May 17th, 2013 at 12:53 pm by Ted Nesi under Nesi's Notes
By Dan McGowan
PROVIDENCE, R.I. (WPRI) – Former State Police superintendent and congressional candidate Brendan Doherty on Friday said he has no plans to run for statewide office in 2014, likely clearing a path for Cranston Mayor Allan Fung to run unopposed in a Republican primary for governor next year.
May 1st, 2013 at 10:35 am by Ted Nesi under Nesi's Notes
By Ted Nesi and Tim White
PROVIDENCE, R.I. (WPRI) – Treasurer Gina Raimondo continued to raise campaign cash at a rip-roaring pace during the first three months of 2013, far outpacing the other leading candidates for the state’s top job.
April 24th, 2013 at 12:51 pm by Ted Nesi under Nesi's Notes
By Dan McGowan
The executive director of Rhode Island’s beleaguered Republican Party has resigned, WPRI.com has learned.
Ann Clanton, who was appointed to the post in March 2012, left the party earlier this month after Mark Smiley won a controversial election to become chairman of the party. Clanton supported former Providence mayoral candidate Dan Harrop over Smiley in the chairman’s race.
Smiley told WPRI.com that lawyer Matthew Fabisch has been appointed interim executive director, but is not currently being paid. Campaign finance records show Clanton earned $2,500-per-month between May 2012 and Sept 2012, but did not collect a check from the party for the rest of the year.
April 22nd, 2013 at 10:38 pm by Ted Nesi under Nesi's Notes, On the Main Site
The fine folks over at Bloomberg View asked me to write a short op-ed for them about the outlook for Rhode Island’s 2014 gubernatorial race, focusing on Treasurer Gina Raimondo’s high profile after the pension fight and how it will impact the campaign. Here’s how I kicked off the piece:
Rhode Island General Treasurer Gina Raimondo has experienced a meteoric rise to fame that most politicians can only envy.
Raimondo, a 41-year-old former venture capitalist, was virtually unknown in 2010 when she coasted to victory as a Democratic candidate in a deep-blue state. Soon the new treasurer surprised almost everyone by engineering the most sweeping overhaul of a public-pension system ever enacted. By the time her reforms became law in November 2011 she was one of the most popular politicians in Rhode Island, and the subject of adulatory coverage in both the New York Times and the Wall Street Journal.
Even before the pension process was over, there was growing speculation that Raimondo might run for governor in 2014, in no small part because the incumbent who signed the pension law — independent ex-Republican Lincoln Chafee — has had an approval rating in the 20s for most of his term in office. It has become clear in recent months that the treasurer is likely to throw her hat into the ring.
April 16th, 2013 at 12:30 pm by Ted Nesi under Nesi's Notes, On the Main Site
By Dan McGowan
Cranston, R.I. (WPRI) – Cranston Mayor Allan Fung has hired a veteran Republican political operative to help craft a likely campaign for governor in 2014, WPRI.com has confirmed.
Patrick Sweeney, who ran Republican Barry Hinckley’s unsuccessful bid for U.S. Senate in 2012 and previously served as executive director of the Rhode Island GOP, was brought in on Apr. 1 as a consultant for the mayor of Rhode Island’s third-largest city.
April 8th, 2013 at 3:22 pm by Ted Nesi under Nesi's Notes, On the Main Site
By Dan McGowan
He may not be ready to confirm that he’s running for governor in 2014, but Providence Mayor Angel Taveras certainly appears to be putting the pieces together for a statewide campaign.
Taveras is in Los Angeles today where Congresswoman Loretta Sanchez is hosting a fundraising for the first-term mayor, according to campaign finance director Peter Baptista. Records show Sanchez previously contributed $1,000 to Taveras’s mayoral campaign in 2010.
In addition to the fundraiser, Baptista said Taveras plans to meet with “major Democratic donors” while he’s in California.
Taveras had just over $413,000 in his campaign account as of Dec. 31, trailing only General Treasurer and likely Democratic primary opponent Gina Raimondo among those considering a run for governor. Raimondo had $1.36 million in her war chest by the end of 2012.
The fundraising trip out west comes a week after the Providence City Council unanimously approved a pension settlement with the city’s police and fire unions and retirees that Taveras says will save the city $18 million. If they do run against each either, Taveras will likely tout his pension changes efforts over Raimondo’s statewide reforms, which are currently tied up in court.
Aside from Taveras and Raimondo, Cranston Mayor Allen Fung, former Congressional candidate Brendan Doherty, former Congressman Bob Weygand and Moderate Party Chairman Ken Block are considering a run for the state’s top job. Gov. Lincoln Chafee has indicated he intends to seek re-election.
Chafee on Monday was named the most vulnerable governor in country for 2014 by the New York Times’ FiveThirtyEight blog.
