Federation of Connecticut Taxpayer Organizations

PROVIDENCE, R.I. - John Hazen White Jr., president and CEO of Taco Inc. in Cranston, is mounting his own $60,000 campaign to persuade state lawmakers to adopt "pension reform'' that goes far enough to "save the state from pending financial ruin.''

He posted a video on YouTube on Tuesday that likens Rhode Island's "pension storm'' to wind-whipped waves crashing against the rocks.

White has also conveyed his "critical urgency'' message on Lamar billboards in Warwick and Providence and RIPTA bus panels.

He currently has three billboards at Route 95 in Warwick by the airport connector and on the Providence/Cranston line across from the Roger Williams Park Zoo and in Providence on Corliss Street by the main post office. He is also running 20 bus panels.

"There is no more critical issue facing Rhode Island right now than pension reform," says White. "After years of neglect and avoidance of the issue, the unfunded liabilities of the pension system threaten to overwhelm both the state and many already struggling municipalities.

"The legislature must act on a comprehensive set of reforms to put the system back in balance. This is not the time for compromises or half-measures; this is the time for true profiles in courage."

A statement issued on his behalf also said: "Resolution of the pension crisis is an extremely important issue for White personally as he moves ahead with an $18 million building expansion project designed to secure Taco's future growth here in RI. Failure to stabilize public finances by reining in pension obligations and costs would be detrimental to doing business in RI, exacerbating an already difficult business environment.''

White is the founder of the "Lookout'' public-affairs and advocacy forum, and blog at www.lookoutri.com.

http://newsblog.projo.com/2011/09/john-hazen-white-mounts-60000.html

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Rhode Island Judge Rules for Unions in First Round of Legal Battle Over State Pension Reform (Mike Stanton / Providence Journal)

Sept 13, 2011

http://newsblog.projo.com/2011/09/update-judge-rules-for-ri-unio.html

PROVIDENCE, R.I. -- A Rhode Island judge has ruled in favor of state employee labor unions in the first round of a major legal challenge to state pension reform.

The state's lawyer says that he will ask the Rhode Island Supreme Court to review the decision on an expedited basis -- and that the governor and treasurer plan to press forward with their efforts to obtain pension reform in a special session of the General Assembly in October.

Superior Court Judge Sarah Taft-Carter's decision, issued Tuesday morning, denies the state's motion to dismiss a 2010 lawsuit by eight public-employee unions challenging General Assembly pension reductions in 2009 and 2010.

Lawyers for the state had asked the judge to dismiss the case, arguing that past court decisions have said there is no contract right. But Taft-Carter says that there is an implied contractual relationship between the Employees Retirement System of Rhode Island and participating employees.

That means that the lawsuit can proceed, even as state officials are wrestling with much larger pension reform. The changes in 2009 and 2010 increased the years to qualify for retirement, reduced pensions and limited cost-of-living allowances in an effort to save $59.6 million this fiscal year alone.

"The benefits provided ... are not gratuities that may be taken away at the whim of the State," writes Taft-Carter.

John Tarantino, the state's lawyer, says that he will ask the Rhode Island Supreme Court to review Taft-Carter's decision on an expedited basis -- and that Governor Chafee and General Teasurer Gina Raimondo plan to press forward with their efforts to obtain pension reform in a special session of the General Assembly in October.

Tarantino met with Raimondo and Chafee's legal counsel, Claire Richards, earlier today to discuss the court ruling.

"Their view is that they will continue to work with legislative leaders going forward to do what it necessary to pass pension reform this fall," said Tarantino.

Meanwhile, Tarantino will ask the Supreme Court for an expedited ruling on the legal question of whether public employees have a legal contract right.

"We're hoping the Supreme Court will deal with this aspect of the case before we have to deal with the others, because if there's no contract right, there's nothing left of the case," said Tarantino.

In her decision, Taft-Carter said that the state, in seeking to cut pension benefits for employees who had worked the required 10 years to become "vested," envisions a retirement system "under which the state may, with or without justification, significantly alter or completely terminate a public employee's pension benefits at any time -- even just one day -- before retirement. In light of the major purposes underlying public pensions, as recognized by our own Supreme Court, such a construction . . . is untenable."

The union members who filed suit, concluded Taft-Carter, "as ten-year veterans of the state, possess a contractual relationship with the state pertaining to retirement allowances and COLA (cost of living) benefits which are not subject to collective bargaining."

The unions, however, still face additional legal hurdles as the case proceeds. Taft-Carter, in her 39-page decision, noted that the courts must follow a three-pronged test in determining whether the state illegally reduced pension benefits: have the changes substantially impaired a contractual relationship, can the state show a legitimate public purpose in doing so, and is that public purpose sufficient to justify the pension cuts?

Taft-Carter noted that her ruling only deals with the first question: is there an implied contractual relationship?

The state had urged Taft-Carter to throw out the case, arguing that otherwise, the legislature's hands would be tied in changing pension laws.

"Defendants maintain that this Court's holding would 'cement' the law and forever bind future legislatures," wrote Taft-Carter. "This is simply untrue. Finding the existence of a contractual relationship is but one step in contract clause analysis."

Taft-Carter acknowledged this is a legal gray area, noting that the Rhode Island Supreme Court in past cases has described a pension as "comprising elements of contract and deferred compensation, but it has never answered the specific question before this court."

http://newsblog.projo.com/2011/09/update-judge-rules-for-ri-unio.html

Judge Issues Decision in Pivotal Rhode Island Pension Case (blog - Ted Nesi / WPRI-TV)

READ the Rhode Island Judge's 39-Page Decision (pdf - Providence Journal)

Rhode Island Governor and Treasurer Committed to Pension Reform (Katherine Gregg / Providence Journal)