PROVIDENCE, R.I. (AP) — Fixing the Rhode Island’s public pension funding crisis will take a major overhaul, and everyone should expect to have to make sacrifices along the way, the speaker of the state House said.
Speaker Gordon Fox said Tuesday after an informational briefing on pensions for the General Assembly that the state is facing a “mindboggling” crisis and called reform of the system, the subject of a special legislative session scheduled for October, a “Herculean task.”
“There’s going to be a lot of heartache,” Fox said. “We’re going to try to do the best we can. Everyone’s going to have to expect to give something up.”
Recent estimates put Rhode Island’s unfunded liability for public workers’ pensions at nearly $7 billion, slightly less than the entire state budget for one year. Gov. Lincoln Chafee has said there’s no greater issue facing the state, and General Treasurer Gina Raimondo has called for the state to act “swiftly and decisively.”
Fox’s comments came after presentations, in a ballroom at the Renaissance Hotel, by two national public pension experts designed to help lawmakers as they consider ways the state can rein in escalating pension costs nearly everyone agrees it can no longer afford.
Among the experts called by Fox and Senate President Teresa Paiva Weed was Kil Huh, research director of the nonprofit Pew Center on the States. Huh offered a look at the national pension funding situation, saying that states, including Rhode Island, are drowning under the weight of unfunded pension liabilities.
He said states are “running out of rope” but added that there is no “one-size-fits-all” approach to reform. He also said small reforms can have enormous financial impacts.
But Fox, D-Providence, insisted in later remarks to reporters that it will take a much bolder approach, with no solution pleasing everyone. Alternatives to overhauling the pension system, he said, are significant tax hikes or deep cuts to social programs that no one finds palatable.
“It’s not black or white,” he said. “It’s not going to be pensions or no pensions. This is really all shades of gray.”
In a May report, Raimondo’s office recommended several potential reforms, including decreasing the rate at which benefits accrue, suspending cost-of-living adjustments and raising the retirement age from 62 to 67.
Three public hearings on pension reform will be held at the Statehouse this month, and a special legislative session has been scheduled for October.