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.
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Comments
Since it is virtually impossible for small government politicians to become elected in some states, counties and cities, it will be hugely interesting to watch what the Left does in those locales to address their impending structural bankruptcy.
At least one scenario will involve little or no re-negotiation and raising taxes. That will cause business and residents to flee. Unfortunately, both are sticky (neither like to move from their entrenched geographies and relationships), so the decline is played out over a comparatively long time line.
BTW, will New York become the next Detroit? Wall St. is bailed out rather than fails, but it does a grand job of avoiding taxes.
I used to be a RI resident and moved to Texas in 1990. I just grew tired of hearing the same old crap as to how all would get better but never did.
Now, I enjoy watching the chaos from afar and am thankful that I made the move then to make my current retirement a whole lot better than if I had remained in RI.
Ya just gotta luv them thar' politics from back home…
Oh, and those public sector Unions WILL pay. Wisconsin, New Jersey, and Rhode Island are only the beginning. I'm eagerly awaiting for the fight between Gov Cuomo and the NY public sector Unions that is to come.
The Union Legion (blog) has already issued a call to arms, saying that any contract offered by Cuomo that does not protect the ENTIRE CSEA and Public Employees Federation Union from ANY layoffs should be voted down, and the savings from such layoffs should be made up by reinstating the "Millionaire's Tax," and a "Securities Speculation Tax" on Wall St.
My guess is that by the end of the fight in New York, you'll see legislation that looks like a slightly watered down version of what passed in Wisconsin, simply because any legislator to oppose it in New York will see a revolt by their constituents. All it will take will be just a LITTLE bit of media advertising with something like this:
"When was the last time YOU got a raise? Because of protection by (state representative X) the UNIONS get a 3% raise EVERY YEAR. Contact (X) and tell him that if he doesn't pass the Union Strike Limitation Act that you WILL vote against him in the fall elections. Tell him, if YOU can't have a raise, the Public Employees Unions shouldn't either."
If something like that were to hit the airwaves, especially within, lets say – 6 months of an election, even veteran Liberal politicians would start SCREAMING for a WI style Union limitation bill.
It's going to be FANTASTIC to watch the Unions completely self-destruct over the next two years as the economy stagnates and they try ever harder to protect the unsustainable benefits they've been able to threaten out of past politicians as budget cutters in the legislatures start to realize exactly how small of a voter base the Unions actually are.