PROVIDENCE, RI – A tentative cost-cutting agreement between the City of Providence and municipal unions will move Rhode Island's capital away from a possible bankruptcy. The deal requires approval by unions representing current workers and retirees.
The tentative agreement will save more than $18 million a year. The pact suspends pension cost of living adjustments for 10 years and eliminates compounded COLAs of 5 and 6 percent. It also moves retirees older than 65 into Medicare. Mayor Angel Taveras says he's cautiously optimistic.
"This deal, if approved, I believe not only solves our pension system, but saves our city and that to me is the most important thing," Taveras says. "It's comprehensive, it's something that we're looking at the long term."
The agreement was struck after a Superior Court judge called on the city and labor unions to mediate a dispute over moving retirees into Medicare. Taveras says the deal may serve as a model for other struggling cities and towns.
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