We’re Number One! We’re Number One!

Here in Rhode Island, the littlest state in the nation, we don’t get to say we’re number one very often. But here’s our chance: right now it appears that we’re number one in the country for screwing the public sector worker out of long-term financial security. From the Associated Press:

Despite jeers and the threat of a lawsuit from public workers, Rhode Island lawmakers on Thursday night approved one of the most far-reaching overhauls to a public pension system in the nation.

The proposal is intended to save billions of dollars in future years by backing away from promised benefits to state and municipal workers in the state-run pension plan. Lawmakers called Thursday’s vote one of the most wrenching they’ve had to cast, though the fight may not be over if unions follow through with promised lawsuits.

When I look around the street I live on, which is a modest street in its home values, I see a lot of my neighbors who are going to be impacted by this. The cumulative loss of the additional cost-of-living increase might well cost some of these individuals their homes someday. These are teachers, administrative workers, and security workers for the state, just to name a few.

Treasurer Raimondo’s response for why EngageRI, the organization that supports her agenda, does not need to disclose its financial backers is because pension reform “benefits everyone.” This is just a bald-faced lie. A large percentage of our state’s workers just lost a big piece of long-term income security. They are now going to have to clamp down on spending and save more to fund their own retirements. These are people who will not be able to give to nonprofits or support that local band fundraiser or go out to eat but once in a blue moon to save the extra money.

If we want to benefit everyone, we need to take from those who have too much. The “too much” line in my mind gets drawn when we are talking millions and billions in income and assets. When enough people finally realize what is going on and the top 5% start to pay their share again, we might have enough money to rebuild our country. But by then, we may be too far gone.

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11 responses

  1. Kiersten-I have my differences with what was done in the GA.My approach would’ve been different-and my State Rep voted against it.He and I share similar social conservative views,but also realize that there needs to be some more realistic approach.
    I am a retired Federal employee-our system was changed before things got critical-I am on the old system and I’d be a hypocrite to support a vested employee or retiree being screwed on benefits where they have earned some equity-keeping in mind there are abuses on the receiving end also.
    Particularly in regard to ‘disability’ retirements-I got hurt pretty bad a few times on my job and never considered disability retirement.
    Another thing-when taxes go up it seems middle class people like myself get screwed in the realm of property and car tax-do you disagree?
    My wife and I have never made six figures in gross income in our lives.we pay enough right now.It’s not used properly either,which is the biggest problem.
    I do take disability payments from the VA for Vietnam related problems(physical)and will never apologize to anyone for that.
    the premium was prepaid.LOL.
    Have a nice Thanksgiving.

  2. Happy Thanksgiving, Joe! Eat lots of fresh vegetables over the holiday!

    1. Always do-the canned stuff is loaded with sodium.
      Fresh stuff is best boiled or steamed.

  3. BTW my wife makes a puree of butternut squash,carrot,and onion-no sugar or anything else added-really good.
    Also half Yukon Gold potato and half squash mashed.

    1. mmmm….nom nom nom….Sounds good.

  4. Some in my family are affected by the pension cuts. It’s tough after thirty years of committed work to be told that the retirement age is raised and pension cut.

    1. I think the changes should have been directed at those with less than 10 years on the job and prospective hires.
      A COLA freeze for 5 years with a new COLA based on the Social Security COLA might have been more sensible.
      People already retired have held up their end of the agreement-changing it after the fact isn’t right.

  5. If I may, I offer the following on the topic of pension reform for your consideration:

    http://www.cranstononline.com/stories/Zero-sum-game,64861?category_id=56&town_id=3&sub_type=stories

    As for Thanksgiving stuffing, my paternal grandmother had a Belgian recipe that was passed down through my parents, and finally to me. This is the first Thanksgiving that my dad won’t be here to make it for us. So it finally is up to me!

    I’m tempted to recite the Shepard’s prayer immortalized by Tom Wolfe.

    Happy Thanksgiving everyone.

  6. Yes,everyone have a nice Thanksgiving-it seems like evryone celebrates it.

  7. “The cumulative loss of the additional cost-of-living increase might well cost some of these individuals their homes someday.”

    I’m dubious of that. First of all, the jobs we’re talking about are working-to-middle class salary, and the pensions take 20-30 years to be vested in. People should have already paid off their houses by the time they retire, that’s Common Sense. Second, a fixed mortgage stays the same price, regardless of inflation or cost-of-living. Why should we build the default system to provide for the people receiving the benefit to behave fiscally irresponsibly on many levels? These employees already have great health coverage, steady reasonable paychecks, and great job security, I’m not sure they’re facing the same risks the rest of us are in terms of ‘reasons to get a second mortgage’.

    I don’t have a problem with a COLA, but pegging it to 3% seems absurd from any perspective. It should be indexed to the actual cost-of-living, minus a share used for ‘housing’, because we can assume that after a lifelong career, you’ve paid-off your home.

    Also, where exactly are we supposed to get the money to pay for the retirees int he cities and towns? The only revenue streams they have that are worth speaking of are property taxes. The state could raise income taxes, but I don’t think we can go very far before people decide that nearby MA or CT have just as nice beachfront property.

    My impression is that Rhode Island’s pensions have been far too generous. The two folks I know who are retired from state plans are in their late 70s now, both have half-million dollar houses near the beach, several cars, and one has a big boat. I’m not kidding. If you pay off your home during your career like you’re supposed to, 66% of a $50,000 job, plus a 3% annual raise, plus health coverage puts you into a pretty well-off place.

    And Happy Thanksgiving, folks!

  8. “When enough people finally realize what is going on and the top 5% start to pay their share again, we might have enough money to rebuild our country.”

    Interesting. Originally it was ‘billionaires’, then it was the ‘top 1%’, and now we’re talking about taxing the ‘top 5%’. Do you know who constitutes a household in the top 5% in Rhode Island? Any married combination of the following: top-step teacher, fire lieutenant, Fire Dept EMS operator, Police officer, various state office jobs, etc.

    The point of entry to the top 5% is $166K for a family or $100K for an individual (http://en.wikipedia.org/wiki/Affluence_in_the_United_States#Top_percentiles).

    Don’t get me wrong, I’m all for taxes that pay for what we get, even if they’re higher. Just be careful, because you might be advocating taxing the very populations you’re trying to help.

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