In what Providence Mayor Angel Taveras calls a historic day, Superior Court Judge Sarah Taft-Carter gave final approval Friday for a deal that will reduce the capital city's $900 million+ unfunded pension liability by $178 million. The agreement followed negotiations between the city and police and fire unions and municipal retirees.
"Today is the end of a long, long road that we've traveled," Taveras said in an interview. "I feel a lot of relief and gratitude to all the employees and retirees especially who have agreed to help the city."
The negotiated deal to bolster Providence's pension fund is a contrast to the state-imposed pension overhaul quarterbacked by state Treasurer Gina Raimondo in 2011. It seems likely to remain topical in an expected Democratic primary fight for governor between Taveras and Raimondo next year.
Despite fiscal progress in Providence, the capital city still faces an unfunded pension liability of more than $700 million; it has also been unable to eliminate a structural deficit, and city taxpayers are bracing for a possible property tax hike in Taveras' next budget.
Regarding the unfunded liability, Taveras said:
"We have a plan to address it over the course of the next 28 years. I know people will say that's a long time. But if you look at any of the recent plans that people talk about, it's over the course of several decades that you can address, so this is a big help. We didn't get into this problem overnight, we're not going to get out of it overnight, but we're moving in the right direction, and that's what we need to do."
In a possible preview some future campaign messaging, Taveras calls the pension agreement "a reminder of what we can do when we come together, when we sit down and work together to try to solve problems. That's something that I'm very proud of. This was not easy. It took a long time as you know."
The Providence mayor points to the pension settlement announced this week by Cranston Mayor Allan Fung, a fellow alum of Classical High and a potential gubernatorial rival next year. "I hope we can be example for other cities, not just in Rhode Island, but hopefully around the country," Taveras says, "in terms of what's possible when you come together and how you can solve problems."
Asked if the Providence resolution will impact the outcome of the legal challenge to the state pension overhaul -- still in mediation -- Taveras called them separate cases. But he said he's glad the state is negotiating with the public-sector unions challenging the pension overhaul. Taveras added, "I'm hopeful the state will be able to find a way to resolve that litigation without added risk for the taxpayers."
Meanwhile, Taveras said he's working to finalize his latest budget. The spending plan will be out in "weeks," he says, and the mayor says he can't guarantee there won't be a property tax hike.
Asked about Providence's lingering structural deficit, Taveras said people "should remember we started with a budget deficit of $110 million, structural deficit [in 2011], and the fact that we're down to about $5 million says a lot ... To go from 110 [million] to 5 [million], that's pretty significant, and we'll finish the job."