July 31, 2007

Things That Make You Go "Oh C'mon!"

Justin Katz

It's amazing enough that Cranston firefighters can retire after twenty years at any age, but this is stunning:

Once retired, retirees continue to receive extra pay each year for longevity bonuses and extra pay for 15 holidays!

So, they get longevity bonuses for a job that they no longer do, as well as holiday pay for days they have off anyway. Jim Davey has more details on Cranston firefighters' new contract.

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Let's not forget one of the greatest outrages.

For Cranston Firefighters, 9/11 is a holiday.

It's not a holiday for New York Firefighters, who actually DESERVE the day off, but Cranston Firefighters get holiday pay every year for working on 9/11.

Posted by: Greg at July 31, 2007 7:02 AM

Even if they're retired!

Posted by: Justin Katz at July 31, 2007 7:12 AM

no shame...

Posted by: johnpaycheck at July 31, 2007 7:39 AM

Did Steve Laffey sign this contact?

Posted by: Steve at July 31, 2007 9:02 AM

Cue Pat Crowley - we need another post along the lines of his last one:

"Permission? Permission! That is why we have Unions. To protect us from people like you. People that want to keep us 'in our place.' Why don't we repeal the anti-slavery amendments too!"

Posted by: Tom W at July 31, 2007 9:52 AM

Davey criticizes this aspect of the Cranston contract…

However, under this contract the base salary is the salary the firefighter was earning at the time of retirement. In this case, that would be $54,000, to which would be added a longevity bonus of up to 13 percent ($7,000) and pay for 15 holidays, conservatively estimated to be an additional $3,000 — for a final base salary for pension computation purposes of $64,000, compared to the norm of $52,000.
…but this isn’t necessarily a problem in and of itself. A well-managed pension fund should function whether the average salary at retirement is $52,000 or $64,000.

There are a number of additional factors that could be creating a problem, for instance…

  1. Contributions into the system not calculated as a percentage of everything that goes into calculating the base salary for drawing out of the system, or…
  2. Late-in-career “kickers” added to official salaries as a common practice, where individuals get big increases in what they can take out, without having put a corresponding amount in soon enough pre-retirement to allow it time to grow.
I’m not sure if the Cranston contract contains any provisions like these.

However, from a fiscal standpoint, I think the real problem is the lack of an age limit on retirement. If a pension fund is expected to last say 20 years on average, for it to be self-sustaining, the annual amount drawn out of it will have to be a very low percentage of the base salary. My libertarian sympathies hate the idea of telling people they have to work to a certain age (especially in a physically demanding job like firefighting) because top priority needs to be given to keeping government accounts solvent. That’s part of the reason that I believe we need to find more flexible ways than defined-benefit pensions to fund people’s retirement.

Posted by: Andrew at July 31, 2007 10:15 AM

None of this is shocking. Other cities in RI are just about as bad. Really at this point the best thing to happen is have the state and municipalities default as quickly as possible so all these absurd contracts, pensions, benefits, etc. can go kaput. Most Republicans offer no relief. Like Avedesian, they are "me too" union whores.

Posted by: Mike at July 31, 2007 10:25 AM

You know, this might not have happened under a Fung administration. If Fung had only put some distance between himself and Laffey during the campaign, we wouldn't have to worry about this jack who currently occupies the mayor's chair.

Posted by: Rhody at July 31, 2007 11:07 AM

>>None of this is shocking. Other cities in RI are just about as bad. Really at this point the best thing to happen is have the state and municipalities default as quickly as possible so all these absurd contracts, pensions, benefits, etc. can go kaput. Most Republicans offer no relief. Like Avedesian, they are "me too" union whores.

BEWARE! BEWARE! BEWARE the proposals to merge the municipal systems into the State system, as Almonte proposed a couple of weeks ago -

It may well be that the UNSPOKEN AGENDA is to protect those municipal giveaways from default / bankruptcy by merging them into the State system (I'm not sure that bankruptcy is available to a state - and even if it is, such is far less likely to occur). This would also take the threat of bankruptcy / default off of the table for future municipal contract negotiations. So for the public sector union bosses, merging the municipal pensions into the state system is an "all win, no lose" proposition. Little wonder that the public school teachers are already in the state pension system.

In this way (analogous to what's occurring with "school aid") the cities and their unions will be kept happy, and through "cost shifting" those who live in the suburbs will get stuck with the tab to bailout the cities' politicians pension giveaways to the public sector unions.

ALSO BEWARE of proposals for a statewide teachers contract - particularly if its supposed to be "negotiated" by the RI Department of Education; talk about the fox guarding the hen house!

What will likely accompany (or soon follow) these "statewide teacher contract" proposals is a "solution" to provide "more state education funding," an end to "Caruolo suits" blah blah blah - TO PROVIDE POLITICAL COVER TO IMPOSE A STATEWIDE PROPERTY TAX!!!

Like they did with the Lottery, they'll claim that the efficiencies and "assumption by the state for education funding" will lead to a net decrease in property taxes.