Dan McGowan ( dmcgowan@wpri.com ) covers politics and the city of Providence for WPRI.com. Follow him on Twitter: @danmcgowan
April 4th, 2013 at 7:36 pm by Ted Nesi under Nesi's Notes, On the Main Site
By Ted Nesi
PROVIDENCE, R.I. (WPRI) – Cranston Mayor Allan Fung signaled Thursday he’s likely to throw his hat into the race for governor next year, adding his name to the list of those preparing to challenge independent Gov. Lincoln Chafee.
March 21st, 2013 at 9:44 am by Ted Nesi under Nesi's Notes
By Dan McGowan
A former Providence mayoral candidate will square off with the head of the state’s Republican Chair’s Caucus on Thursday as the R.I. Republican Party prepares to elect its third chairman in two years.
Dan Harrop, a doctor who was trounced by incumbent Mayor David Cicilline in 2006, and Mark Smiley, who is viewed as a leader within the more conservative faction of the state GOP, are running to replace Mark Zaccaria, who announced his plans to step down following an election season that saw the party lose seven seats in the General Assembly and all three of its federal races.
So who is the favorite? After the jump, read the major endorsements for each candidate. (more…)
January 31st, 2013 at 9:22 am by Ted Nesi under Nesi's Notes, On the Main Site
Democrat Gina Raimondo is the early favorite to win the 2014 governor’s race, according to a new poll released Thursday morning to WPRI.com.
The Public Policy Polling survey [pdf] shows Raimondo would win anywhere from 32% to 46% of the vote depending on which hypothetical opponents she faces. She is the only candidate to crack 40% support in any of 10 ballot tests conducted by PPP.
If Raimondo is out of the picture, however, there’s no clear frontrunner: the leading candidates in non-Raimondo scenarios shift between Republican Brendan Doherty, Republican Allan Fung and Democrat Angel Taveras depending on the match-up. Moderate Party founder Ken Block starts out with double-digit support in most scenarios, suggesting his presence could have a major impact on the outcome.
Independent Gov. Lincoln Chafee faces an unsurprisingly uphill battle to win a second term, with more than half of voters saying they don’t want him to run again. His strongest shot at re-election comes if he runs as a Democrat: running under the party banner, Chafee starts out trailing Republicans Doherty and Fung by just four points. Among voters who do want Chafee to run again, 20% say he should run as an independent and 18% say he should run as a Democrat.
January 17th, 2013 at 5:00 am by Ted Nesi under Nesi's Notes, On the Main Site
By Dan McGowan and Ted Nesi
PROVIDENCE, R.I. (WPRI) – The reaction to Gov. Lincoln Chafee’s budget proposal Wednesday night was very different from the response to his first two. Here’s a roundup of reactions from Fox, Paiva Weed, Raimondo, Taveras, Fung, Melo, DaPonte, Newberry and Tanzi.
• Related: Chafee seeks lower corporate tax rate, more school funding (Jan. 16)
January 11th, 2013 at 11:32 am by Ted Nesi under Nesi's Notes, On the Main Site
In response to this morning’s post about the GOP in blue states, a reader named “RInative” offered an insightful comment about the Rhode Island party’s plight and what it should do next – good enough to run in full here:
Mr. Graham offers up a good solution but I am not certain it would work in RI because it says “spend money” and it’s a documented fact that RIGOP is incapable of raising it. No one gives to the state party because with the exception of the brief Ken McKay era, it has been run badly for the past 20 years. The Almond and Carcieri teams invested no effort in building the party and developing a “bench” so there are few Rhode Island Republicans with any real political experience unless they’ve worked elsewhere – or for Democrats. Another problem for the RIGOP – because there are so few R electeds – and the GOP stain is so bad – the very thin GOP bench can’t find work here and so they leave – Ken McKay is the best example, but just last week, Doherty’s manager, Ian Prior, took a job in DC. The talented people who remain here and lean Republican try to make a living while avoiding the GOP label and anything to do with party politics.
So essentially the RIGOP has no money and no talent. So where to? The mayors are the one bright spot – Fung, Fontaine and Avedesian. They have all been good in their roles but none has the star power to contend in a governor’s race. Kilmartin looks comfortable in the AG role and it would be hard to displace him on performance at this point. I think that there’s hope for the RIGOP in three races: Treasurer, Secretary of State and Lt Governor. With the exception of the master lever pullers, Rhode Islanders have always been ticket-splitters – especially outside of the cities – so it’s not hard to see how these statewide offices are winnable. The key for GOP candidates is to get in the races early with a well-defined platform so the can lay out their ideas and don’t get lost in the noise around a D primary. The party would also do well to recruit Catherine Taylor to run again and work with her to build a strong group of women candidates for GA seats.
I don’t think RIGOP should focus on Governor’s race – it has not helped the party in the past and it takes all the strength out of the base. If a self-funded candidate comes along – great – but at this point he would be a sacrificial lamb. (And let’s agree to stop saying that Robitaille “came close”. Yes, he grabbed the whopping R base and came in 2nd in a 4 way – which is actually equivalent to coming in 2nd in a 2 way.)
