PROVIDENCE, R.I. — Days away from taking the oath of office that will make her the first female governor of Rhode Island, Governor-elect Gina Raimondo anticipates that public-employee pensions will be one of the first big items she tackles. Again.
Specifically, she anticipates “early” action to try to forge a settlement in the state’s high-stakes legal fight with its public-employee unions over the 2011 pension overhaul she crafted as state treasurer. “It is a priority,” she said.
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With the state already facing a potential $200-million deficit, she said: “It is in no one’s interest to have a pension system which is unaffordable and unsustainable because, if you do that, a lot of people will get hurt.”
“So I will be reaching out,” she said Wednesday in a brief but wide-ranging interview in which she confirmed her intent to try to reopen the pension talks and, in the interim, ask lawmakers to extend the Feb. 5 deadline for the submission of her first budget proposal.
Beyond that, she makes no big promises for her first day in office, her first 10 days or even her first 100 days as governor.
While candidate Raimondo rode to office on promises to turn the state’s struggling economy around — and spark the creation of thousands of new jobs — Raimondo-the-realist says these are goals over a four-year term.
“Every Rhode Islander knows we are facing serious and nearly unprecedented economic challenges,” she said. “Compounding that, people are beginning to lose hope, and I would like the people of Rhode Island to know that I am aware of how bad it is.”
But, she adds, “It isn’t going to be fixed all at once. There is no one silver bullet, or one action that is going to get us out of it. But we will meet the challenge. We have everything we need to turn the economy around and to make our state government … higher functioning, and to fix and improve the way we do economic development.”
“And we will do that over time,” she said. “So don’t lose hope.”
Here is a sampling of some of her comments on a potential pension settlement, House Speaker Nicholas Mattiello’s tax-cutting priority, and “the mess” she says she is inheriting at the state child-welfare agency known as the Department of Children, Youth and Families.
Asked if she intends to push for a change in the state laws that govern the child-welfare agency, Raimondo answered this way: “I have deep and grave concerns about the way DCYF is being run. There are cost overruns as well as evidence that the department isn’t being well-run … [as was] well-documented in a report Governor Chafee commissioned.”
“So I am inheriting a mess in that department. And it is going to be a priority of mine to clean up the mess, because it is not fair. That department cares for the most vulnerable families and kids in Rhode Island and they deserve better than what they’ve been getting.”
Raimondo says she has not decided who should head the department. State law requires the DCYF director to hold a master’s degree in social work or “a closely related field” and have “demonstrated experience” in child welfare, children’s mental health or juvenile justice.
The director must also have at least five years of “increasing responsibility in administering programs for children.”
Asked if she intended to seek a change in this law, Raimondo said, “it has become clear to me that some [aspects] of the state’s personnel systems … are a little bit antiquated,” especially as they relate to “director-level hires.”
“It may be that the legislature and I have to work together to make some modifications so that we can do a better job of running the government.”
With respect to DCYF specifically, she said: “Certainly you need someone who cares about children and families and knows that world, but more than that, you need someone who is a good administrator and a good manager and a good negotiator of contracts. … And it is not clear that the best person to do that would be a social worker.”
Taxes and spending
She left open her stance on the proposal Mattiello has called his top legislative priority in 2015: the exemption of Social Security income from state income taxes, at a potential cost of $20 million-plus.
Raimondo said she is aware this is a priority for Mattiello and added, “I am open to it.” But, she said, she will evaluate the proposal the way she does any decision, by asking: “How does it create jobs? … How does it put us on a long-term path to growth?”
On her willingness to trim Medicaid eligibility and other benefits, as Mattiello has suggested, she said: “Certainly, we have to look at Medicaid …. It is more than a third of the budget … [but] it is not about cutting benefits per se. It’s about doing a better job of delivering care in a way that is efficient and effective and, in the process, cutting costs.”
Pensions
In November 2011, state lawmakers overwhelming approved a dramatic restructuring of the state pension system to save taxpayers an anticipated $4 billion over the next two decades. It cut benefits, raised the age-threshold for collecting a pension, and suspended the payment of annual cost-of-living adjustments (COLAs).
The public-employee unions sued. A proposed settlement emerged from court-ordered mediation.
Tacitly approved by the vast majority of the state’s unions, the proposed settlement was torpedoed last spring by the smallest of the six public-employee groups voting on it: a group representing about 417 municipal police officers. The judge has since set an April 20 trial date.
“A lot of work and good will went into the terms of the settlement agreement,” said Raimondo, who hopes to revive it. “It gives them peace of mind that their pension will be there … and that it is affordable for the state of Rhode Island.”
Should the state lose the lawsuit, “there would almost certainly be a number of municipal bankruptcies … [and] if we don’t fix the system, eventually you are going to have to go to retired people and cut their pensions … and that would be a terrible thing.”
On Twitter: @KathyProJo