspended a boxing program at a South Side recreation center after an internal investigation found the program violated “several city policies and procedures.”
The shuttered boxing program was hosted at the Davey Lopes Recreation Center on Dudley Street, the same facility that nearly had its pool demolished last summer after the city’s 2013-14 fiscal year budget didn’t provide funding for the pool.
Much of the reporting about last week’s pension settlement has focused on the number $3.9 billion, which is the amount of savings the deal would lock in compared with the status quo before the 2011 overhaul.
But that may actually understate the amount of savings state officials would lock in by getting unions and retirees to approve the settlement. The reason is because under the terms of the deal, the unions and retirees wouldn’t just drop their lawsuits challenging the 2011 law – they’d also drop an earlier lawsuit that aims to overturn pension changes made by the General Assembly in 2009 and 2010.
The savings from the 2009 and 2010 changes weren’t included in the estimates put out during last week’s settlement announcement, which used as its baseline the unfunded pension liability at the time of the 2011 overhaul (currently estimated at $8.9 billion, including $8.3 billion for state employees and teachers). There’s no comparable estimate for the 2009 and 2010 changes available online at this time.
WOONSOCKET, R.I. (WPRI) – MinuteClinics could be open in Rhode Island before the end of this year.
CVS Caremark Corp., the Woonsocket-based drugstore giant, says it’s in the process of getting permission to open MinuteClinics in its home state for the first time. The fast-growing chain of more than 800 retail health clinics offer services provided by certified nurse practitioners and physician assistants seven days a week.
Three of Rhode Island’s major candidates for governor this year – Treasurer Gina Raimondo, Cranston Mayor Allan Fung and Providence Mayor Angel Taveras – have all struck deals with union members and retirees over the last two years to reduce the shortfalls in the pension funds for which they’re responsible.
Rhode Island PBS invited me to join the panel for last week’s edition of “A Lively Experiment,” along with Scott MacKay, Wendy Schiller and Dave Layman. The four of us carved up the new WPRI/Journal poll about the Democratic gubernatorial primary and discussed the pension settlement. Here’s the full show:
PROVIDENCE, R.I. (WPRI) – The R.I. Economic Development Corporation “may have repeatedly committed serious violations” of federal regulations in the way it allocated $2 million to Betaspring through the Rhode Island Small Business Loan Fund in 2011, according to an audit obtained by the Target 12 Investigators.
But state officials are strongly contesting the findings of the critical audit, which they ordered, calling its conclusions “fundamentally flawed” and defending the way EDC used the money as above board.
A.H. Belo is moving ahead with its plan to try and sell The Providence Journal.
“We’ve been working very diligently,” Alison Engel, A.H. Belo’s chief financial officer, told investors last week when asked about where things stand with The Journal. “We really didn’t get started on the process until after year-end for a variety of reasons, including just the holidays and having to complete the 2013 close, etc.”
A.H. Belo, which has owned The Journal since 1997, put the paper up for sale in December as part of an effort to refocus the company on its flagship newspaper, the Dallas Morning News, and its market.
Engel said A.H. Belo executives have “made a lot of progress” in working with Stephens Inc., the investment bank that’s shopping The Journal, to put together a presentation about The Journal’s finances that will be given to potential investors. She said those who’ve expressed interest in buying the paper would likely receive the detailed information by the end of this week.
Happy Saturday! Here’s another edition of my weekend column – as always, send your takes, tips and trial balloons to email@example.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 McCallwrote 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.
PROVIDENCE, R.I. (WPRI) – State and union leaders on Friday unveiled a proposed settlement that would end a legal challenge to Rhode Island’s landmark pension changes by adding $232 million to the state’s unfunded shortfall and tweaking how cost-of-living increases, retirement ages and contribution rates work for state retirees and employees.
The settlement asks the General Assembly to approve a 5% increase in Rhode Island’s unfunded pension liability for state employees, teachers and some municipal workers – from $4.8 billion to $5.05 billion – in order to get the unions to drop their lawsuits over the 2011 pension law, as well as previous pension changes passed in 2009 and 2010.
PROVIDENCE, R.I. (WPRI) – Rhode Island’s State Retirement Board on Friday voted to approve a long-awaited proposed settlement that would end labor unions’ legal fight to overturn the landmark 2011 pension overhaul, which saved taxpayers roughly $3 billion by paring back benefits for workers and retirees.
State and union officials are scheduled to hold a major press conference at 4:15 p.m. Friday (oy) to announce the status of negotiations over the pension lawsuit. They’re expected to reveal details about a much-anticipated proposed settlement to end the legal challenge.
If you want to watch the press conference, you’re in luck! WPRI.com will stream the press conference live on our website as it happens. Click here to watch the streaming video once the event is about to begin.
PROVIDENCE, R.I. (WPRI) – Rhode Island students are posting improved test scores, but the state is still not meeting the majority of the goals it has set for closing the achievement gap for poor and minority students, state officials said Thursday.
Are you a pensioner who could be affected by a settlement? WPRI 12 wants to interview you for our news coverage – please contact our assignment editors at firstname.lastname@example.org to share your thoughts.
By Ted Nesi
PROVIDENCE, R.I. (WPRI) – It looks like the much-anticipated pension settlement may be back on track.
At least for now.