The previous comment addresses some of the issues – and I will agree that to the extent RIGOP can distance itself from the national party, the better off it will be. However, until RIGOP can build itself up by fielding successful moderate candidates – and 2014 may be the last chance – the national issues are almost irrelevant in state and local races.
Agree? Disagree? Not sure? Share your own thoughts below.
• Related: Lessons from the blue states as RI Republicans prepare for ’14 (Jan. 11)
January 11th, 2013 at 5:00 am by Ted Nesi under Nesi's Notes, On the Main Site
Rhode Island Republicans aren’t alone in their conundrum.
The state party just took another drubbing in a big election year, managing to lose a bunch of its few General Assembly seats and striking out against a deeply tarnished incumbent congressman. Their compatriots in places like Massachusetts, California and Washington can sympathize.
The big question is, what now?
Warwick Mayor Scott Avedisian, one of the most prominent Republicans in the state (and someone who actually wins elections), said during an RIPR panel interview Thursday that as 2014 approaches he’s keeping in close touch with Cranston Mayor Allan Fung and former congressional hopeful Brendan Doherty, an attempt to coordinate their efforts and come up with a viable slate of candidates.
November 20th, 2012 at 3:03 pm by Ted Nesi under Nesi's Notes, On the Main Site
Fixing Rhode Island’s local pension plans is going to make the state overhaul look like a cakewalk.
The 36 locally run pension plans, many of them underfunded, have become a growing burden on municipal taxpayers and a source of concern for retirees thanks to years of shoddy management. Last fall the General Assembly ordered the communities to study the problem and deliver solutions to a new commission, but Democratic state legislators have refused to sign off on cost-of-living freezes, citing labor contracts.
The towns’ solutions were due last week, and all but six communities complied. But the commission members don’t sound confident that real progress is in sight, Randy Edgar reports for the Projo:
In the long run, shifting troubled locally run plans into the state system would address many of the issues that got the plans into trouble in the first place. Retiree benefits would have to match those of other cities and towns in the state-run system, and cities and towns would have to make full “annual required contributions” each year to replenish low fund balances and keep up with annual payouts.
But as some members of the Locally Administered Pension Plans Study Commission noted Monday, forcing such moves would raise a host of potential problems. …
[T]he prospects for getting all of those plans adopted, and in some cases negotiating concessions from local unions, is far from certain.
“What we’re trying to figure out is what happens if that doesn’t work,” [commission Chairman Rosemary Booth Gallogly, director of the state Department of Revenue,] said. “Are we just going to keep meeting for the next five years and saying, ‘Well now you’re not 30 percent funded you’re only 22 percent funded, well now you’re not 22 percent funded you’re only 16?’ At some point we have to make people do something.”
To understand why Gallogly is concerned, look no further than Cranston, where Mayor Allan Fung wants the City Council to reduce benefits before its 18% funded pension plan runs out of money; Treasurer Gina Raimondo has suggested he should consider “a buyout scheme.” Yet lawyers for the retirees say the city can’t do what Fung is proposing, Mark Schieldrop reports for Patch:
The City Council met behind closed doors last night to talk with city lawyers about the mayor’s plan to cut pension benefits for police and fire retirees. …
The plan offers four possible options to save the failing pension plan, each recommending a freeze on cost of living adjustments (COLAs) for 10- to 15-years or a permanent freeze.
James E. Kelleher, a lawyer representing the retirees, told the council that the situation has echos of a legal dispute in 2003 that began when the city arbitrarily changed COLAs and other benefits for retired firefighters without going through the collective bargaining process. The city was taken to court and lost, Kelleher said. And the city did not appeal, which made the ruling a “final judgement,” he said. …
If the council acts, Kelleher warned, retirees would seek a Superior Court injunction ruling the City Council was in violation of a court order based on the Judge Daniel Procaccini’s ruling earlier in the decade that states any change to retiree benefits must be accompanied by collective bargaining.
October 19th, 2012 at 5:00 am by Ted Nesi under Nesi's Notes, On the Main Site
It hasn’t gotten a lot of attention, but another Rhode Island pension battle is brewing in Cranston, where Mayor Allan Fung is pushing the city’s finance committee to take unilateral action on its underfunded, closed pension plan for pre-1995 firefighters, Paul Davis reports for The Providence Journal:
Now Fung wants the city’s Finance Committee to approve his cuts to benefits at a special Oct. 25 meeting. …
Cranston, he says, can no longer afford the locally administered plan, which costs more than $20 million a year — nearly 20 percent of the city’s budget, excluding school costs.
In a bid to save money, the mayor wants the city’s retirees to forgo an annual cost-of-living increase for the next 10 years.
He also wants to cap all cost-of-living adjustments, or COLAs, at 3 percent after the 10-year freeze. Retirees now get a minimum 3-percent increase but can earn more if current employees get more.
