Will pension triumphalism trump the need to fix the local plans?
That’s certainly the fear of Governor Chafee, Providence Mayor Angel Taveras and Cranston Mayor Allan Fung. Their last-ditch effort to tackle the 36 locally run plans in the new pension law failed, and Chafee told me last week he’s deeply concerned lawmakers won’t want to deal with them in next year’s session.
But they may not have an option, if a new report from Moody’s is any indication (via Bloomberg):
Rhode Island communities face more credit-rating cuts as the local economy declines, property values plunge and pension liabilities rise, Moody’s Investors Service said, citing sharper trends than in most states.
The growing cost of retirement benefits is “reaching a crisis point” for many of its local governments, Moody’s said in a report released today. …
“A lot of national negative trends are particularly acute in Rhode Island,” Naomi Richman, an analyst at the credit rating company in New York, said by telephone before the report was released.
The trend for 2012 is “likely to favor downgrades,” and there will be “few if any upgrades,” Moody’s said in the report. It also warned that a state oversight program, set up in June 2010 to help municipalities facing financial pressures, is untested and may be overwhelmed by multiple simultaneous requests for assistance.
• Related: 13 local pension plans worse than RI’s; Cranston, Scituate lag (Dec. 5)