Update on Rhode Island Pension Thefts

I was sitting at a bar with an old friend and former state employee and the conversation shifted to the pension disaster in Rhode Island. I was surprised to hear that the retiree was not as concerned as I was about the loss of our COLA for 19 years. I asked him if he knew how much money he would be losing if the courts don't reverse the pension theft. He responded around $40,000. I was shocked. He had not really looked at the issue in depth. When I told him he is actually losing around $400,000, he gasped. I explained the additive nature of the theft. I'm left wondering how many other retirees are not doing the math.

I guess a lot of smart people are not thinking mathematically, but you can bet your last penny that Gina Raimondo knows the bottom line. The Rhode Island legislature, Gina Raimondo and Lincoln Chafee must really like following in Bernie Madoff's footsteps. $Billions are being stolen from the retirees.

After having another conversation with a different retiree that I respect for her dedication to her profession, I became more concerned about the thought process of retirees as a whole. In this conversation, my friend stated that she is glad the issue is behind us and we will never have to face this problem again. I chuckled and told her that she needs to remember how government works. Once government goes to "the well" for money to bail out their pet projects, they spend all the money and face the exact same dilemmas a few years down the road. When resources dry up, politicians continue to return to "the well". This is the nature of politics as we know it.

I ask you, do you really think this is the end of it? Can't you see the politicians 4 years from now demonizing the public retirees again because they get "exorbitant" pensions? I explained to my friend that this is the very reason why the court has to put a stop to the theft now.

I was a big supporter of Lincoln Chafee when he ran for Governor. At one point he was asked in a union setting his position on the public pension debate. Chafee's response was; a promise made is a promise kept. Chafee went back on his word. Raimondo said at the beginning of the process that all parties would have to pitch in to solve the pension crisis. Raimondo went back on her word. The entire solution was laid in the laps of the retirees and current public employees. No new tax solution was even debated to assist the state with keeping its promises.

Bottom line: Chafee is not trustworthy and Raimondo is not trustworthy. Hope lies with the courts and the unambiguous language found in the Rhode Island Constitution. What these crooks did is not constitutional and all public employees should not rest until the court draws the line. Retirees and public employees should not grow complacent and let the thieves get away with it. If our politicians get away with this one, they will most definitely come back to "the well". Mark my words!!

tomtoak

Anti-Union = Anti-American

In a country filled with political braggadocio, politicians that despise unions are UN-American. I am sick and tired of listening to people blast unions. The landscape in America today has 1% controlling a near majority of wealth in this nation while the middle class struggles to pay the bills, put kids through college and plan for a decent retirement. When will the 1% be happy? When they control 100% of the wealth? Are we all to return to slavery - working our entire lives to enrich our owners. Now just imagine what this country would be like if there was never a union.

Unions have fought for the middle class and stood up to the powerful interests that could care less about worker health, safety, security and retirement. The system has been tipped too far in favor of the wealthy and this needs to change. Take for example the pension systems of private companies. Thanks to our enlightened Congress, pension plans of private corporations are company assets that can be leveraged in favor of the big money interests. When the corporation is sold, the pension plans frequently get stolen leaving the workers with little and the Federal Government partially filling the void. We subject ourselves to constant bailouts of industries that want to do business overseas so they don't have to pay taxes here at home and their actions are always at the expense of the working stiffs.

To get to my primary point, anti-union is anti-capitalism. Why in a free society can't workers organize to argue for justice in the work place? Unions have found a capitalistic niche that should not be overlooked. While unions collect dues from workers, they serve as a leveling force in our society. As unions falter, so will the middle class. Let me think of a government system that hated unions and outlawed them: How about communism? The Scott Walkers of our country, most Republicans and the fanatic radio talk show fringe would turn this country in the direction of communism. I'm serious, there are those that feel that outlawing unions is a good thing. There are those that feel that autocratic rule is the way to get things done. The way to keep the rich rich and to hell with anyone else.

Let's get one thing straight, unions are capitalistic ventures and free marketeers ought to be supporting their role in our society. Management at the negotiating table represent the many (stock holders and monied interests) while unions represent the workers. Unions have a way of leveling the playing field and Americans need to understand their importance to the middle class. Remove unions and we are far closer to totalitarian rule. If you oppose unions, you do not support free market systems. If you believe that the wealthy have a right to make their millions while workers are silenced, then you are anti-American.

We just witnessed another step towards autocratic rule in Rhode Island when General Treasurer Gina Raimondo pushed her pension reform legislation. She did not even consider negotiating with unions. She could not be bothered. Again; I tell Rhode Islanders and Americans, be careful what you wish for.

tomtoak

Profiles in Cowardice

I want to make it clear that what I am about to say is not meant to reflect on those legislators that voted against the Raimondo-Chafee pension reform bill that was passed last week in Rhode Island. I give a special thanks to my local representative, Scott Guthrie, who did the right thing.

The rest of you are truly profiles in cowardice! You have fixed nothing. You have gone after the middle class in this state with a hateful, shameful, immoral and illegal strategy that will put a stranglehold on our state's future. You are asking 50,000 individuals to come up with the $ billions to bail out over 1 million people. You have not lived up to your oath of office; you are thieves and you lack the intelligence to ask the appropriate questions.