• Related: Slideshow: Mayor Fung’s warning to pensioners in Cranston (Sept. 18)
September 18th, 2012 at 9:57 am by Ted Nesi under Nesi's Notes, On the Main Site
Among Rhode Island’s 36 locally run pension funds, few are in more trouble than Cranston’s plan for police officers and firefighters hired before July 1, 1995. The plan has $55 million in assets to cover a total liability of $311 million – only about 18% of what it needs.
Mayor Allan Fung says retirees’ COLAs need to be suspended to resolve the plan’s funding problems and, in Angel Taveras fashion, he went to them directly last week with this presentation:
Cranston Pension Presentation, 9-13-2012
Cranston Patch’s Mark Schieldrop has firefighter union chief Paul Valletta’s reaction.
• Related: Allan Fung: ‘Listen: pension reform … has to happen’ (March 28)
September 9th, 2012 at 5:00 am by Ted Nesi under Nesi's Notes
August 29th, 2012 at 3:03 pm by Ted Nesi under Nesi's Notes, On the Main Site
The Rhode Island delegation to the Republican National Convention, led by Party Chairman Mark Zaccaria and Cranston Mayor Allan Fung, cast the state’s votes for Mitt Romney and Ron Paul on Tuesday in Tampa. Click the photo to watch their moment in the sun – including a Del’s reference – thanks to CSPAN:
August 7th, 2012 at 3:54 pm by Ted Nesi under Nesi's Notes, On the Main Site
The list of Rhode Island politicians seriously considering a run for governor in 2014 is getting longer.
Cranston Mayor Allan Fung, former candidate John Robitaille and Moderate Party founder Ken Block all suggested in interviews with WPRI.com Tuesday that they could make a bid for the state’s highest office.
They join three Democrats – Treasurer Gina Raimondo, Providence Mayor Angel Taveras and former Auditor General Ernie Almonte – on the list of individuals who may be on the ballot in 2014. (Almonte has already launched his campaign.) And of course there’s also incumbent Gov. Lincoln Chafee, an independent who says he expects to run for a second term.
Republican Fung, mayor of the state’s third-largest city, has a bigger campaign war chest than anyone else in the GOP and is running unopposed for a third term this November.
January 25th, 2012 at 5:57 pm by Ted Nesi under Nesi's Notes, On the Main Site
The new local pension study commission got off to a so-so start at its first meeting Wednesday.
The 14-person panel – which counts among its members Providence Mayor Angel Taveras, Treasurer Gina Raimondo, Department of Administration Director Richard Licht, RIPEC chief John Simmons and Cranston Mayor Allan Fung – spent the bulk of the meeting getting an overview of how pensions work from Joe Newton, the state’s actuary.
But it soon became clear just how much divides the group, and just what a struggle it’s going to be to reach agreement on different solutions for 36 different pension plans in various states of duress.
The problem starts with the basic question of what the commission is even supposed to do. The law creating it defines its mission only in general terms. Fung said he was “concerned” that the panel might push local pension funds to adopt the 7.5% rate of return forecast the state is now using, which could balloon their liabilities.
November 17th, 2011 at 6:00 am by Ted Nesi under Nesi's Notes
Licht and Raimondo in October
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.
November 14th, 2011 at 6:00 am by Ted Nesi under Nesi's Notes
Treasurer Raimondo has taken a lot of heat for pushing to do little about the 36 municipal pension plans outside the state system as part of the sweeping reform bill poised to pass this week. But last week the treasurer put forward a strong case on WPRI 12′s “Newsmakers” for why her reservations are valid rather than politically expedient.
Mayor Taveras and his allies have made a compellingly simple argument for expanding the Raimondo-Chafee bill’s proposed COLA freeze to encompass the so-called non-MERS plans, too: If the state is going to fix its pension shortfall in part by suspending COLAs, why shouldn’t the cities and towns do the same?
Raimondo’s response has been that they haven’t done the necessary work yet to prove the need for a COLA freeze. And that sounded disingenuous even to some of the treasurer’s fans. After all, umpteen reports have been issued examining the locally run plans. Funding levels are below 20% in Cranston and Coventry, and not much better in Providence. How can Raimondo possibly argue they aren’t in enough trouble to warrant a COLA suspension?
But that’s not what she’s saying. Here’s how Raimondo explained her position on “Newsmakers”:
October 22nd, 2011 at 6:00 am by Ted Nesi under Nesi's Notes
By Ted Nesi
PROVIDENCE, R.I. (WPRI) – Treasurer Gina Raimondo fired back at her critics Friday, dismissing Cranston Mayor Allan Fung’s assertion that the pension overhaul bill will lead to “crushing” tax hikes and emphasizing her firm belief that the courts will uphold it.
“I have personally committed to Allan Fung and Mayor Taveras and every single mayor that I will work with them to come up with creative, long-term legal solutions,” Raimondo told WPRI.com during a 40-minute interview in her first-floor Statehouse office.
At issue is the section of the Raimondo-Chafee bill that lays out a plan for dealing with the 36 locally run pension plans, 24 of which are at risk of running out of money. It requires cities and towns to run new actuarial studies of the plans, then get the state to approve proposals for dealing with them.
