Treasurer briefs lawmakers on pension woes

Rhode Island lawmakers waded into state government’s most dizzying fiscal problem Monday ahead of a special legislative session dedicated to addressing the rising costs of public pensions.

State General Treasurer Gina Raimondo and other pension experts briefed members of the state Senate on the complicated numbers behind the pension problem. Raimondo told lawmakers that the system is eating up more and more tax dollars and that inaction is no longer an option.

“This is a crisis we have to solve,” said Raimondo, a Democrat. “There won’t be money for anything else unless we fix this.”

The General Assembly plans to convene a special legislative session next month to examine options for reforming the pension system. On Wednesday, the House and Senate finance committees begin a series of pension hearings ahead of the session.

Estimates put Rhode Island’s unfunded liability for public workers’ pensions at $7 billion, slightly less than the entire state budget for one year.

Last year, the state paid out more in pension benefits than it collected in pension contributions, a troubling situation that Raimondo called a “death spiral.”

If nothing is done, the annual taxpayer contribution to the retirement plans of state workers and teachers is projected to grow from $319 million per year in 2011 to $765 million in 2015.

Raimondo said she is working on a series of proposals for consideration but offered no details on the specifics. Cuts to benefits, higher retirement ages and changes to the cost share between employees and the state are all on the table.

Senators at Monday’s briefing said they want to see proposals that will create long-term stability and are fair to both taxpayers and public employees. Sen. Walter Felag, D-Warren, acknowledged that it’s a tall order.

“It’s going to be very difficult,” he said. “A lot of the current retirees retired with the assumption that their benefits will be there.”

State workers aren’t sitting out of the debate. Unions representing public teachers and state and municipal workers have formed the Rhode Island Retirement Security Coalition in anticipation of the pension debate. One of the coalition’s leaders, Rhode Island AFL-CIO President George Nee, said the group is anxiously awaiting Raimondo’s proposal.

“Right now it’s difficult for us to react because we don’t know what they’re going to consider,” he told The Associated Press. “We’re not naïve. We know it (the pension system) is a real problem. We want the system to be sustainable too. The solution has to be shared.”

Senate President Teresa Paiva Weed, D-Newport, said lawmakers will do their homework to ensure they don’t shy away from a problem that’s been brewing for years.

“It’s a little bit like the first day of school,” she said of Monday’s briefing. “The decisions that are going to be made are going to be difficult ones.”

Article source: http://www2.turnto10.com/news/2011/sep/12/12/ri-treasurer-to-bried-lawmakers-ar-734260/

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