October 28, 2011

Give the Unions More Control

Patrick Laverty

Some of the union heads are claiming that this pension crisis was fabricated by State Treasurer Gina Raimondo. She is trying to solve a problem that she created. People like Paul Valletta, representing the Rhode Island Association of Firefighters. His claim:

[Raimondo] cooked the books on this issue... She created this pension problem … now she’s riding in on her white horse … to solve this problem
Other unions are also making claims that the pension problem is not nearly as bad as Raimondo and Chafee make it out to be, in spite of extensive hearings, research and convening a panel that included union management.

When people disagree so vehemently with a given solution, even to the point of accusing one of lying, my response is often to ask what their solution is. What I would like to see happen is people like Valletta put their own reputation on the line in this solution.

How about this, we separate out the firefighters' portion of the pension system and put that separate. We make no changes. We continue forward with the status quo and send periodic updates to the members of the firefighters' union. In each of those updates, we make sure it is known to each of the members that the steps being followed are those that were advocated by Paul Valletta. So when the pension system does go belly-up and those checks start bouncing, don't call the Treasurer, don't call the Governor, don't even call a lawyer. Call Paul Valletta.

Or, why not let the union take over their portion pension system? Here's one thing I've never understood. Treat the union like a sub-contractor. The state simply hires the union like they hire any other contractor. The state pays a set amount to the contractor and the contractor pays its members how it sees fit. Let the union determine salaries, steps, raises, health care plans and retirement packages. They're claiming now that the Treasurer is being disingenuous, so let's see how they do with it. Maybe they can manage it all better. I wonder if the unions are willing to make this agreement and really take over every aspect of the employment. Unions supply staff, the state supplies one monthly payment to the union. Very clean, very orderly, many fewer details would need to be negotiated.

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Is Valletta so stupid that he doesn't understand what a moron he looks like??
As though, Mr. Ignorant Union Thug firefighter, has a better grasp of the numbers than Harvard educated, Rhodes scholar, PHD from Oxford, Yale law grad, General treasurer Gina Raimondo?
Are you kidding me? Listen to me, you ignoramus Valletta, enough of the stupid talk from your unions that their pension money wasn't put in by the politicians and it's not your fault. These very politicians were put in office BY your unions. You funded their campaigns, did lit-drops for them, made calls and held their signs to get them into office. Once these bought-and-paid-for politicians were in office, they gave your unions what you wanted in the way of higher pay, better benefits and COLA's. These are THE SAME politicians that did not put the money into your pension fund. But where were the unions then??? They said nothing! Why did they way nothing? Because they knew very well that if the pension funds were properly funded each year, there would be no money left to give the unions each year for their increased pay and benefits without raising taxes too high each year. So, the unions took a gamble and figured that once the problem reared it's ugly head,it would be too late, and the taxpayers would have to pay anyway. This is the crux of the issue. In a nutshell, the membership was lied to by their leaders. They figured they could have it all, with the taxpayers simply footing the bill when it came due. The union leadership took a huge gamble with their membership and guess what - they lost. The money is just not there!
The fact is that the unions were as much a huge part of this problem as any group by electing these slimy politicians. For all you union workers out there, you should be outraged. But let's understand just where your rage should be directed - it's squarely at your union "leaders" for lying to you.

All that dope Valletta is trying to do with his lies and his slander is deflect
from the truth.
These punks know the truth and just can't deal with it.

Posted by: Mike Cappelli at October 28, 2011 11:10 AM

This man, Valletta, is making an absolute fool out of himself. He sounds like a time-warp from the Prohibition-gangster era.

Firefighters - Are you happy with your representation in this matter? Now would be a good time to speak up if you think these people are making you look like a bunch of yokels and greedy obstructionists.

My advice would be to redirect your union dues and hire a good ATTORNEY. You'd actually save money.

