State Pension Plan 'Would Make Us Cry,' Says Mayor [Poll]

With the Rhode Island General Assembly continuing its hearings today on a pension overhaul proposal by Gov. Lincoln Chafee and Treasurer Gina Raimondo, Mayor Joseph M. Polisena said part of the legislation — which he said would force cities and towns to raise taxes — should be taken out of the bill.

"They're calling it a 'carrot and stick approach' — I say it's the onion and the stick, because it's going to make us cry," Polisena said during a phone interview from Town Hall on Oct. 26, the first day of hearings on the pension reform bill. "I've got to come up with 5 million additional dollars a year over 10 years if this passes."

Under the bills — House Bill 2011-H-6319 and Senate Bill 2011-S-1111 — cities and towns would be required to increase their payments into local pension accounts or risk losing state aid other than school funds.

(Copies of the two bills are attached to this article.)

"I don't know what aid they're going to take away from the cities and towns [since] they've already taken away the general revenue service and the car tax," Polisena explained. "If they pass it like it is, we're going to be in serious trouble. There's no way that I'm going to come up with that money — no way."

For Johnston, Polisena said the final decision on including the local pension language would make a huge difference.

"If they don't fix the state system, I have to come up with $2.5 million in new money," Polisena explained. "If they fix the state system and do this other stupid thing, this other foolish move with the cities and towns, I've got to come up with $5 million of new money. That's crazy, and as long as I'm here, I'm not creating a pension tax — no way."

The town's budget currently stands at $89.56 million. A $5 million increase would add about $3.13 to the current tax rate, or about $626 in higher taxes — more than triple this year's $188 tax hike — on a home valued at $200,000.

It would also represent about a 12.6-percent increase to the $24.75-per-$1,000 tax rate in Johnston.

Polisena also said the proposed language governing local pensions was a surprise to him and other local leaders.

"We had no input," explained Polisena, who said a group of mayors, town managers, and town administrators had a meeting with Raimondo within the last month, and "there was no mention of the local pension plans. I commend the governor, the governor's trying to do the right thing, but I'm very concerned because we had no input on including the local municipal pensions" in the draft bill being heard this week.

Polisena also said he's contacted the entire Johnston delegation to the Assembly, to ask them to remove the local pension language.

"It doesn't help us, [and] fortunately for us, they agree," Polisena explained, adding he planned to contact the chairmen of the House and Senate committees today to ask them to remove the local pension language. "The original reform that Gina Raimondo proposed does help us. We should pass the state pensions reform now, and next year we can work on the local pensions."

The mayor also responded to criticism that delaying a decision on local pensions may mean a missed opportunity for the state.

"Some people say 'Oh, it'll never happen if we wait until next year,'" Polisena said. "It'll happen, because next year is election year, and if they don't do something, more cities and towns will fall into the situation of Central Falls," which filed for bankruptcy protection in August. "It's gotta be fixed, but to include the local municipal pensions like they're doing, it'll make Central Falls look like Las Vegas when the other cities and towns have to come up with all this money."

The General Assembly has set up a Pension Reform website that includes video of the hearings, as well as transcripts of testimony and other materials.

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