You know about the RI pension mess, because I’ve been pounding that issue pretty much since the founding of this blog three years ago.
The New York Times takes a devastating look at Rhode Island, The Little State With a Big Mess (h/t @amandacarpenter):
ON the night of Sept. 8, Gina M. Raimondo, a financier by trade, rolled up here with news no one wanted to hear: Rhode Island, she declared, was going broke.Maybe not today, and maybe not tomorrow. But if current trends held, Ms. Raimondo warned, the Ocean State would soon look like Athens on the Narragansett: undersized and overextended. Its economy would wither. Jobs would vanish. The state would be hollowed out.It is not the sort of message you might expect from Ms. Raimondo, a proud daughter of Providence, a successful venture capitalist and, not least, the current general treasurer of Rhode Island. But it is a message worth hearing. The smallest state in the union, it turns out, has a very big debt problem.After decades of drift, denial and inaction, Rhode Island’s $14.8 billion pension system is in crisis. Ten cents of every state tax dollar now goes to retired public workers. Before long, Ms. Raimondo has been cautioning in whistle-stops here and across the state, that figure will climb perilously toward 20 cents….In some ways, the central question is not only what the government owes to pensioners but what citizens owe to one another.
That last sentence hits the nail on the head. In Rhode Island, the citizenry is being asked to spend increasing percentages of its income and assets not for the general welfare, but for the welfare of a relatively small percentage of the population who have state and municipal pensions.
It’s often joked that General Motors is a pension plan which makes automobiles. Rhode Island is in worse shape. Rhode Island is becoming a public sector pension plan which doesn’t make anything.
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