It was surprisingly easy for public sector unions to bust Providence. Through political influence public sector unions gained a majority on the Providence Pension Board, and helped themselves to unsustainable benefits.
The Providence Journal digs bag into the history of the City of Providence pension system, and finds the answer to the question of how it got this bad:
General Treasurer Gina M. Raimondo often says that politics are the culprit for the pension crisis — 30 years of elected officials extending benefits without putting aside money to pay for them.
But one of the state’s most infamous eras of pension offerings –– what some say prompted “raids” on a system –– began in Providence during the 1980s and did not involve any politicians answerable to taxpayers. At least not initially.
It involved the city’s Retirement Board and its majority of union representatives who bestowed on their members lucrative disability benefits and lavish cost-of-living raises as incredulous city officials gasped, then watched as their legal appeals failed.
As the article details, former Mayor now Congressman David Cicilline, who has come under a lot of criticism including from me, did manage to get the City to take back control of the Board, but not before it was too late.
How the Providence Retirement Board came to be the only one in the state controlled by union representatives dates to the 1970s, says [ former City Solicitor Charles R.] Mansolillo, and involves the General Assembly, which created the Providence pension fund in 1923.
During the 1970s, Senate Majority Leader John P. Hawkins, a former Providence firefighter himself, and other senators began advocating legislation that would add two union representatives to the city’s Retirement Board, thus tipping the balance. The legislation eventually passed around 1977. “That was the turning point in my judgment toward the path of a corrupt mentality that invaded the public employee system,” says Mansolillo, who served under Mayor Vincent A. “Buddy” Cianci, and describes his battles with the unions over pension benefits as virtual “hand-to-hand combat.”
It took the board a few years to realize its power, says Mansolillo. Then, “they wake up, they wake up! The unions figure out they are in charge. See you later. They are like a corporation unto themselves.”
The public sector unions in Providence eventually killed the Golden Goose. It’s a story repeated on a less atrocious scale in municipality after municipality in Rhode Island and across the country.
And now younger public sector employees are paying the price for the fiscal gluttony of their union elders.