As they say, timing is everything. And in this case, it’s just a little scary.
On April 29 General Treasurer Seth Magaziner issued a report making clear that cities and towns of Rhode Island still face a massive problem of underfunded pension plans.
According to the report, the 35 locally administered pension plans (some local pension plans are administered by the state at municipal request) carry a total unfunded liability of about $2.5 billion. It doesn’t take a genius to realize that at some point, just as the state did with state employees and teachers earlier this decade, changes to the plans must happen.
At about the same time, legislation is making its way through the General Assembly that would guarantee firefighters across the state overtime for hours worked that defy U.S. Labor Department guidelines, along with a proposal to automatically extend existing contracts for municipal employees and teachers until a new agreement is reached.
In both cases, the options of doing nothing are simple and onerous: massive tax increases or municipal bankruptcies. Neither is acceptable.
