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Tuesday, July 20, 2010

Pension System "Choking The State"

Those are not my words. Those are the words of Democratic Rhode Island General Treasurer, and candidate for Governor, Frank Caprio.

As reported by The Providence Journal:

Within a year, the taxpayer cost of providing public employee pensions will increase again — and substantially — despite the latest cut by lawmakers in the size of the annual cost-of-living increases the state provides its retired workers and public school teachers....

State and local taxpayers will have to increase the amount they contribute toward teacher pensions from 19.01 percent of payroll to 22.32 percent, according to the rundown the state’s actuaries at Gabriel Roeder Smith & Co. provided the retirement board last week.

Since the employees’ own contributions are locked in by law at 8.75 percent for state workers and 9.5 percent for teachers, there is currently nowhere else for the state — and the cities and towns that share the cost of the teacher pensions — to go....

In a brief interview on Monday, Democrat Caprio said his views haven’t changed since April when he said Rhode Island cannot afford the lifetime pensions it has promised tens of thousands of public employees.

He said he ultimately wants to move all active employees into a combination 401(k)-style and fixed-pension system modeled after the hybrid plan offered to federal employees.

The state would not strip workers of pension benefits they’ve already earned and employees could choose not to pay into their 401(k)s....

“The old way is choking the state,” he said at the time.

Will Caprio be accused of being a union buster or anti-worker, which are the epithets frequently thrown at those of us who have warned that reform needs to be undertaken promptly and extensively.

Instead of encouraging reform, the Obama administration is using Stimulus funds and seeking emergency funding to prop up unsustainable state budgets.

Related Posts:
Teachers Need A Teachable Moment About Their Unions
Unions Pushing States Toward Broken Promises
High Taxes And Union Pensions Are Killing Rhode Island. Duh!

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