Fung says the only way he’ll be able to fulfill the bill’s requirements is to hike taxes and pour money into the massively underfunded plan in his city. “He’s 100% wrong,” Raimondo said, because there are other potential options and she’d never sign off on a plan that hurt Cranston taxpayers in the way Fung suggests.
“Why wouldn’t we work together with Allan Fung to come up with a buyout scheme for his closed plan?” the treasurer said. “How else do you think you fix a closed plan that’s 15% funded? It’s 15% funded and it’s closed. He has no one new paying into it.” (A closed pension plan no longer enrolls new hires.)
October 19th, 2011 at 3:50 pm by Ted Nesi under Nesi's Notes
Taveras speaks at City Hall in March
Providence Mayor Angel Taveras is less than impressed with the piece of the Raimondo-Chafee bill that deals with locally run pension plans such as his city’s massively underfunded system – a strong sign his side lost a battle that raged behind closed doors in recent days.
“Upon initial review, the pension reform bill does not provide Providence any of the tools we need to reform the city’s ailing pension system,” Taveras told WPRI.com in a statement Wednesday. “We will be meeting with leaders at the State House to discuss next steps.”
Taveras – along with at least nine other local leaders including Cranston Mayor Allan Fung – had pushed hard over the past week to get state leaders to include provisions that would allow major changes to the 36 locally run plans, a key priority of Governor Chafee’s.
Taveras’ statement made no mention of Raimondo and Senate President M. Teresa Paiva Weed, who both resisted including the stronger measures pushed by Taveras, Fung and the Rhode Island League of Cities and Towns that would let them override collective-bargaining agreements.
August 18th, 2011 at 1:43 pm by Ted Nesi under Nesi's Notes
The Wall Street Journal’s David Wessel has a fascinating column today about the lessons Europe can learn from how the U.S. and Brazil dealt with “tensions between sharing a currency and a central bank while pursuing largely independent fiscal policies” – basically, the Greece vs. Germany problem:
For months, Europe has been hamstrung by what one seasoned observer of the global economy describes as three “No’s:”
• No devaluations, meaning neither Greece nor Portugal can leave the euro to depreciate their currencies to regain competitiveness.
• No defaults, meaning holders of government debts must be paid in full.
• No transfers, meaning taxpayers in rich countries like Germany and France won’t bail out southern European spendthrifts.
Wessel’s solution: the European Union should use “the restructuring of state government debts to impose a measure of fiscal discipline and to bolster the power of the central government.” He points to two examples: Alexander Hamilton’s decision in 1790 to have the United States assume the states’ $25 million in Revolutionary War debts, and Brazilian President Fernando Henrique Cardoso’s similar move in that country a decade ago.
Reading this led my thoughts back to Rhode Island. Could something like that be part of the solution to the crisis in many of the state’s locally-run pension plans?
There are 23 plans run by 18 municipalities – about half the 39 cities and towns – that “are considered at-risk” because of underfunding, former Auditor General Ernest Almonte told the pension advisory group Wednesday. They include Providence, Warwick, Cranston, Pawtucket and East Providence – the state’s five largest communities and key parts of its economic engine.
This fall’s special legislative session on pensions is unlikely to do anything to address those local plans, focusing instead on the ones run by the state. But Almonte and Cranston Mayor Allan Fung warned of dire consequences if the independent plans’ problems aren’t addressed soon, and Governor Chafee proposed the MAST Fund partly due to those concerns.
Almonte and Fung suggested the plans could be moved into the state system “on a go-forward basis,” meaning just for new workers. But you have to wonder whether the day will come when the state government is forced to assume some responsibility for the local pension liabilities, as a way to avoid more situations like Central Falls. Most of the locally run plans are more poorly funded than the state one.
Almonte and Fung offered other suggestions, as well: requiring benefit cuts until a local plan’s funding level improves; establishing permanent limits on the generosity of benefits that mirror the state rules; abolishing double-dipping, the purchase of service credits, and benefit enhancers; auditing each independent plan; and exploring the possibility of buying out pensioners in troubled plans with a lump sum payment.
Forcing Barrington taxpayers to bail out Pawtucket retirees would be an unpopular move, to say the least – tough measures, including benefit reductions, would probably have to be a part of any deal. Yet it’s hard to see how Providence, for example, will ever be able to cover the retirement promises it’s made without assistance.
(photo: Wikipedia)
July 18th, 2011 at 1:54 pm by Ted Nesi under Nesi's Notes
The Chafee-Raimondo pension advisory group dove deep into the weeds at the second of its five public meetings on Monday, with phrases like “average accruals,” “multipliers” and “final averaging periods” all getting thrown around in a Warwick Public Library conference room.