Reneging on your oath of office is quite despicable. You all took an oath to uphold the constitution of the state: Am I right? The RI Constitution insists that no ex-post-facto law may be past regarding any contract(Article 1: Section 12): Am I right? The Constitution further stipulates that all taxation will be fair and equitably distributed(Article 1: Section 2): Am I right? To date the superior court has ruled that pensions are in fact contracts and the COLA is a part of that contract: Am I right? You ignored the court's ruling and voted for a bill that, to the best of your knowledge, was unconstitutional: Am I right? You choose to pass a law that uses absurd assumptions regarding the longevity of retirees (87.6 years): Am I right? You choose to tax public employees only, an act so outrageous that the average state retiree ($27,000 annual pension) will lose over $180,000 during a 19 year period: Am I right? You ignored your oath of office by not upholding the Constitution: Am I right? You should all resign immediately: Am I right? You will not resign: Am I right? You are cowards: Right!

General Treasurer Gina Raimondo said in the Providence Journal that as she looked out her window, she felt good knowing that the teacher below will have a pension one day. She was proud of the fact that the system which was less than 50% funded is now over 60% funded. I have news for her! Change the longevity assumption back to a reasonable figure and the pension fund will be 80% funded so the promises made to public employees can be kept.

I just read an article in the "Science News " magazine, February 26, 2011 (this information was available to Raimondo). The title; "U.S, falters in life expectancy gains", discusses the United States falling behind other developed countries in life expectancy gains. The average life expectancy for those over 50 years of age is 79 for males and 83 for females. How dare you rob our future without the appropriate questions being asked.

I hold no allegiance to thieves and I really don't like cowards. Have a nice Thanksgiving.

tomtoak

Is Rhode Island being lied to about pensions II?

OK: The title says it all. We continue to learn about more lies to Rhode Island regarding the proposed pension changes of Governor Chafee and General Treasurer, Gina Raimondo. This article follows a previous article posted on October 4, 2011 in this blog.

First and foremost, we now learn that the General Treasurer is using 87.6 years as the projected life expectancy of the average retiree. No wonder why she says that the state contribution to the pension has to increase to 35% of salary. How truly foolish is this? The U.S. government says the age should be 78 years. (I'm not linking a source because I read this in the Providence Journal and I do not want people to migrate to that site to make more money for that rag). I just attended a Bar Mitzvah where the oldest person was 85. She was frail and had trouble walking because of a previous stroke. While we all know some people that make it past 87.6 years, start counting all of the people you know that did not make it to that age.

Here is another lie to confuse the issue, courtesy of the Providence Journal. A recent article listed "myths" surrounding the pension system. One myth that they tried to tackle involves issues surrounding the state's required contributions. The Journal clearly states that this issue is simply not true, the state made all of its contributions except for some $60 million in payouts to rescue the wealthy in this state during the banking crisis (they didn't say the "wealthy" - I did because our Governor chose to meet all obligations in bank accounts that exceeded $100,000). Your public employees paid for your bailout.

Here is the rub! Even the General Treasurer has the intelligence to say the following: "The state made contributions "as required by law" (note the quotation marks). When I was working budgets, I was livid when Governor DiPrete tapped into the pension contribution for the first time. I remember seeing half of the state's contribution disappear. This trickery continued during the Sundlun administration and yes, they cooked the books to please the legislature. Gina Raimondo is right when she says that unrealistic numbers were used to justify the state's robbery of its pension accounts. The robbery continued. Don't tell me that the state always made it's contribution. When union bosses have robbed the pension accounts of its members, people go to jail. Nobody in this country has been jailed for pulling corporate pension funds or public pension funds. The Journal rag is lying to everyone when it refuses to make this point perfectly clear. The Providence Journal was absent from these facts at a time when it needed to let the public know. We all know that the Journal wanted to be absent because they never liked public pensions because it makes their newspaper operation look cheap in their worker's eyes. The state did not meet it's pension contribution for over 2 decades. The employees made every contribution and also took a 20% pay cut to bailout the banks. We bailed out the banks with our pensions and our salaries. Thank you very much!

Additionally, the $60 million that the Journal seems to brush aside today would be approximately $232 million out of the projected $7 billion shortfall that Raimondo is claiming because we are all going to live to be 87.6 years of age. Yea!

tomtoak

RI General Treasurer's pension plan will devastate businesses

It's curious why General Treasurer, Gina Raimondo would propose her pension reform act before the RI Supreme Court rules on the constitutionality. To date, she has lost in the courts. After seeing her jubilant waves to the "Engage Rhode Island" rally and her refusal to speak to the retiree rally on October 26, 2011, it became clear to me that she only cares about her political future. She should have been saddened by having to be the instrument of broken promises. The jubilation was a shameful act.

The Providence Journal’s pension reform chart (COLA Wars, October 27, 2011) tells an interesting story. Raimondo’s plan is the largest business killing legislation that anyone could dream of. How can the Rhode Island business community and the Governor wave the flag?

The average state retiree will have a cumulative income loss of between $185,500 and $139,386 and the average public school retiree will experience a cumulative income loss of between $227,406 and $146,464 over the next 19 years. With over 50,000 retirees in the system at any one time, the loss to Rhode Island’s economy will be close to $10 billion during the next 19 years. Now let’s assume a subset of retirees is pissed off enough to move out of state. If 20,000 people with their spouses move to states without a state income tax and the family income is $60,000, the state’s economy will be losing an additional $1.2 billion each year. Over the 19 years the total loss to the state’s economy could be well over $30 billion. Make a COLA adjustment but don’t eviscerate retirees and businesses.

I’m glad I don’t own a small business in Rhode Island. If I did I would be fighting this legislation. Be careful what you wish for.

tomtoak