As is too often the case, this year’s General Assembly session starts off with the state projecting a significant budget deficit in the coming fiscal year. What is of much greater import than what the legislature does directly on the budget, however, is what it does on these three issues: pension reform, 38 Studios and bridge tolls.
The legal attack on the 2011 pension reform law that has been the subject of secret, court-ordered mediation may or may not undercut the real progress that was made on fixing the huge unfunded liability for state workers’ pensions.
But one thing we do know is that the pension fix was an absolute necessity. Without the legislation the state and those affected municipalities would owe another $250 million to cover obligations this year alone, an amount that would only grow in the ensuing years. Pension reform must remain in place.
Not paying the debt service on the state-guaranteed 38 Studios loans is viewed by many as a blow against deals that benefit the few at the expense of the many. That may be an emotionally satisfying approach. But it is not rational to presume that there will be no blowback if the state defaults on an obligation.
No one needs to do business with Rhode Island. We are not sitting on a scarce natural resource or some vital intellectual capital that can’t be moved. So why would anyone want to give an investor a reason to look for opportunities that aren’t freighted with so much drama?
As for bridge tolls, the only real pressure the General Assembly should feel is the need to create a robust, sustainable funding formula to rebuild and maintain the state’s transportation infrastructure. We shouldn’t have to experience a catastrophic failure before we take this issue seriously. •
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