Governor Chafee has a lifesaver for distressed communities. Now the question is whether the General Assembly will allow them to use it.
Chafee chose the City of Pawtucket, which like Woonsocket, Providence, East Providence and an increasing number of communities mired in financial woes, to unveil his legislative package to give distressed communities a variety of measures to reduce costs.
A key point, if approved by state legislators, the laws would not take such steps as suspending pension cost of living adjustments (COLAs), reduce disability payments to police and firefighters to as low as 50 percent of pay, eliminate school bus monitors, suspend teacher-pay step increases and a host of other provisions cities and towns have either been locked into by state mandate or union contracts.
Indeed all of those measures could be taken to provide relief to municipal taxpayers, as Gov. Chafee intends. What’s important for state legislators to recognize is that the laws give the councils of distressed cities and towns the power to enact the measures (Some of the pension proposals such as that on disability pensions are not restricted to distressed communities). This is a tool, not a mandate, for municipalities to right the dangerously listing ship of government. Their mere presence may be sufficient for administrations to strike new contracts that reduce, or eliminate, bloated pension payments.
If legislators question whether municipalities should have such powers, they need only have listened to Robert Flanders when he addressed the Rhode Island Statewide Coalition two weeks ago. Receiver for the bankrupt city of Central Falls, Flanders dispelled the stigma of bankruptcy, saying it is the best means of freeing the bounds from drowning municipalities. And how might it impact those who have invested their careers into working for these municipalities and now look to their pensions to support them in retirement?
Communities must be sensitive to those who have provided services and been a part of building for the future. They should not be cast aside because municipal leaders in their ignorance or zeal to be reelected made promises impossible for future generations of taxpayers to keep. Yet these retirees and the unions representing current employees must recognize the ship is top-heavy.
Flanders summed it up succinctly: “It’s either a haircut or a beheading.”
We would apply his analogy to what legislators face with Chafee’s municipal legislation and those few options municipal leaders now have. Either give local leaders the ability to perform a haircut, or expect more bankruptcies.