Unions to RI: Negotiate a pension deal before you lose in court

From Smith Hill to Providence and Pawtucket, government lawyers have been batting zero in their efforts to convince Rhode Island judges to uphold changes to public-sector workers’ retirement benefits.

That’s why the four state leaders who pushed through the new pension law should start formal negotiations with union leaders on an alternative overhaul of the system before they lose in court, according to Bob Walsh of the National Education Association Rhode Island.

“The legislative victory that the folks who supported changes in the pension system achieved is going to be short-lived – because it was illegal,” Walsh told WPRI.com on Tuesday. He suggested state leaders should appoint a neutral mediator such as former R.I. Supreme Court Chief Justice Frank Williams to start talks between the two sides.

The unions haven’t filed an injunction to block the new law from taking effect because it won’t impact active workers until July 1 or retirees until Jan. 1, when they miss their first cost-of-living adjustment, Walsh said. Superior Court Judge Sarah Taft-Carter already gave the unions a first-round victory last fall in an existing suit challenging earlier pension cutbacks.

Labor ‘realists’ will OK changes

Other states made less dramatic pension changes recently, including a 30-year refinancing of Massachusetts’ unfunded liability and a decision by Connecticut last month to hike its yearly pension fund deposits.

“The realists among labor leadership understand changes have to occur [in the pension system],” Walsh said. “I don’t necessarily believe that our successful efforts in court will lead to a judge saying, ‘Put everything back the way it was.'”

“I believe that our successful efforts in court will lead a judge to say, ‘The legislature went too far. They need to come up with a plan that doesn’t go too far, because there were more reasonable, less egregious alternatives,'” he said.

What would those more reasonable alternatives look like? Walsh, who served on the Chafee-Raimondo pension advisory group, give a strong hint in an op-ed last October, including a capped, inflation-indexed COLA for all retirees. He and other labor officials also offered extensive testimony about their views during an Oct. 26 joint finance committee hearing.

Chafee worried about a loss

Raimondo has repeatedly expressed confidence that the whole pension law will stand up in court, although she told WPRI.com last month she worries about the alternative. Chafee has expressed more concern; his administration considered putting money in escrow as part of the 2012-13 budget in case it loses but opted not to.

“You have to put your best legal case forward and try and win,” the governor said on WPRI 12’s “Newsmakers” last week. He added: “Certainly that does not help our court case, if you have escrow money. So we’re in a rock and a hard place. These are real issues.”

Walsh said the public debate was “too inflamed” against labor last fall for a discussion of a negotiated deal in Rhode Island.

“This was the weapons-of-mass-destruction approach – the public was convinced by Engage Rhode Island and The Providence Journal that the unfunded liability was a weapon of mass destruction, and the politicians herded behind that message and thought there was no alternative,” he said.

Retirees, workers will both sue

Now Walsh wants one or more of the quartet behind the pension law – Chafee, Raimondo, House Speaker Gordon Fox and Senate President M. Teresa Paiva Weed – to step forward and kick off serious discussions with the unions on a compromise before a judge acts.

“Real political courage will be sitting down with us and working this out,” he said. “It took absolutely no courage to vote with the trend last year. … Real political courage is [for lawmakers] to go to their leadership and say, ‘Hey, the unions told us the truth – they have a good story to tell in court. Let’s sit down with them and work it out or the state’s going to lose.'”

On the legal front, Walsh said the unions have teams of lawyers working on the “planning and coordination with these fairly massive lawsuits that will have to be filed” to challenge the pension law. Retirees and current workers will need to file separate suits, and national groups will likely provide support, he said.

Officials in Providence have noted repeatedly that unions cannot negotiate for retirees. That holds true at the state level, as well, Walsh said, but if union leaders reach what they consider to be a reasonable deal with state officials they will push retirees to accept it and withhold financial support from any further challenges.

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

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