Anyone who lives in Rhode Island more than five minutes realizes what will happen before long: the taxes will end up higher than ever, the suburbs will be seen as a cash-cow to subsidize the cities and their political and welfare machines - so the only real beneficiaries will be the welfare industry; the public sector unions and their Democrat sycophants.

They've pretty much tapped-out the income tax and sales tax and excise tax and fee troughs. The tobacco money well is now sucked dry. And while because they're so hungry for cash that a casino is probably inevitable, it won't happen soon enough nor provide enough money to bailout the multi-billion unfunded pension / retiree health care liability. So you can bet the Democrats and their union puppet-masters behind the curtain are going to be eyeing a statewide property tax.

Posted by: Tom W at July 31, 2007 11:18 AM

You did note where Davey lives, right?

Posted by: chuckR at July 31, 2007 1:17 PM

>>You did note where Davey lives, right?

He used to live in Cranston and was a General Assembly rep from there (one term).

He made it out under the wire and escaped Rhode Island and its taxes about a year ago ... obviously he's still monitoring what's going on here, albeit from a safe distance.

Posted by: Tom W at July 31, 2007 2:03 PM

My point exactly.

He made it out under the wire? Does that mean remaining Rhode Islanders are going to be issued propiskas?

Posted by: chuckR at July 31, 2007 2:53 PM

>>Does that mean remaining Rhode Islanders are going to be issued propiskas?

Possibly in spirit.

I wouldn't be surprised to see the General Assembly hike taxes on capital gains on housing, particularly (if they can make it stick) at a higher rate on non-resident sellers / if not rolled-over into another RI property - this would hit people leaving and/or selling second homes / condos.

The fact that property taxes are so high I think is already part of this dynamic. The General Assembly uses it as a mechanism to generate tax revenue from those who commute from RI to work in MA and/or those who have second homes here (a lot of NY/CT people do). Yes, the property tax does not go directly to the GA - but it offsets "state aid to education" which the GA doesn't provide to the suburbs, the "savings" from which the GA then spends as it pleases.

Posted by: Tom W at July 31, 2007 3:33 PM

Here is some more stuff about the firefighters contract negotiated and signed by Napolitano. It is from a Providence Journal story last month. It is even worse that what Davey said.

CRANSTON - The leader of the local Republican Party says the tentative firefighters contract negotiated by Democratic Mayor Michael T. Napolitano sacrifices management rights and would be costly to the city in the long run.

David Exter, chairman of the Republican City Committee, said this week that he sees problems with a number of points in the agreement which has been ratified by the union's rank and file but awaits approval by the City Council.

"There is little that Cranston taxpayers can be happy about with the new firefighters contract," Exter said in a statement. "While the new contract obtains minimal short-term cash savings it does so at a great long-term expense."

Last year, contract talks broke off with Napolitano's Republican predecessor, Stephen P. Laffey whose relations with the union were acrimonious. In announcing the terms of the tentative agreement last week, union leaders noted that they had filed for binding arbitration but were willing to abandon that route to try negotiating with Napolitano.

Although the 2 percent raises at six-month intervals are almost equivalent to the 3 percent annual raises Laffey negotiated with the police union, Exter said there is no parity because firefighters earn an average of $10,000 more a year than their police counterparts.

Also, he said that, while the contract requires firefighters to contribute to the cost of their health care for the first time, it does not prescribe as much as the police are paying, particularly new employees. The police contract calls for current officers to pay about $1,300 a year toward a family health insurance plan while new hirees have to pitch in 17.5 percent.

The tentative agreement with the firefighters requires a $1,040 contribution for a family plan and makes no differentiation for new hirees, Exter said. He also pointed out that the health care copayment stops after retirement for firefighters, but not for the police. (Both police and fire receive health benefits until they are 65.)

Even more troubling about the proposed contract, Exter said, are language changes - particularly one that Republicans perceive to be increasing the department's minimum staffing requirements.

Exter said the way he reads the new contract, it increases minimum staffing from 40 firefighters to 41 - a change that would require hiring more firefighters.

Exter also criticized a contract provision that stipulates that the city must keep the same number of fire engines and rescue trucks that it has now. He said it is an example of the union's taking over management of the department.

Equally disturbing, he said, is contract language that would make all forms of cancer a job-related illness. He said that the language goes beyond state law, which classifies cancer as a job injury for firefighters, because it does not limit its application to firefighters who have actually fought fires or otherwise come in contact with carcinogens.

"This is going to cost us a lot in disability retirements without ever taking into account someone's lifestyle and other contributing [factors]," he said.

Posted by: Cranston GOPer at July 31, 2007 9:39 PM

"a change that would require hiring more firefighters."

As long as all new hires continue to be white males, I see no problem with this.

Posted by: SusanD at July 31, 2007 10:26 PM

SusanD said: "As long as all new hires continue to be white males, I see no problem with this."

Anybody know how many levels of irony are at work in this comment? It has to be at least 2, doesn't it? I suspect more.

