Chafee, mayors make pitch to lawmakers

PROVIDENCE, R.I. (WPRI) - Gov. Lincoln Chafee on Thursday proposed a far-reaching legislative package to ease the financial burden on Rhode Island's cities and towns, in an effort to head off more local bankruptcies as a growing number of communities teeter on the brink.

"This is about choices," Chafee, an independent, said during a press conference at Pawtucket City Hall where he was flanked by 10 mayors and town managers. "We've seen what happened in Central Falls and I don't want to see it happen in another community."

The seven bills would free communities from a host of state mandates such as school bus monitors and automatic pay raises. Cities and towns would no longer be allowed to give pension benefits that are more generous than what the state offers. Greater disclosure of the cost of union contracts would be required.

The announcement came a day after Fitch Ratings slashed Providence's bond rating to two notches above junk status and the Woonsocket School Committee voted down a proposal to close the city's schools in April to save money. Mayor Leo Fontaine said Thursday Woonsocket's schools have about three weeks of cash left.

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Chafee said he is "optimistic" about the legislation's prospects in the General Assembly, although it would appear to face long odds, especially in the Senate. House Speaker Gordon Fox and Senate President M. Teresa Paiva Weed issued a brief statement Thursday saying only that they would consider the ideas.

"We look forward to a thorough vetting of Governor Chafee's proposals regarding cities and owns through the committee process," the two legislative leaders said. "The Senate and House are committed to continue working with the administration to address the financial challenges the cities and towns face."

The pair did not say when their chambers would take up the legislation. "I think the General Assembly has shown when they want to act quickly, they can," Providence Mayor Angel Taveras said. "We will be happy to provide testimony."

Chafee and the mayors emphasized the 20% cut in state aid to cities and towns the General Assembly has made in recent years even as annual spending on social services increased significantly, mainly due to rising health care costs.

West Warwick Town Manager Malcolm Moore described the bills as "tools" that would allow other communities to avoid filing for Chapter 9 bankruptcy protection, as Central Falls did last August and Providence is considering. "That's something nobody wants to do," he said.

The bills would be enabling legislation, meaning they would not require municipalities to use any of the new policies, leaving the decision on whether to implement them in the hands of mayors and local councils. Some of them would only be available to "highly distressed" communities, a new category that would currently include Providence, Pawtucket, West Warwick and Woonsocket.

A Wall Street Journal editorial on Thursday morning lumped Providence in with Detroit as two of the most troubled cities in the nation. "There's a shadow cast over our state that we don't want and I think outsiders want to see you bite the bullet, make the hard decisions and get your communities healthy," Chafee said.

John Simmons, executive director of the business-backed Rhode Island Public Expenditure Council, said the legislative package attempts to let municipalities get their finances in order without the state's intervention.

"It is a package that has some sense to it," Simmons said. "This allows for municipal governments to patrol their own destinies."

Organized labor is likely to strongly oppose many of the governor's proposals. The state police and firefighters unions quickly criticized Chafee for undermining their collective bargaining rights. Here are some of the major proposals:

Pensions

• suspend pension cost-of-living adjustments (COLAs) until a pension plan is healthy

• cap pension increases at the rate of inflation

• cap locally run pension benefits so they can't be more generous than the state-run municipal plan

• lower tax-free accidental disability pensions to 50% of salary for personnel who can still work

Collective bargaining

• suspend expired collective bargaining agreements with police officers and firefighters

• require cost estimates of all proposed municipal collective-bargaining agreements

• limit the scope of binding arbitration during contract disputes with police and fire unions

Administrative practices

• require municipal chief executives to approve school department spending

• consolidate municipal and school department administrative functions

• change the timing of when the state deposits its aid payments in communities' bank accounts

• require school departments to track and report their spending to the state on a regular basis

Employment rules

• suspend longevity pay raises for teachers and education-based raises for police

• limit retiree health insurance benefits to the same level provided active employees

• suspend requirement that schools employ bus monitors and "nurse-teachers"

Miscellaneous

• suspend requirement that school districts bus students to private and parochial schools

• allow cities and towns to buy supplies at lower prices through the state system

• exclude deficit reductions when calculating how much a community must spend on schools

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