The discussion may have gotten mind-numbing at times, but don’t let that fool you – the consequences of what the group discussed would be dramatic. Just one example: if the state opted to keep its annual pension contribution at the same level as it is now going forward, pensions would need to be cut by 25% to 30% to get rid of the unfunded liability on the current schedule. That was just a hypothetical, but it illustrated the stakes.
The group’s next public meeting is Aug. 17, with an agenda of: “Scenario review, legal, financing, municipalities.” In the meantime, here are a few quick thoughts from today’s meeting:
• The National Education Association Rhode Island’s Bob Walsh and Cranston Mayor Allan Fung seemed to represent the two boundaries of opinion among the panel members. They clashed a few times, notably over the question of whether changes in private-sector retirement benefits should be a part of the discussion here.
Fung argued that the group needs to take into account the rise of 401(k)s and the fact that few taxpayers will receive anything like a government pension from their employers; Walsh countered that a decision to provide skimpier retirement benefits by private companies is no reason for the government to do the same. “Welcome to the private sector,” Fung said. “Not a good model,” Walsh shot back.
Later, Fung asked the state’s actuaries to run the numbers for switching entirely to a defined-contribution plan.
• Speaking of Walsh, retirees and current workers have a powerful advocate by having him on the panel. He knows these issues backwards and forwards, and jumped in regularly to take issue with points made by others. He’s also one of two panelists assigned to look at alternative financing sources for the pension plan – which could include borrowing, reamortization, or transferring the Lottery or Twin River to the pension fund.
• Richard Licht, Chafee’s director of administration, is relentlessly practical, always seeking to bring the discussion back to ground level. “If we didn’t have an unfunded liability and we were starting all over again, we wouldn’t be here,” he reminded the others after a lengthy discussion about the cost of current employees’ pensions.
• Simplicity masking complexity? For all the confusing terms thrown around today, actuary Joe Newton offered a reminder of how simple the state’s problem is when he put an equation up on the screen:
C + I = B
… meaning Contributions to the pension fund (from workers and taxpayers) + Investment returns = Benefits.
• The broader question of “retirement security” continues to be a flash point. The meeting started with a debate over how much of a retiree’s income a pension should replace, which led to a discussion of whether Americans in general can be expected to save enough money to supplement the pension. Others said it wasn’t this group’s responsibility to solve a more general U.S. retirement-financing crisis.
• A key theme for Raimondo since she kicked off this debate has been the question of priorities, and the way high pension costs crowd out spending on other government priorities. That’s why she said she unveiled her “Truth in Numbers” report at the homeless shelter Crossroads Rhode Island, “and that’s why we’re meeting in this public library,” she said Monday. Fung warned there would be “an uproar and a riot” if he has to raise taxes or cut services to the extent required by the new pension contribution estimates.
• A significant amount of the pension panel’s work is happening behind the scenes. RISD Professor Bill Foulkes, who’s leading the group, referenced the results of an informal survey he conducted among the members to discuss their thoughts about retirement security. Conference calls and other communication is also happening outside these meetings.
June 16th, 2011 at 7:00 am by Ted Nesi under Nesi's Notes
Chafee, left, and Cranston's Fung read Raimondo's report
When Governor Chafee and Treasurer Raimondo released the names of the 12 members of their pension advisory group on Wednesday, it was a bit of a surprise to see that one of them was Cranston Mayor Allan Fung, who in recent months has criticized both Chafee and Raimondo for their handling of the pension issue.
In an interview, Fung told WPRI.com he was “honored” when Raimondo called and asked him to be on the panel. He is the only municipal official in the group. Fung, Raimondo and former Auditor General Ernie Almonte – another panel member – all spoke at a URI forum on pensions last month.
“It’s so critically important to have a voice to make sure that these reforms, first of all, include the municipalities, and second of all, that it is the right type of reform to get us on the right track going forward,” Fung said. “I’m going to make sure that when they do the comprehensive reform, that the local piece has to be included, as well.”
The mayor repeated the concern he’s expressed in the past that discussion of the pension issue in Rhode Island frequently ignores the problems of 36 locally administered pension plans in cities like Cranston, Providence and Warwick. They’re “the ones that are really struggling with paying the bills,” and the 36 plans’ benefit structures cannot be changed without state legislation, Fung said.
One reason Raimondo asked Fung to join the panel may be because his city has both locally administered plans and others that are part of the state-run MERS system, the mayor said. He also negotiated an agreement with the city’s Teamsters to switch new employees to a 401(k)-style plan.
After speaking with the treasurer, Fung said he’s “hopeful” she and the governor will pay attention to the advisory group’s suggestions. He also said he’s “cautiously optimistic” that labor leaders on the panel will be on the same page as him.
“I hope union members are more willing to come to the table to provide real solutions and are not there to block or obstruct them,” Fung said.
You can hear more about the mayor’s thoughts on the pension issue in this March interview.