Posted by: Dan at October 28, 2011 11:40 AM

"[Raimondo] cooked the books on this issue"

I am not on board with the pension reform proposal put forth by the General Treasurer and the Governor (because it only solves 41% of the state pension problem).

Having said that, this was a defamatory statement by Mr. Valletta, even taking into consideration that Ms. Raimondo is a public official. In fact, it is all the more defamatory in view of the nature of the office that she holds.

Posted by: Monique at October 28, 2011 1:31 PM

All Valletta is doing is trying to divert attention from the fact that he and his punk friends have been fraudulently scamming the taxpayers for years.

Posted by: Mike Cappelli at October 28, 2011 1:42 PM

I say we cut the firefighters union a check and tell them it's all yours. You run it. We'll contribute the 8.75% and you're responsible for the rest. Good luck.

Posted by: Max D. at October 28, 2011 3:15 PM

That would be almost worth the money to watch. Union leaders would earn $400,000 a year and eat steak and lobster at capitol grill on tab with lawmakers every night, who would also be seen driving around brand new cars. There would be coke parties at Liedecker and Crowley's new houses that would rage into the wee hours of the morning. The entire system would go bankrupt within 5 years and Walsh would find some way to still blame the state and excuse everything the unions did.

Posted by: Dan at October 28, 2011 4:15 PM

They'd just hit us up for more money every year, and RI voters would cough it up.

"We understand that we're askin' for a big increase, but there were costs and stuff."

Posted by: mangeek at October 28, 2011 5:35 PM

Rhode Island has become a terrible place to live and (try to) work precisely becaue of people like Mr. Valletta. The fact that someone who so obviously is not only stupid, but also completely out of control personally, ever rose to a position of leadership is unnerving. The GA at some point has to decide if this state exists for all of the people who live here, or if it simply a place whose primary purpose id to support state employee union bosses like Mr. Valletta and his lobbyists. If they decide the latter, it will be a surprisingly short time before the relatively few private sector taxpayers decide to stop funding the likes of Mr. Valletta and take their lives somewhere where they aren't abused--like maybe 5 miles down the road to another state.
All we are talking about here is COLA's. You'd think we were revoking the entire pension system.

Posted by: Doug Meisner at October 29, 2011 4:23 AM

It's not the fault of Valleta, Crowley, Walsh, Linedecker, Reback or anyone else but the MAJORITY of your neighbors that have made RI a one party state for longer than the Soviet Union.

Posted by: Tommy Cranston at October 29, 2011 8:02 AM

Listen to what the person who challenged the car tax evaluation board said on a post by Mark. He's objecting to the board using the higher evaluation in his case although there are reasonable alternatives. It seems to me that Paul Valletta's comments about how the General Treasurer manipulated numbers to make the pension problem appear to be more dire is very similar to the tax board always using the higher number.

Posted by: phil at October 29, 2011 8:53 AM

So Raimondo gets elected, 'cooks the books', and all of a sudden we have a pension problem? The red flags have been there since the 90's. The only thing she changed was the assumptions on returns and those have been reduced by responsible officials across the country. I was some what sympathetic to the public safety pension cause but this attacking her character is plain desperation.

Posted by: Max Diesel at October 29, 2011 9:07 AM

Max, that is exactly how it should be done. I'm a union member (uh oh, let the name calling begin) and have been saying for years that unions should administer our own pensions. Pre-determine a percentage that the employer (state or municipality) will contribute annually and be done with it. The problem now is, whether anybody here wants to admit it, the state has not contributed its required share for years, so for the unions to begin administering the plan the state would have to contribute a gid knows how much lump sum.

Posted by: Jumping Jim at October 29, 2011 9:30 AM


Is it really unreasonable to change the expected rate of return from the stock market to be 7.5% instead of 8.25% when the fund hasn't been meeting either number for the last 10 years? If she didn't make that change and then rolled out all of her reform and then it all missed, you'd probably be one of the first to stand up and claim she didn't know what she was doing.

