Ted Nesi’s Saturday Morning Post: March 28

Quick hits on politics, money and more in Rhode Island

Happy Saturday! Here’s another edition of my weekend column for WPRI.com – as always, send your takes, tips and trial balloons to tnesi@wpri.com, and follow @tednesi on Twitter.

1. It’s becoming increasingly clear that the proposed pension settlement will be ███████████ ██████ ████ █████ ██ ████████, with both sides ███████████ that the best way forward is to ███████████ ██ ████████. The question now is whether R.I. Superior Court Judge Sarah Taft-Carter will ███ ████ █████████████████ ███████████, or if she’ll █████ █████████ ███ ███ ██████ instead. Until she lifts the gag order, the best guess is that ████ ██ ███████ and ████ ███████ ████ ███████ ██ ███████.

2. Oh wait, I’m not under a gag order! Where were we? So, the retirees have voted yes, Council 94 has voted yes, and various other union locals have gone both ways. What we need to know now is how, exactly, their votes are being weighed by the court. Will there be one big aggregated tally, up or down for everyone? A split into the same six subgroups used in last year’s settlement vote? Something else? If state officials – and the judge – are willing to allow different groups to settle separately, which certainly seems plausible, that means the state already pocketed a key win when the retirees voted Monday to drop their suit. And if state employees and teachers approved it, too, that’s most of the $4 billion savings right there. But a partial settlement wouldn’t accomplish one of state leaders’ other goals: ending the case once and for all. Judge Taft-Carter has enormous discretion over what happens next; the coming days will be spent waiting for her next move – including whether to allow official information on the voting results to be released.

3. Former R.I. Supreme Court Justice Bob Flanders, appearing on this week’s Newsmakers, made an important point that hasn’t been mentioned often: this isn’t actually the last-chance saloon for the pension case to get settled. “It’s very possible that this could be resolved by settlement even at the appellate stage,” Flanders said – meaning the case could get settled after a jury verdict triggers a Supreme Court appeal (but before the high court rules). “The Supreme Court is very much in favor of settlements,” he explained. “They have their own mediation program, which has been so successful that it’s eliminated roughly almost half of the cases that go on appeal to the Supreme Court, after there’s already been a trial. I think the Supreme Court believes that settlements are very much in the public interest, and they do everything they can to foster them, even at the appellate level. Chief Justice Williams, this has been one of his signature efforts, to try and mediate cases and get people to resolve them short of going through the whole trial process, so it’s not surprising to me that he would be deployed in essence to try and bring the parties together on this very difficult case.”

4. Two pieces from the archive worth reading again today: the stark warning about its pension problem Rhode Island ignored back in 1974, and how lawmakers and union leaders put the pension fund’s health in jeopardy.

5. Citizens Financial hit another milestone this week on its path to full independence from RBS, as a $3.2-billion share sale pushed the British bank’s ownership stake below 50%. With Citizens planning to stay in Providence – CEO Bruce Van Saun told me as much on Executive Suite last fall – its corporate health is of keen interest to Rhode Island, which has a dwindling number of major for-profit employers. (Citizens employed 5,370 people locally as of February.) Barron’s, for one, is bullish on the new Citizens. “This is a turnaround worth banking on,” senior editor Lawrence C. Strauss declares in the latest edition. He sees Citizens beefing up its offerings, notably in wealth management and commercial lending, and holding down costs to improve its subpar returns on equity. “For Citizens, the spinoff may be exactly what was needed,” he suggests. “Freed from the parent’s bureaucracy and financial constraints, the bank has been showing renewed vigor.”

6. Frank Rooney, who helped build CVS into the company it is today, died this week at 93. From 1963 to 1986 Rooney was CEO of Melville Corp., and he acquired CVS in 1969 thanks to a tip from a Harvard professor; Woonsocket native Stanley Goldstein, a CVS co-founder, succeeded Rooney and was still chairman when Melville took the CVS name in 1996.

7. Gina Raimondo’s 29-member Working Group to Reinvent Medicaid only has about a month left to come up with roughly $90 million in money-saving changes to program. Slate’s Reihan Salam would likely urge the panel to find ways to squeeze more savings out of Rhode Island’s hospitals. (Working Group co-chairman Dennis Keefe, CEO of Care New England, and other hospital reps on the panel would probably disagree.) “I’ve come to the conclusion that the fight over Obamacare is a distraction from a much deeper problem, which is that America’s hospitals are robbing us blind,” Salam writes, provocatively describing the nation’s hospitals as “predatory monopolies.” Agree or disagree, his argument is worth reading, especially since much of the focus so far has been on nursing homes. Another good read: this Rand study on savings options prepared for Massachusetts in 2009, as recommended by CoffeeBlack RI.

8. The House Fiscal Office suggests Governor Raimondo relies heavily on one-time revenue sources to balance her budget, but Gary Sasse thinks that’s partly the fault of the legislature itself. “This situation you outline develops, in part, because the budget process is out of wack with the natural fiscal calendar,” Sasse wrote in an email. “It makes no sense to base the budget on a November consensus revenue estimate which includes only four months actual experience. A more fiscally responsible process would be to hold the REC in January and have the governor submit a budget plan in February.” But why was it set up that way in the first place? “The only reason for a November REC is to weaken the executive and strengthen the legislative branch in budget negotiations,” he argued. “Just think of the options Governor Raimondo would have had if she should have had an additional $44 million to base a budget on – less one-timers or no health insurance tax?” Raimondo’s office, meantime, has been using the Journal op-ed pages to highlight support for the budget from Don SweitzerGeorge Nee and Joe Paolino – even as the editorial board has been lukewarm to hostile toward it – and is counting on strong support from business leaders to sway lawmakers.