The U.S. Federal Mediation and Conciliation Service (FMCS), which is handling the talks between the state and the unions in the pension suit, sent a new media advisory midday Thursday announcing that a press conference will be held Friday, Feb. 14 at 4:15 p.m. in the Department of Administration building in Providence “to report on the ongoing court-ordered mediation to resolve pension litigation.”
The FMCS said the Valentine’s Day press conference is being called at “the joint request of attorneys for the state and for Rhode Island public employee unions and retirees.” The timing means the announcement is now set to happen late in the afternoon on the Friday before a long weekend.
PROVIDENCE, R.I. (WPRI) – The State Retirement Board has scheduled a special meeting for 1 p.m. Friday to discuss and possibly approve a “proposed settlement,” according to its agenda; the action had originally been expected Wednesday morning.
It’s unclear whether that means negotiators have reached an agreement. The U.S. Federal Mediation and Conciliation Service (FMCS), which is handling the talks between the state and the unions in the pension suit, hasn’t commented since Wednesday morning.
Prior to the meeting’s start Raimondo was seen conferring with Licht, a powerful figure in the Chafee administration and another senior figure in the pension talks. Licht also confirmed that Chafee remained out of state after giving a speech in Texas on Tuesday, but said he expected the governor to return to Rhode Island by late Wednesday morning.
Licht said he spoke to Chafee several times Tuesday and into the evening about the progress of the talks. “Governor Chafee is involved completely,” Licht said. “He is fully informed. We talk to him all the time. He doesn’t sit in on the meetings, but we’re talking to him.”
Eagle-eyed Twitter users quickly discovered the online invitation to Chafee’s Texas speech, which said the free event was “open to the public.” That would contradict the official gubernatorial schedule Chafee’s office released for Tuesday, which said he had no public events scheduled.
Chafee spokeswoman Faye Zuckerman did not immediately respond to a request for comment from WPRI.com, but when asked about it by AP reporter David Klepper, she told him: “Is this a story?”
Ironically, Chafee’s reported remarks in Texas included a mention of the problems he thinks are caused by senators constantly leaving Washington to see their constituents. “But that’s the reality, you want to be seen in your home district,” the Rhode Island governor told the Texas crowd.
PROVIDENCE, R.I. (WPRI) – A Rhode Island judge set a Sept. 15 trial date in the high-stakes union lawsuit over the state’s 2011 pension overhaul Wednesday morning, just hours after a much-anticipated news conference to outline a proposed settlement was abruptly called off.
In a surprising sequence of events, the U.S. Federal Mediation and Conciliation Service sent reporters an email at 5:30 a.m. Wednesday announcing that the 2:30 p.m. news conference was being postponed indefinitely. Shortly thereafter, R.I. Director of Administration Richard Licht confirmed that the judge moved Wednesday morning to set Sept. 15 as the date when a trial over the pension lawsuit will start.
PROVIDENCE, R.I. (WPRI) — A much-anticipated news conference scheduled for Wednesday to outline details of a proposed settlement in the state pension reform fight has been abruptly canceled, according to an email from the Federal Mediation and Conciliation Service.
“I will acknowledge that we were all expecting big news today,” Treasurer Gina Raimondo said Wednesday morning at the start of a meeting of the State Retirement Board, which was scheduled to consider – and possibly approve – the proposed settlement as part of its agenda. “There won’t be big news today.”
PROVIDENCE, R.I. (WPRI) – Providence Mayor Angel Taveras and Treasurer Gina Raimondo are locked in a tight battle for the Democratic nomination for governor, with Taveras holding a slight lead but one in four primary voters still undecided, an exclusive WPRI 12/Providence Journal poll released Wednesday shows.
The new survey of 503 likely Rhode Island Democratic primary voters puts Taveras on top at 31%, with Raimondo close behind at 27% and political newcomer Clay Pell further back at 15%. An even larger share of primary voters – 25% – haven’t decided whom they’ll support in the Sept. 9 election.
PROVIDENCE, R.I. (WPRI) – Fewer than half of Democratic primary voters in Rhode Island support the 2011 pension overhaul championed by one of the party’s leading candidates for governor, Treasurer Gina Raimondo, an exclusive WPRI 12/Providence Journal poll released Tuesday shows.
The new survey of 503 likely Democratic primary voters also shows 70% of them think it’s important that a candidate for governor has prior elective experience, a key question for Raimondo rival Clay Pell, while 55% think Providence’s financial problems have been only somewhat solved by Mayor Angel Taveras, another Democratic candidate for governor, since he took office in 2011.
PROVIDENCE, R.I. (WPRI) – Providence mayor and Democratic gubernatorial candidate Angel Taveras said during his final State of the City address Tuesday he will leave the city better than he found it when he took office three years ago.
PROVIDENCE, R.I. (WPRI) – While Rhode Island leaders never should have backed a $75 million loan to Curt Schilling’s 38 Studios, Gov. Lincoln Chafee bears the blame for the company’s final collapse in the spring of 2012, according to one leading industry executive.
John Smedley, president of the Sony Corp. gaming division Sony Online Entertainment, argued in a string of tweets sent Monday that the R.I. Economic Development Corporation board of directors made a basic error in 2010 by putting public money on the line for the high-risk creation of a video game.