Superior Court Judge Sarah Taft-Carter has forced the state
to go into federal mediation with the public employee unions over the terms of
the landmark pension reform law. Both sides will now meet and the unions will
be pressing to claw back some of the changes that the General Assembly approved
last fall. Don’t expect much to come of the mediation attempt, however. The
state and the unions will probably still be going to trial come February.
Why? Because any concession the state might consider will
upset the financial structure of the reforms in place and cost millions. So the
state will balk on conceding much of anything to the unions, which will mean
the mediation effort will fail and the two sides will have no choice but to
head into court, which is precisely where this case should be settled. In court the state has a strong case to make.
To bring us up to date on the Judge’s decision, a bit of
background is in order. The public sector unions have taken the state to court
over the landmark pension reform legislation, which was entirely expected. The
pension law altered some of the pay and retirement benefits stipulations
contained within existing contracts between the unions and the state;
retirement eligibility ages were raised, younger workers saw the introduction
of 401k plans for part of their retirement savings, and COLAs were eliminated
for a period of ten years. These sweeping actions were taken because the state
faced an unsustainable pension nightmare, with more and more tax dollars every
year feeding exponentially rising pension demands. If nothing was done, the
state would go bankrupt.
To its credit, the Democratic controlled General Assembly
responded to the mountain of data and analysis presented by General Treasurer
Gina Raimondo and voted overwhelmingly in favor of the reform plan that she
presented, and Governor Chafee, who had courted and received critical union
support in winning a three way gubernatorial race, backed her. The reform law
is saving Rhode Island millions of dollars each year while strengthening the
pension system for the long haul.
While politicians voted for the plan, the unions did not.
Their offered solutions to fix the pension problem was to raise taxes and
refinance the pension system over the next twenty years, a move that was
estimated to cost the state a billion dollars. As soon as the pension reform
law passed, their leaders vowed to meet the state in court, which brings us to
the present. They are arguing that promises made in collective bargaining
agreements made with the state over the years contain an implied contract, and
breaching that contract over the objections of the unions is illegal.
Governor Chafee has not been helpful to the state’s case.
Having backed the Raimondo pension reform plan and signed the legislation into
law, the Governor surprised everyone when he said that the state would be
better served by sitting down and negotiating a settlement with the unions, in
the manner of most civil law cases that get settled before they ever go to court. But this is hardly a typical civil law case.
Like a nervous Nellie, the Governor is afraid of the state losing the case. Or
is he more concerned at this point with currying union favor for the next
election?
The fact is, the state can’t afford to give anything back
right now or for some years to come. As Gina Raimondo understands better than
anyone, altering the terms set into the law would be a calamity, potentially
bankrupting the state. Thankfully, legislative leaders understand this too,
despite the pressure this puts upon them.
Let the case proceed in Superior Court. It will go up to the
Supreme Court next, regardless of which side wins in the first round. Now is not the time to panic. Let’s keep calm
and carry on, fortified by a legally sound case that will prevail in the
end.
Posts