(photo: Ted Nesi/WPRI)
May 31st, 2011 at 10:15 am by Ted Nesi under Nesi's Notes
Here’s a fun recollection in Kevin McNamara’s Sunday profile of Ed Cooley, PC’s new basketball coach:
Cooley’s life is a Full Rhode Island. His mother is a Narragansett Indian and his family tree owns branches that are seemingly never-ending. “I have more than 300-350 relatives. Easy,” he says.
He played for the Eighth Ward Democrats in the Elmwood Little League against two future mayors, Cranston’s Allan Fung and Providence’s Angel Taveras. Another ex-mayor, Cranston’s Michael Traficante, was his youth football coach with the Edgewood Eagles. When Cooley was at Central High, Taveras played baseball at Classical with some of his friends. “He was a good baseball player,” Cooley says, “a funny guy. Big personality. To see him now, he’s, well, kind of geeky. He wasn’t like that as a kid. I am so proud of Angel.”
April 13th, 2011 at 7:00 am by Ted Nesi under Nesi's Notes
Chafee talks with his policy director Brian Daniels, left, and communications director Mike Trainor.
This is the second of three articles based on my interview with Governor Chafee.
Gov. Lincoln Chafee is not ruling out reducing pension benefits for current state retirees and employees already vested in the system if that’s what Treasurer Gina Raimondo decides is necessary to get it on sounder footing.
“We have to fix it,” Chafee said Monday when asked about the pension system during a 45-minute interview with WPRI.com in his Statehouse office. Asked if that was the bottom line for him, the governor said: “Yes. Yes.”
But, Chafee added, “It’s not going to be easy – even my 3% [increase in employee pension contributions] is not popular.” He expressed hope that public-sector unions would support major changes, too, if it means they can promise their members they will receive the pensions they have been promised.
Chafee’s comments came the week of a state Retirement Board meeting – scheduled for 9 a.m. Wednesday – where Raimondo is set to release a study that will show whether Rhode Island’s assumptions about the state pension system’s financial health are accurate.
Chafee said he and Raimondo “share a strong feeling that this has to be done as collaboratively as possible, to get success. … If it’s going to be successful, the treasurer, the governor, the unions, Assembly leaders, all should be part of the proposal.” He referenced the 2009 report of a special legislative commission on pension changes as one potential starting point for discussions.
Local pensions could be cut
The governor reiterated his concern about locally administered municipal pension funds, many of which are in far worse shape than the state’s. His budget would create a new Municipal Accountability, Stability and Transparency (MAST) Fund that would combine increased local aid with punishments for communities that do not make their full retirement fund contributions annually.
Chafee said he has learned more about concerns expressed by Cranston Mayor Allan Fung and others that the MAST Fund’s requirements will be too expensive unless they are paired with legislative changes allowing cities and towns to reduce pension benefits. The governor said he discussed the issue at a meeting of town managers recently and is open to signing legislation allowing them to do that.
“I’d absolutely be willing to work with Mayor Fung and the towns and cities on that, if that’s of help in getting their funds solvent,” Chafee said.
Fung said Tuesday he welcomed Chafee’s support. “The question now has to be to what extent he is willing to sort of put his neck on the chopping block for those reforms,” Fung said. “That’s the critical question.”
Fung said he hoped Chafee would support “meaningful reforms, and not just maybe some of these one-offs here and there.” As a starting point, he suggested the governor should lobby in favor of a House bill, H 5884, that includes some of the changes he wants to see. A hearing on that legislation is scheduled for Thursday.
Susanne Greschner, head of the state’s Division of Municipal Finance, recently visited Cranston to hear more about the mayor’s concerns. “I’d love to be able to sit down with the governor myself sometime to see what he’s thinking,” Fung said.
‘Call the roll’ on gay marriage
Another hot topic on Smith Hill this spring is whether to legalize same-sex marriage, which Chafee supports. Proponents have expressed concern that strong opposition in the Senate and a lack of votes in the House could mean the measure does not pass this year.
Chafee called on both chambers to hold roll-call votes on gay marriage now, citing the experience of Vermont Gov. Peter Shumlin, who visited Rhode Island last month and told Chafee he was stunned by how many legislators wound up supporting legalization when a vote was finally called.
“So I say, call the roll,” Chafee said – which House Minority Leader Robert Watson tried and failed to do Tuesday.
Chafee said he was open to two legislative changes that have strong support in Rhode Island’s news industry – the creation of a stronger reporter’s shield law and the addition of a “balancing test” to the state public records act – though he said he would need to study both ideas before deciding whether to sign off on them.
The governor also reiterated that he would like to attend the eventual ribbon-cutting ceremony for 38 Studios, the video game company founded by former Red Sox pitcher Curt Schilling whose $75 million taxpayer-guaranteed loan was harshly criticized by Chafee as a candidate. The company’s employees began working from their new office in Providence on Tuesday.
Asked whether his attendance would be awkward in light of his rhetoric about 38 Studios on the campaign trail, Chafee replied: “Nah. We’re all grown-ups.”
The governor also said he has not spoken to Schilling since taking office. ”He got a good deal,” Chafee said of Schilling. “I’ve got no gripe against him.”
