Or at least The New York Times’ Sunday Business cover piece on Rhode Island’s finances sure is. The glowing 2,500-word profile of the state treasurer and her one-woman crusade to overhaul the state pension system never mentions Gov. Lincoln Chafee’s name, let alone those of the House speaker and Senate president.
Times reporter Mary Williams Walsh’s contribution to the rising tide of Raimondomania forges no new ground when it comes to Rhode Island’s intertwined public-finance crises, though she makes a good analogy between the state and General Motors, noting both strained their pension systems with rounds of layoffs.
Here’s Walsh’s thesis, in a nutshell:
All of this might seem small in the scheme of national affairs. After all, this is Little Rhody (population: 1,052,567). But the nightmare scenario is that Ms. Raimondo has seen the future of America, and it is Rhode Island. As Wall Street fixates on the financial disaster in Greece, a fiscal wreck is playing out right here. And the odds are that it won’t be the last. Before this is over, many Americans may be forced to rethink what government means at the state and local level.
The Times piece includes a few minor points worth correcting for the sake of the historical record:
1. Walsh writes that Raimondo “stood out” during last year’s election “because she refused to promise that state jobs and pension benefits would be protected.” Actually, what really stood out was her eye-popping fundraising prowess, as Tim White reported last year.
2. Walsh notes the Raimondo-chaired state Retirement Board’s April vote to lower the pension fund’s investment return forecast from 8.25% to 7.5%, and says: “As a result of that change, the state’s pension shortfall instantly rose to $9 billion from $7 billion.” Not quite.
First off, the investment return change (which does get most of the attention) actually wasn’t the sole reason the pension liability exploded, as both Raimondo and the NEARI’s Robert Walsh have repeatedly pointed out. The state’s actuary also prepared new mortality tables and wage forecasts that played a big part in the increase.
Second, the pension shortfall instantly rose not from $7 billion to $9 billion but from $4.9 billion to $7.3 billion. The Times’ Walsh may be confusing the $7.3 billion shortfall in the state-run pension system and the $2.1 billion shortfall in the 36 locally run pension systems, which combine to $9.4 billion, as explained on WPRI 12’s newscast Tuesday night.
3. Finally – a small one, but Walsh implies that the Providence library system “lost its financing from the city in 2009, closed branches and shortened its hours.”
What actually happened is Mayor Cicilline shifted the city appropriation from the Providence Public Library to the new Providence Community Library in order to stop branches from closing and slashing their hours, as PPL wanted to do. If anything, the new PCL’s ability to maintain library services in a time of austerity is a counterpoint to Walsh’s broader argument.