Legal setback for Prov. in high court

PROVIDENCE, R.I. (WPRI) - The Rhode Island Supreme Court on Friday declined to grant Providence an expedited appeal of a retiree benefits ruling against the city, potentially pushing the capital closer to bankruptcy.

In a three-page order, the justices let stand an injunction issued last month by Superior Court Judge Sarah Taft-Carter blocking the city from unilaterally moving police and fire retirees to Medicare. Their decision means Providence will be unable to book $6 million in expected savings from the change this fiscal year.

"We see no need to engage in a precipitate consideration of issues which are best resolved with the aid of a more complete record," the five justices wrote in the unsigned order.

Taft-Carter will begin a full trial on the case by May 21 and will try to issue a decision before June 30, the order said. "This case involves significant legal issues, the judicious determination of which is of the utmost importance both to the parties and to the public," the justices said.

Providence Mayor Angel Taveras warned last week the decision to keep retirees' current Blue Cross health benefits in place had pushed the city to "the brink of bankruptcy," though he expressed hope on Monday that could be avoided . The mayor said Friday he respected the justices' decision but said it would cause problems.

"Today’s decision makes the extreme challenge of closing this year's deficit even more daunting," Taveras said.

Moody's Investors Service said Tuesday the injunction blocking the Medicare change jeopardized "a relatively small, but important component" of Providence's plan to close a $22.5 million deficit for the fiscal year that ends June 30. The rating agency said the ruling could cause a downgrade in the city's credit rating.

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