National perspective: Raimondo win a defeat for R.I. unions

GINA M. RAIMONDO'S victory in Tuesday's Democratic primary for governor of Rhode Island is seen on the national scene as a defeat for the public employee unions that opposed her candidacy.  / PBN FILE PHOTO/RUPERT WHITELEY
GINA M. RAIMONDO'S victory in Tuesday's Democratic primary for governor of Rhode Island is seen on the national scene as a defeat for the public employee unions that opposed her candidacy. / PBN FILE PHOTO/RUPERT WHITELEY

WASHINGTON – R.I. General Treasurer Gina M. Raimondo, who helped push through changes to the struggling employee retirement system, won the Democratic nomination to run for governor of the nation’s smallest state in November.

The 43-year-old former venture capitalist captured 42 percent of the vote in Tuesday’s primary election, according to the state Board of Elections. Providence Mayor Angel Taveras received 29 percent, and Clay Pell, the grandson of a late U.S. senator, trailed with 27 percent.

“Rhode Island showed that it’s ready for a governor who’s going to turn this economy around,” Raimondo told supporters Tuesday night. “I’ve shown that I’ll be a governor with the courage to tackle our toughest problems.”

Raimondo gained support for persuading lawmakers to overhaul the state government pension system by raising the retirement age, suspending cost-of-living adjustments and putting workers into 401(k)-type plans. The steps, forecast to save $4 billion over two decades, proved popular with voters, even as they drew opposition from public employee unions that are traditionally a force in Democratic politics.

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Rhode Island is among the few states where an incumbent governor isn’t running for re-election, after Gov. Lincoln D. Chafee, a Republican-turned-independent-turned-Democrat, decided not to seek a second term. Others include Maryland, Texas and Arizona.

Raimondo in November will face Cranston Mayor Allan Fung, who won the Republican primary. While President Barack Obama was supported by 63 percent of Rhode Island voters in 2012, the state hasn’t elected a Democrat as governor since 1990.

Union defeat

The primary results are a defeat for state employee unions, which threw their support behind Taveras and Pell, a political newcomer who used his personal wealth to finance his campaign. That divide helped Raimondo by leaving her without a rival unanimously endorsed by the unions representing teachers, firefighters and other government employees.

The campaign was focused largely on how to revive an economy once driven by factory jobs that disappeared as production moved elsewhere. The New England state’s unemployment rate was 7.7 percent in July, tied for the third highest in the nation.

Raimondo said she would seek to boost manufacturing and pump more money into aging roads and other infrastructure.

A Rhodes Scholar and graduate of Harvard University and Yale Law School, Raimondo co-founded a venture capital firm, Point Judith Capital. After being elected state treasurer in 2010, she led a push for changes to Rhode Island’s retirement system for state and local government employees.

Pension pressure

The state faced growing pressure to put more money into its pension fund after years of failing to set aside enough to cover promised benefits. The issue surfaced just as Rhode Island’s finances were being squeezed by the worst recession since the 1930s.

Pension shortfalls in 2011 pushed Central Falls to become the state’s first city to go bankrupt. Its retirees were eventually forced to accept cuts to their retirement checks.

In November 2011, the legislature passed Raimondo’s recommended changes, which actuaries estimated would cut $3 billion from the pension shortfall and $274 million from the annual taxpayer contribution. While the provisions are now in effect, unions are asking a court to throw them out.

The changes drew national attention to Raimondo and backing from voters who saw it as a sign of her willingness to take on powerful political interests.

‘Pretty upset’

“The union members are pretty upset, but the general public is pretty happy about it because they feel that it’s saving millions of dollars for the state,” Joe Fleming, the president of Fleming & Associates, a Cumberland polling firm, said before the polls closed.

The pension overhaul became an issue in the campaign as Taveras sought to portray Raimondo as a tool of Wall Street. He ran TV ads criticizing “Wall Street values” and faulted Raimondo for reducing pension benefits at the same time that she was putting more of the state’s retirement money into hedge funds that charge higher fees than traditional investments.

Gino Piccoli, 82, a retired factory worker who supported Raimondo, said he was unconvinced by that portrayal.

“She’s for the people,” he said. “The other guys, they’re all in someone else’s pockets.”

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