It’s obvious after the published reports on Providence’s current finances (a $22 million deficit hole remains and the capital city may run out of cash by June) that enabling legislation to end COLA payments to Providence retirees and other cash strapped RI communities must be a legislative priority for the General Assembly. It’s all well and good to force cities and towns to fully assess their unfunded pension liabilities and even to ask to renegotiate contracts, if possible, with local unions, but the fact remains: urgent action is needed on the COLA situation.
Not remaining passive in the face of potential insolvency, Providence is even contemplating enacting a COLA suspension for ten years on its own. The providence City Council may have to pass an ordinance sooner rather than later to set such a suspension in motion and to guard their legal flanks. There is certainly “compelling public interest” in doing so, as these are not normal times for municipalities in serious financial trouble. We can’t have Providence go broke.
The recent legal ruling to impose a temporary injunction on Providence’s desire to move retirees to Medicare and out of Blue Cross (“Going from a Cadillac plan to a Buick plan” is how it’s been characterized), really threatens the city’s finances.