As for what Rob Cote is claiming, how much sense does it make to tax someone on a value of $27,000 when the vehicle actually *costs* $24,000? And not only that, but to use that $27,000 number for five years.

What do you always hear about the value of a vehicle the moment you drive it off the lot? It drops in half. Even if that is not literally accurate, it is surely not worth *more* than what you paid for it.

I've been saying this about vehicle and property assessments. When you get your tax bill and see the assessed value, you should have 30 days to inform the town that you intend to sell the vehicle or the property to the town for the assessed value. I tried to sell my house this year and even at a price $25,000 UNDER assessed, I couldn't get a single offer. If the town would pay me anything close to the assessed value, I'd leave that day. And, my re-assessment was done this year.

Posted by: Patrick at October 29, 2011 10:31 AM

Unions should administer their own pension plans? Anybody out there remember the Teamsters Central States Pension Fund? Or other private sector union plans just like it? As they say, those who are ignorant of history...

Posted by: John at October 29, 2011 2:19 PM

As they say, those who are ignorant of history...

Then you must remember that the Cranston Firefighters sought to have the city fully fund their pension plan when Taft was the mayor. The State Supreme Court ruled against the firefighters and approved the pay as you go plan by the city. As long as the city paid it's retired firefighters the city could do as they wished with the employee contributions.

Posted by: phil at October 29, 2011 4:33 PM

It's shameless how Phil and Russ and the other apologists can pretend like this whole problem would be nonexistent if the state had simply made its contributions over the years. I suppose that in the most intellectually dishonest way imaginable, that's technically true, but then every other program in the state would be underfunded. The state didn't make its contributions for a reason - it was broke then and it's even more broke now. Raising taxes 300% is not a solution. I repeat - where is this magic money supposed to have come from? The businesses that unions, progressives, and corrupt Democrats drove out of the state decades ago?

Posted by: Dan at October 29, 2011 4:47 PM


Is calling a politician a politician an attack on their character?

Posted by: phil at October 29, 2011 4:47 PM

John, if the public employees unions administer our own plans then if the union "leadership" messes it up, its the unions problem, not the taxpayers. Just like the private sector. As a union member I would rather have the unions administer their own pension plan so the liability comes off the rest of the taxpayers.

Posted by: Jumping Jim at October 29, 2011 5:29 PM

"It's shameless how Phil and Russ and the other apologists can pretend like this whole problem would be nonexistent if the state had simply made its contributions over the years. I suppose that in the most intellectually dishonest way imaginable, that's technically true, but then every other program in the state would be underfunded."

That's not true. You could just raise the income tax on the hated "rich" to 30%.
Geniuses (sic) like Crowley and Sgouros repeatedly tell us that raising income taxes will never cause these rich to evade the tax. The "Flight Of The Earls" as Crowley ridicules this theory.

Posted by: Tommy Cranston at October 30, 2011 7:21 AM

The rich will accept a certain amount of abuse because of their insulation - but not infinite. Therefore, absolutist statements by progressives and conservatives on the issue are equally absurd. They'll pay a little extra to maintain a third or fourth residence, but they'll ditch if they feel like they're being treated like a bank account. However, the progressive blind spot is that most businesses and middle-class private sector workers have a much lower tolerance and have been fleeing Rhode Island steadily over the past decade. No, taxing the rich will not solve the structural and exponentially multiplying problems of the state.

Posted by: Dan at October 30, 2011 10:40 AM

"Is calling a politician a politician an attack on their character?"

Nice to see Phil is carrying the unions water. Please Phil, accusing someone of 'cooking the books' without evidence isn't a character attack?

Posted by: Max D at October 30, 2011 1:25 PM

Posted by Dan

"The rich will accept a certain amount of abuse because of their insulation - but not infinite."

For example see the Beatles, they moved to America because British taxes became confiscatory. For a while, they reached 110% on investment income. J.Paul Getty renounced citizenship and lived on a yacht.

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