When Central Falls declared bankruptcy three years ago, one of the largest liabilities on the city’s books was pension obligations. During the subsequent state-supervised workout, many of the city’s retirees saw their pensions substantially reduced. It was a tragedy for those who worked hard to have their expected retirement income so drastically cut.
Last week, Gov. Lincoln D. Chafee signed into law a bill that boosts the pensions of many of those same workers. The state is putting $4.8 million toward the effort, according to a report in The Providence Journal.
As well-meaning as this stroke of the pen was, however, it sets a dangerous precedent. Central Falls found itself on an unsustainable path, one that was paved by unrealistic expectations and poor management. And it is one that has the potential to be repeated throughout the state. Based on this fix, are there any municipal unfunded liabilities that are not now backstopped by the state’s taxpayers?
Did the citizens of Richmond have a say in Central Falls’ governance? Obviously, no, yet they are being asked to pay for mistakes they had no hand in creating.
In the end, it’s about limited resources and representation. Thus, while we are all our brothers’ keepers, we shouldn’t have to pay off all their reckless debts. •
