Pension reform, and an example of "brave thinking"

There are structural development issues which lead to inadequate city revenue in Pacifica. But city employee pensions are one item which also contributes to the economic drag. The following is an example of  serious public employee reform initiated from the small state of Rhode Island.

Gina Raimondo, RI Treasurer:  "Is math."

The Atlantic magazine/Don Peck, November 2012.  "Gina Raimondo, general treasurer, State of Rhode Island."

"Once upon a time, politicians across the land found a magical formula for achieving popularity. They kept public employees’ pay low, enabling low tax rates (hooray!); to make up for the low pay, they promised fat pensions down the road (huzzah!). The pensions were funded by gimmicks and wishful thinking. But that would be a problem for future politicians to reckon with.

Once I eat all the gum balls, how many left?

Raimondo is one of the first to perform that necessary reckoning. Last year she led an unprecedented reform, raising the retirement age (to 67), freezing cost-of-living increases, and adding a 401(k)-like plan to the traditional (shrunken) defined-benefits plan.

Raimondo, a Democrat, says she ran for office largely to perform this thankless task. The state’s pension payments were crowding out spending on things like libraries and public buses—services she depended on in her youth. Amid the pain and the blame, Raimondo focused on the math, recognizing two things: That waiting longer would mean harsher adjustments for all, including the public workers themselves. And that the state has a duty not only to the past, but to the future as well."  See The Atlantic brave thinkers.

Submitted by Alysanne McGaffey

Posted by Kathy Meeh