The Pench What's Next: Rallies and testimony over state pension plan

PROVIDENCE, RI – Testimony at Wednesday's public hearing on proposed pension overhaul pit organized labor against small business. Hundreds of people crowded the state house for the first of three public hearings on a bill that would scale back public employee pension benefits in an effort to return the plan to solvency.

Organized labor turned out in full force to fight the pension overhaul at a hearing before the joint Senate and House Finance Committees. The bill would raise the retirement age and suspend cost of living increases for retirees. J. Michael Downey of the American Federation of State, County and Municipal employees called the bill "draconian."

"The public employees I represent have already shared and sacrificed all they can afford to," says Downey. "We can do no more."

But members of Engage Rhode Island, a coalition of small businesses, say unless the overhaul bill is passed in its entirety, taxes will rise and municipal services will suffer. John Galvin, chief financial officer of Colette Vacations, spoke for the group.

"People are very concerned about what's going to happen in the schools, what's going to happen at the municipal level if nothing's done," says Galvin.

Another member of Engage Rhode Island says small businesses are steering clear of Rhode Island because of its fiscal crisis.

AARP is taking some heat on the position it's taking on a bill aimed at returning Rhode Island's state pension system to solvency. The AARP is firmly opposed to the pension overhaul bill because of a provision that would suspend cost of living increases for state and municipal employees for up to 19 years. AARP pension expert Sandy MacKenzie says it would create an alarming decline in retirees' standard of living.

"Even a moderate rate of inflation could reduce the purchasing power of most pensions by 30 percent or more," says MacKenzie.

State Senator Edward O'Neill put this question to AARP officials, "do you have any facts and data that support that a majority of AARP members in fact do not support this legislation?"

AARP state director Kathleen Connell replied, "no, there has not been a survey done of our membership."

Some lawmakers say they've gotten calls from elderly constituents who say that if the pension system is not changed rising property taxes will drive them from their homes.

State and local employees rallied at the state house to urge the general assembly to vote down Rhode Island's pension overhaul, while Governor Lincoln Chafee and Treasurer Gina Raimondo joined a group made up mostly of small businesses calling for changes to the pension. Both groups rallied just hours apart at the rotunda inside the state capitol.

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