Sea of special interests on pensions

A MORE PERFECT UNION? James Mitchell, center, a member of the Rhode Island Federation of Teachers and Health Professionals, protests outside the Statehouse last week. The pension issue has drawn a line between businesses and unions. / PBN PHOTO/HILARY ROSENTHAL
A MORE PERFECT UNION? James Mitchell, center, a member of the Rhode Island Federation of Teachers and Health Professionals, protests outside the Statehouse last week. The pension issue has drawn a line between businesses and unions. / PBN PHOTO/HILARY ROSENTHAL

Measured by the number of different interest groups involved, the fight over Rhode Island’s badly underfunded public-employee pension system may be unequaled in modern state politics.
Politicians and union leaders are making their cases, of course, but so are retirees, businesses, charities and the state’s certified public accountants, to name a few.
“I don’t think that there is anything comparable in terms of scope, in terms of the sheer number of people who it affects and the number of interests it has involved,” said Wendy Schiller, a political science professor at Brown University. “You see that this debate is resonating with the voters more than anything I have seen in 18 years, mostly because unions have made it about unions.”
And whether it is because unions are polarizing these days or the issue simply cuts broadly across society, the debate has made for some unusual allies and enemies.
While spearheaded by a Democratic state treasurer and independent governor, the idea of sweeping pension reform has found support from Republican and conservative groups.
Social service organizations accustomed to joining forces with public-sector unions on policy issues instead find themselves working with businesses, while the unions stand on the other side with retiree groups.
“[Gov. Lincoln D.] Chafee has always been a consistent fiscal conservative, so it is not as surprising to me that conservative groups would support the governor, but it is remarkable when you see providers of social services in the same room as the chamber of commerce,” Schiller said.
“One understands why conservatives would like it: it is about lowering taxes and attacking public-sector unions,” said June Speakman, political science professor at Roger Williams University. “Why the Democrats support it has to do with the real financial burden.”
An example of conservative interest in pension reform comes from the newly formed Rhode Island Center for Freedom & Prosperity, a free-market think tank that has released several widely disseminated papers on pensions, including one that found 3,298 retirees statewide are making more from their pensions then they did at any time while working. “I think the pension debate, as well as the failed economy, is, in my view, traceable back to the big-government agenda,” said center founder and CEO Michael Stenhouse.
The Rhode Island Statewide Coalition, a taxpayer-advocacy group with a small-government focus, has also come out in support of pension overhaul and is arguing for additional help for independent municipal pension plans.
Even members of the Rhode Island Society for Certified Public Accountants has testified in favor of reforms though the organization has not formally endorsed the bill.
So far, the group that’s given the biggest push to the proposed pension overhaul is Engage Rhode Island, an alliance of businesses, chambers of commerce and social service organizations.
Engage Rhode Island has not said exactly how much it has spent on the campaign, but spokeswoman Meaghan Wims said last week that so far it has been at least “six figures” on television, radio and print advertisements.
In addition to advertising, Engage Rhode Island has held one Statehouse rally and hosted one “telephone town hall” event featuring General Treasurer and pension-overhaul architect Gina M. Raimondo.
Precisely who is funding Engage Rhode Island is another question the organization has declined to discuss.
On the other side of the issue, AARP Rhode Island, which represents the state’s retirees, had spent $60,000 as of last week on advertisements pushing back against measures in the pension reform bill that would suspend annual cost-of-living increases for retirees, spokesman John Martin said.
Martin noted that AARP is not “anti-reform,” and only opposes what it sees as a disproportionate burden for fixing the system placed on current retirees.
“We are still urging lawmakers to work toward a better solution that does not place the burden of reform on the backs of current retirees,” Martin said. AARP did not participate in a union rally against the pension bill held at the Statehouse on Nov. 8, two days before scheduled House and Senate committee votes on the reform bill.
An amended version of the bill first proposed by Raimondo and Chafee last month intends to reduce the state’s $7.3 billion unfunded pension liability to $3.9 billion and avoid tax increases for the coming year.
To do this, the plan proposes freezing annual retiree cost-of-living increases, raising the retirement age and creating a new hybrid retirement plan that combines both defined benefits and defined contributions.
The most visible opponent of the Raimondo-Chafee bill has been the alliance of labor unions called the Rhode Island Retirement Security Coalition, which organized the protest rally of several thousand union members last week.
Waving signs saying “honor the contract,” “keep the promise,” and “the 1 percent are behind pension reform,” protestors heard union leaders urge them to fight on.
While supporters of pension reform have described union money and influence as the biggest threats to passing pension reform, union leaders see themselves as underdogs to the corporate interests backing the bill.
“They have all the money in the world,” J. Michael Downey, president of American Federation of State County & Municipal Employees, Council 94, told Providence Business News before the rally. “But we have dedicated public employees. Our advertisements are what we do for cities and towns every day.”
While the Retirement Security Coalition as a whole has declined to discuss how much it has spent on the pension issue, Downey said so far AFSME has spent in the neighborhood of $50,000 on advertising, outreach and rallies.
George Nee, president of the Rhode Island AFL-CIO, said he expected to be significantly outspent by pension-reform supporters such as Engage Rhode Island, but feels he has “a sense of cause and justice” on his side.
The Retirement Security Coalition has asked lawmakers to amend the bill to keep the retirement age where it is, provide a “fair” cost-of-living increase to retirees, protect the lowest-paid workers and abandon any measures targeted to changing municipally run pension plans. They have also suggested re-amortizing the state’s unfunded liability over 30 years. Raimondo’s aggressive push to overhaul the state’s pension system has raised her profile both inside and outside Rhode Island and made her one of the most closely watched politicians in the state.
During the third quarter of this year, Raimondo raised more than $224,000, giving her a campaign war chest of more than $513,000, one of the largest of any Rhode Island politician.
But unlike most Democrats who run for statewide office, Raimondo’s latest campaign reports show no contribution from unions.
“The amount raised is an indication that people are supportive of taking action on comprehensive pension reform. Solving this issue is about moving our state forward,” said Raimondo spokeswoman Joy Fox.
After scheduled committee votes on the amended reform bill last week, the full General Assembly is expected to take up the bill for a final vote as early as this week.
As the process picks up steam, pressure is likely to be greatest on those Democrats in the General Assembly who have enjoyed union support in the past and are in a position to amend or slow down the Raimondo-Chafee bill before it comes to a final vote.
But according to Schiller, unions should be careful about going after former allies who don’t back them on pension reform, because the alternative, a well-funded Republican push for General Assembly seats in the next election, could be worse.
“The problem for unions is this is a one-party state and they don’t have anywhere else to go,” Schiller said. “The pension issue is enough to make people run [for office]; it could mobilize conservatives. If I was a wealthy Republican who wanted to bust unions, Rhode Island could be an inexpensive example for the rest of the country.
“Unions can win short-term victory here, but it might be a long-term defeat,” she said. •

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