Chafee emphasized repeatedly that his administration wants to find more spending cuts in state government as it gets the lay of the land. “We can do more with less,” he argued, saying he wants the governor’s office to show the largest percentage decrease in spending this year. Work has already begun on the budget for 2012-13, which is not due until early next year.
The new governor also expressed surprise at the size of the state’s work force after taking a tour. “I’ve been doing walk-throughs of all the state departments, and, frankly, even with all the cuts, I’m boggled at how many people work at [the Department of Administration] over there,” he said. “It took us three days to say ‘Hi’ to everybody.”
Chafee implied he does not want to see the state’s payroll grow. “You can move somebody around maybe, if that’s where it’s needed for providing the service, but do not hire,” he said. “Find somebody, move them.”
Asked why his budget took on so many different policy changes as once, Chafee quoted Martin Luther King’s saying about “the fierce urgency of now.”
“Let’s do as much as we can,” Chafee said. “It’s going to take a long time.”
Check back tomorrow for Chafee’s thoughts on politics – including President Obama, last week’s federal budget deal and the governor’s political future.
(photo: Ted Nesi/WPRI)
March 28th, 2011 at 11:25 am by Ted Nesi under General Talk, Nesi's Notes
Cranston Mayor Allan Fung took to the pages of The Providence Journal this morning to offer a tough critique of Governor Chafee’s proposed MAST Fund. The headline: “A colossal stealth property-tax hike.” Fung said MAST will only make cities and towns’ financial situations worse unless it’s paired with legislation allowing them to cut pension and retiree health benefits.
I talked with Fung this morning to get a better sense of his concerns and what he wants from the governor. The transcript has been lightly edited for clarity.
Aren’t you blaming Governor Chafee for something that’s Cranston’s fault? He didn’t force the city to promise generous benefits and then fail to fund them.
It’s not just a funding problem. I think this is indicative of all pension plans, whether it’s local, state or even the federal plans that we have right now. It’s a combination of the sins of the past, not only from a failure to fund them, but also the problem of generous benefits. And what I was saying in my editorial was, look, we cannot – cannot – just see this as a revenue problem, where all you’re doing is raising taxes to meet your obligations, because all you will do is crush the taxpayers. There has to be some corresponding reforms of those generous benefits, to peel them back so it’s not as burdensome on the taxpayers.
Have you approached your own unions there in Cranston about that and tried to bargain with them? I know Mayor Taveras is looking at that in Providence.
In the past I have. For instance, one of the big successes that I had was with my Teamsters. I think that was probably one of the first unions in the state that has agreed to move new employees out of a defined-benefits plan and into a defined-contribution plan, and I was able to get the enabling legislation passed last year so any new Teamsters – and they’re all the municipal City Hall employees – are now no longer in a pension plan. So that’s one of the big first steps that we have to move towards.
How about the other unions? Have you tried with them?
Yes. It’s difficult, because with the police and fire we were in concession discussions. Pension discussions did come up, and they will still come up; in fact, I’ve sent letters to them because of the governor’s MAST proposal to try to initiate discussions to peel back on some of those benefits if possible.
But the difficult question it comes down to is about those that are vested and retired: Who represents them? That’s one of the difficulties that we’re going to encounter because for some, the unions may not represent them. And that’s always been this question that’s been hanging out there.
February 22nd, 2011 at 12:34 pm by Ted Nesi under General Talk
U.S. Sen. Sheldon Whitehouse can cross one name off his list of potential opponents: Cranston Mayor Allan Fung, who thinks Republicans will need to spend $5 million to be competitive against the first-term Democrat.
“I’m not considering a run against Sheldon in 2012,” Fung told my colleague Tim White this morning.
When Tim first broached the idea with him, Fung replied: “Unless the national Republican Party plunks down $5 million…” before letting out a laugh. “It’s going to be a very expensive race,” he said.
Fung also told Tim he’s “planning” on seeking a third term as mayor next year; he previously won in 2008 and 2010. Fung was a city councilman and a lawyer for MetLife before becoming mayor.
Fung won’t lack for funds if he does run for mayor – or any other office in the state, for that matter. His $75,000 campaign war chest is the fifth-largest among Rhode Island’s top politicians, a WPRI.com survey found earlier this month.
Fung’s fellow Republican mayor, Warwick’s Scott Avedisian, told me yesterday he is thinking about entering the race against Whitehouse, and suggested a G.O.P. candidate would need to throw his hat into the ring by June if he wants to mount a competitive bid.
Avedisian’s war chest was sixth-biggest in the state – right behind Fung’s – in our WPRI.com survey, at $71,000. But he couldn’t use that money for a Senate race since it’s a federal office.
In the meantime, all eyes are on Florida’s Hutchinson Island, where former Gov. Don Carcieri has a vacation home – and is weighing whether to jump into the race. And then, of course, there’s always the possibility of a dark-horse candidate coming out of left field – just as Carcieri himself did back in 2002.