Posted by: Thomas at July 31, 2007 11:56 PM

The solution to government pension problems can be found in three numbers and a letter-


Posted by: Anthony at August 1, 2007 3:12 PM

Don't forget the only republican on the City Council voted in favor of this contract...of course he did get campaign contributions from the union and support...

Posted by: Cranston Democrat at August 1, 2007 3:52 PM

"403(b) Defined

403(b) plans are what are known as defined-contribution retirement plans. That means your 403(b) plan retirement benefit is determined by the amount you (and possibly your employer) contribute and how your investments perform. The 403(b) plan is different from a defined-benefit pension plan, in which you are paid an amount upon retirement based on a stated plan formula, such as the years you work and salary you earn.

Section 403(b) of the Internal Revenue Code provides a minimum set of guidelines that employers and plan providers must follow. This gives employers the latitude to design a plan that can best meet their workers' needs. Consequently, each 403(b) plan is unique."

There is apparently also a 403(b) Roth option.

Posted by: SusanD at August 1, 2007 6:03 PM

403(b) plans also allow individuals to allocate their investments among various plans (stock or bond-heavy, etc) giving a significant amount of freedom of choice.

The employer contribution is critical, as it gives an incentive to the individual to put away money for retirement, and makes it less likely than the rest of us will have to pay for him/her later in life. Typically, the employer contributes 5% of the employee's salary, if the employee contributes at least 9% on his/her own (pre-tax, of course).

(I'm Still trying to parse SusanD's "white male" comment, but it looks like she's not going to bite :)

Posted by: Thomas at August 1, 2007 6:33 PM

Actually, Cranston should have a lot MORE than 1 more firefighter.

Read NFPA 1710 and OSHA's 2-in/2-out rule (both of which would be used to hang the city in a lawsuit) and come back to us.

Posted by: Brendan at August 2, 2007 11:29 AM

I almost forgot

It's amazing enough that Cranston firefighters can retire after twenty years at any age,

Is it your position that 20 years inside burning buildings and mangled cars is the same as 20 years in a cubicle?

Doesn't matter if your 20 is up at 40, 65, or any other age. Your body is never going to be in the same condition as someone else your age who didn't do that job.

And NO. I'm not a firefighter in Cranston or anywhere else for that matter.

Posted by: Brendan at August 2, 2007 11:34 AM

>>Is it your position that 20 years inside burning buildings and mangled cars is the same as 20 years in a cubicle?

Consideration should be made for the dangers and physical challenges faced by firefighters and police officers.

That said, it is likewise true that after 20 years they are no incapable of doing ANY work or engaging in ANY other occupation.

I know that in the parallel universe of public sector employment the attitude is that once hired it is a job for life and should generate a payroll / pension check for life, but that isn't real world in the private sector (and soon won't be in the public sector as the unfunded pension liabilities' are rearing their ugly heads).

For those that are truly disabled, additional programs / benefits are in place (and in Providence they don't even have to be disabled to get a disability pension, just connected).

We all know that most after 20 years are collecting their pension while also engaged in some other line of work.

Posted by: Tom W at August 2, 2007 12:02 PM

No question about it, cops and firefighters are not the same as office workers.

Unlike public office workers, I think they should be allowed to retire after 20. I'd rather have a young firefighter running into a burning building than a 65 year old and if there are any two groups deserving of a pension-style system, it's cops and firefighters.

But as Tom W points out, that doesn't mean that they can't engage in ANY other work after they retire. Also, there is a simple reality that governments can't pay money they just don't have.

There is a huge array of options between full pensions with health benefits at 20 years and not providing benefits.

Posted by: Anthony at August 2, 2007 10:41 PM

Why can't the pension be fully vested after 20 years, but not paid out until the average retirement age? Why should a fireman work from (say) ages 20 to 40 and then be elligible for pensions for conceivably twice that length of time — with plenty of time for a full second career, while receiving retirement money, especially in a society in which fewer and fewer people are ever able to retire at all?

Posted by: Justin Katz at August 2, 2007 10:52 PM

Gotta say I think Justin has an interesting point.

How does it work for military careers? I'm pretty sure you can retire after 20. Do you then have to wait until 65 to collect?

Posted by: Thomas at August 2, 2007 11:25 PM

So I'm supposed to work for 20 years, 25, whatever, and when I walk away I've got NOTHING to show for it?

Retired firefighters don't have the same life expectancy as most people. Retiring at 40 is nice, no doubt- but there's no guarantee that you'll even live to 65.

Sorry, no dice.

Posted by: Brendan at August 3, 2007 2:49 AM

OK, Brendan. Then we'll just keep going as we are: with the state headed toward a financial collapse that may wash away the pension system anyway, while driving working and middle class people and the majority of their children out of state.

By the way, do you have any data that show retired firefighters living shorter lives than most people... say compared with carpenters, such as myself?

Posted by: Justin Katz at August 3, 2007 6:16 AM
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