9. Federal Reserve Chairwoman Janet Yellen will be in Providence on May 22 to speak to the Greater Providence Chamber of Commerce at the invitation of Jack Reed. Will she hint at a rate hike?

10. The Washington Post has a new tool to search the Obama White House visitor logs. It shows David Cicilline has been to 1600 Pennsylvania Avenue more than any other member of Rhode Island’s delegation, with 38 visits since 2009. Jack Reed and Sheldon Whitehouse are, fittingly, tied at 28 visits each, and Jim Langevin brings up the rear with 17 visits. Also intriguing: Gina Raimondo met with top Obama adviser Valerie Jarrett in February 2012, long before she was governor, and Lincoln Chafee paid a visit to White House political director Patrick Gaspard in October 2009, shortly before launching his independent bid for governor.

11. “A rare bipartisan health care bill taking shape in the House poses a real gut check for Senate Democrats as to what they care about most,” argues Politico’s David Rogers – poor people or abortion rights? The BoehnerPelosi legislation includes a permanent “doc fix” and funding for community health centers; it passed the House on Thursday 392-37, with David Cicilline and Jim Langevin voting yes. The bill now heads to the Senate, where Jack Reed and Sheldon Whitehouse sound inclined to support it despite the abortion restrictions alarming some of their colleagues. “We need to improve the way Medicare reimburses doctors for the services they provide, but it needs to be done in a fair and responsible way,” Reed spokesman Chip Unruh told me. “It hasn’t come to the floor yet, but Senator Reed will carefully study the House-passed proposal and its cost implications and impacts on programs like CHIP.” And Whitehouse spokesman Seth Larson had this to say: “The Sustainable Growth Rate formula is a big problem that has threatened health care providers for years, and Senator Whitehouse is glad that we’re having a serious debate about how to fix it. He is reviewing the details of the House proposal, with an eye towards whether improvements can be made.” (Read: add more money for his priorities.)

12. Roll Call tagged along for David Cicilline’s bipartisan visit to the House Ethics Committee’s office as he and Virginia’s Scott Rigell continue stumping for their mandatory ethics training bill.

13. Our weekly Saturday Morning Post dispatch from WPRI.com’s Dan McGowan: “The Providence School Board’s quest to convince Mayor Elorza to increase the city’s annual budget appropriation to the school department shines a little light on the uncomfortable situation mayoral appointees find themselves in when they want to challenge their boss. On the one hand, mayoral-appointed boards are favored among school reformers because they remove a layer of politics from the education process. But it’s never easy to publicly call out the mayor weeks after he appoints you such a panel, as Keith Oliveira did this week when he asked how long the city plans to ‘balance our budget on the backs of students.’ Oliveira, who is expected to be appointed board president for a second time in the coming weeks, acknowledged that he’s aware he needs to play nice with the mayor, but said his ultimate goal is to make sure the needs of every student are met. At this point, Elorza has been noncommittal about the amount of funding he wants to provide for the city schools, even as his school department has been planning for a sixth consecutive year of level funding. It’s also too soon to say whether the school board will press forward with urging the mayor to up its contribution to the district or fall in line with whatever decision he makes. Of course, it’s worth noting that this isn’t the first time in recent years the board took on the mayor of Providence. In 2011, the board was strongly considering voting down a proposed teachers’ union contract, but Mayor Taveras had a slight trick up his sleeve: he convinced state lawmakers to pass a bill stripping the school board of its negotiating power. The president of the board resigned shortly after.”

14. Congrats to Foolproof Brewing and Proclamation Ale on making this 101 Best Beers in America list.

15. Brown University economist John Friedman talks to FiveThirtyEight about the government and “Big Data.”

16. A terrific Grantland piece on the late AP sportswriter Dave Goldberg.

17. Henry David Thoreau has some thoughts on our obsession with productivity.

18. One of Rhode Island’s top journalists has just retired, though you might not recognize his name. Tim Murphy, a longtime Providence Journal editor who oversees the paper’s political coverage, finished his run at Fountain Street on Friday. I’ve had the pleasure of working with Tim on polls and debates, and as Tim White puts it, he’s one of the true gentlemen of local news. Better, though, to hear from his colleagues – starting with State House bureau chief Kathy Gregg (who made a cameo on his farewell cake). “A reporter could not ask for a better editor,” Kathy told me. “He is a true professional with a big heart, a great instinct for how to tell a story and a deep understanding of how things work – or fail to work – in Rhode Island.” And the kicker: “He’s also a great whistler. No kidding. He sings and he whistles. Both are happy sounds in any newsroom.” High praise indeed, but as a good editor, Tim would tell me to get a second source. So I asked Journal columnist Ed Fitzpatrick for his encomium. “Tim Murphy is exactly the kind of editor that reporters want to work for and that readers want shaping their newspaper – calm under pressure, possessing a deep knowledge of Rhode Island news, blessed with a sharp Irish sense of humor and a sharp editor’s eye for how to make a story better,” Ed said. “He’s respectful and respected, always a class act. As a Providence Journal reader and writer, I want to thank him for all he’s done here. We’re going to miss him.” So will we. Best wishes in your retirement, Tim!

19. Set your DVRs: This week on Newsmakers – former R.I. Supreme Court Justice Robert Flanders and Common Cause Rhode Island executive director John Marion discuss the pension gag order. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive Suite – East Commerce Solutions CEO Edward Medeiros; Alliance Security COO Brian Fabiano. Watch Saturday at 10:30 p.m. or Sunday at 6 p.m. on myRITV (or Sunday at 6 a.m. on Fox). You can also catch the shows back-to-back on your radio Sunday nights at 6 on WPRO-AM 630 and WEAN-FM 99.7. See you back here next Saturday morning.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi

Comments are closed.