Election 2012: State Senate candidates discuss pension reform

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As part of our ongoing coverage of Election 2012, The East Providence Post and eastprovri.com will be engaging candidates for office at both the state and local levels for their thoughts on some of the most pertinent issues facing the city and Rhode Island as a whole. The following question was emailed to the candidates running for seats in the State Senates from East Providence’s three districts — 14, 18 and 32. Candidates were not limited in their response, nor were their answers edited for content.

The Post: Pension reform is a key issue in this and future campaigns. Is the direction the reform is headed the correct one? If not, what are two or three key components you would introduce to help improve the legislation?

Sen. David Bates, Republican incumbent and unopposed for District 32: “While we had made some adjustments to the pensions several times in the past, I believe the reform we made last fall will fix the system permanently. However there are many local systems still in trouble and I believe we need to address those.

“When the actuarial studies are complete we need to look at the ability of the local system to suspend COLAs (cost of living adjustments), suspend mandates and make sure pension payments are made on time.”

William Conley, Democrat and unopposed candidate for District 18: “The Rhode Island Retirement Security Act of 2011 is the product of courageous leadership from General Treasurer, Gina Raimondo, Senate Finance Chair, Senator Daniel DaPonte, and House Finance Chair, Representative Helio Melo that puts the public interest before the special interests and self interest. State and municipal workers deserve a safe retirement with a secure pension. Our citizens and businesses deserve a stable, predictable tax rate to support a robust economy that is conducive to job creation.

“In 2011, Rhode Island had one of the lowest funded pensions and suffered from the second highest unemployment rate in America. The pension liability and payment of the Actuarially Required Contribution [ARC] exerted continuous and unsustainable pressure on the State and municipal budgets. “The solvency of the pension system for current and future retirees was at risk. Annual contributions to the retirement system which includes state and municipal employees, teachers, judges, and State Police more than doubled from 2005 to 2010. Continued payment of the ARC placed a crushing financial burden on all taxpayers while strangling the ability of the State and municipalities to maintain adequate funding to support essential services and invest in infrastructure maintenance and improvements. The 2011 Pension Reform Legislation sets our State on a new course to protect public pensions in a fiscally responsible manner.

“If pension reform is not protected, the State will be forced to send a bill to Rhode Island cities and towns of approximately $102 million, including $6.8 million to Pawtucket and $4.5 million to East Providence. Obviously, neither city can afford that kind of hit to its budget.

“The Act also mandates that local public safety pensions perform studies and adopt updated standards that are recommended by professionals. This will begin the due diligence necessary to understand and address the financial status of these pensions throughout the State.

“Rhode Island recently finished last in a CNBC survey rating states on their business climate. We need to focus like a laser on turning that around, and a viable public pension program is one very big stride in the right direction.

“Unless empirical data based on fact dictates correction, we must stay the course and keep our promise to our state and municipal workers and retirees, citizens, and businesses that Rhode Island is serious about getting its fiscal house in order.”

Daniel DaPonte, Democrat incumbent for District 14: “Pension reform has been one of the most significant and important issues during my time in the General Assembly. As Chairman of the Senate Finance Committee I served as the point person on the pension reform legislation and was a key participant in its passage. The fact is that the system that was in place was simply not sustainable.

“People are living longer and state and government employees are no different. The changes that were made, while difficult, were necessary. At one time there were more contributors to the retirement system than beneficiaries. This has no longer been the case for some time. The reform that is now in place still provides our public employees with the financial security of a pension, but also shares the responsibility to save and manage for retirement with the employee. Prior to the pension reform, our unfunded liability or ‘pension debt’ was $7 billion. With a total state population of one million and a working population that is much smaller, Rhode Island taxpayers could never pay that much.

“With the pension reform that I supported and was passed, this debt was cut in half. This is just one example of the decisions that need to be made in the near future for our state to remain solvent and our citizens to prosper.”

Roberto DaSilva, Democrat challenger for District 14: “Pension reform isn’t ‘headed’ anywhere. The reform has been made. It was presented to the General Assembly and to state and municipal employees as my way or the highway. Alternatives were brought up and quickly dismissed by those rushing this reform through. There was little chance for input from legislators or public employees.

“I fear that this reform is fragile and may yet fall apart. The workers have already filed lawsuits challenging the reform as a violation of contract law. Should they prevail this reform will cost taxpayers millions in damages, and put us right back where we started. Additionally the pension system continues to be weakened by significantly reducing the contributions from employees. This will result in significant loss of revenue to the pension fund. If the fund returns aren’t what they should be we could be sitting on the next pension disaster.

“What this all means is that all we’ve got is a fragile cease-fire, not a lasting solution to the problem. People can pat themselves on the back about it now but when it falls apart next year, will our state have been well served?

“Providence recently showed us what can be done when the administration works with its unions to come up with an agreement on pensions. The unions offered enough concessions to help the city make its budget, and they did it in a way that means they won’t spend a minute in court. I don’t understand why that approach was never on the table with the state pension systems, but it wasn’t.

“We really can’t speculate about specific legislation until the courts rule on the pension reform law, but there were a couple of important things left out of the reform. There are people in the system that never paid the actuarial cost of their pensions, former legislators, judges, and insiders who got special deals. People who spiked their pensions with last minute lucrative pay increases. The law continues to unfairly treat certain classes of employees, despite performing the same job, more favorably than others. Legislation addressing those inequities would be a great start.”

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