- Associated Press - Tuesday, February 18, 2014

PROVIDENCE, R.I. (AP) - Rhode Island mayors on Tuesday blasted the closed-door talks that yielded a proposed settlement in the legal challenge to the state’s 2011 pension overhaul, complaining that they weren’t consulted about a proposal that will cost local taxpayers millions.

Several local leaders also urged Gov. Lincoln Chafee and state lawmakers to find ways to help them absorb the cost of the settlement, which would roll back parts of the landmark law to resolve legal challenges filed by public-sector unions and retirees.

The settlement was announced Friday by Chafee and state Treasurer Gina Raimondo. It would restore limited cost-of-living pension increases for retirees and make other less significant changes to the 2011 law. The proposed deal came after more than a year of closed-door talks that didn’t involve state lawmakers or local leaders.

If the settlement is approved by unions, retirees and state lawmakers, it would cost the state and its municipalities more each year in pension costs. Cities would have to set aside a combined $11 million more in fiscal year 2016, and the numbers would almost certainly increase going forward.

The settlement would cost Providence $1.2 million in 2016 and Cranston nearly $1 million. The numbers may be smaller for smaller municipalities, but they will still be a challenge for cash-strapped governments to absorb, according to Johnston Mayor Joseph Polisena, whose town would have to set aside $278,000 to pay for the first year of the settlement.

“It’s a slap in the face to us,” he said. “We should have at least been involved (in settlement talks). We were left out.”

The process behind the deal was also criticized by Cumberland Mayor Dan McKee and Cranston Mayor Allan Fung, a Republican candidate for governor.

Several mayors suggested that the state help the cities and towns pay for the added pension costs. It was an idea seconded by gubernatorial candidate Clay Pell, who said Tuesday that he supports increasing municipal aid to help foot the bill. Pell faces Raimondo and Providence Mayor Angel Taveras in the Democratic primary.

Richard Licht, Chafee’s director of administration, noted that cities and towns are saving millions of dollars each year because of the 2011 law, which suspended pension increases and raised retirement ages. Licht said the deal would avert a costly and uncertain court battle.

The settlement proposal faces a complicated approval process: The settlement must be ratified by union members and retirees before heading to the General Assembly for consideration.

“This is a proposal that has a long way to go,” Chafee told the mayors. “Get your green eyeshades out. … I wouldn’t be presenting it if I didn’t think it was a good settlement.”



Click to Read More

Click to Hide