Taveras & Raimondo Campaigns Trade Shots on the Pension Settlement

Apr 9, 2014

In a preview of things to come as Rhode Island's Democratic primary grows more intense, the campaigns of Providence Mayor Angel Taveras and state Treasurer Gina Raimondo are trading sharp jabs over the handling of the high-stakes state pension conflict.

Asked whether Taveras supports the ongoing quest for a pension settlement or prefers fighting the case in court, campaign spokeswoman Dawn Bergantino said, "A negotiated settlement is always preferable to a long, expensive court battle. Had Treasurer Raimondo chosen to sit down with labor in 2011, rather than waiting until a court ordered her to negotiate, we may have saved Rhode Island two and a half years of litigation with no end in sight. By contrast, Mayor Taveras was able to help stabilize Providence's pension system by sitting down with our partners in labor and working together to find a common solution."

Raimondo's campaign manager, Eric Hyers, fired back, saying, "Here are the facts: Providence's finances are being compared to Detroit's. The Mayor missed 80% of pension meetings during the first half of his term. The pension fund is seven hundred million dollars short of what it needs to pay retirees and is funded at a lower percentage then when he took office and after his pension 'reform.' "

The comments from the two campaigns offer a sneak peak of themes they'll highlight in bigger, more costly ways as the Democratic primary continues.

The rhetoric also highlights the potential political fallout of the rejection, at least for now, of a proposed pension settlement, supported by Raimondo and Democratic Governor Lincoln Chafee, that was announced in February. Chafee said Tuesday he remains hopeful a deal can be worked out, possibly by leaving out the police group that was one of six to reject the settlement.

The division among Taveras and Raimondo stands in contrast to how Republican gubernatorial candidates Ken Block and Allan Fung, as well as the state GOP, support resolving the pension dispute in court.

“We need to see it, I think the entire state needs to see that go to court," Republican Party Chairman Mark Smiley told RIPR during an interview Wednesday. "It shakes the sovereignty of the state if we allow the courts to dictate that we can’t pass laws like that. So that sets a dangerous precedent."

Smiley continued, "Let's get it into the courts. Let's decide this issue the way it's supposed to be decided instead of having some sort of negotiated deal where the governor and the treasurer try to cut a deal around the General Assembly and there's just a mix-up of the different powers, separations of powers, that we need to make sure that we keep."

When the pension settlement was announced on February 14, Fung came to the state Administration Building on Smith Hill to register his objection with reporters. Earlier this week, after one of six initial groups rejected the settlement, casting it into uncertainty, Fung used a statement to reiterate his call for resolving the pension dispute in court:

"[The] news that the pension reform settlement has been rejected by one group of beneficiaries offers a reprieve for Rhode Island taxpayers, but we must remain vigilant in our opposition to any proposal that would increase the costs to taxpayers or increase the unfunded future liabilities of the pension fund. The proposed pension settlement threatened to impose millions of dollars in added expenses on Rhode Island’s cities and towns without any input from municipal leaders. Municipalities are struggling to balance their budgets and simply can’t afford these added costs.  After the last round of secret negotiations, it has come to our attention that only 28.6% of those eligible actually cast a vote (6,755 votes were cast out of the possible 23,624). Further, as reported, there have been several stories of individuals who never even received a ballot. Obviously, the taxpayers of Rhode Island can not trust this process.”

Block registered his opposition through a March 25 op-ed in the ProJo:

"The recent pension settlement is an embarrassing chapter in Rhode Island’s history. Much has been written about the negative fiscal consequences of the deal. But let’s also consider the process: The General Assembly passes legislation to reform our pension system; then the unions and a small group of Democratic politicians work out an agreement behind closed doors to change the law; and now the General Assembly, which is responsible for writing our laws, is expected to rubber stamp a settlement that it did not negotiate on behalf of a population that cannot afford the settlement."

When the settlement was announced, Chafee and Raimondo described it as preferable to the uncertainty of fighting the case in court, running up lawyers' fees and exposing the state to a possibly adverse ruling. They pointed to how the deal would preserve 94 percent of the savings of the 2011 overhaul spearheaded by Raimondo.