The Rhode Island General Assembly approved hotly-contested pension reform legislation in separate sessions Thursday. The Rhode Island Retirement Security Act passed the state House of Representatives 57 to 15 and the Senate 34 to two.
Senate floor debates ended after an hour and 20 minutes with the introduction and passage of only one amendment to the bill. The House session started almost a full two hours before the Senate, but House representatives were still introducing amendments — 27 in total — to the bill after the Senate vote was complete. Of the proposed House amendments, only seven passed.
In a statement released after the bill's passage in both chambers, Gov. Lincoln Chafee '75 P'14 called the bill "a cause for encouragement, but not a cause for celebration," because stabilizing the pension system comes at the cost of benefit reductions to state employees.
General Treasurer Gina Raimondo, who along with Chafee spearheaded the effort to pass pension reform, called the legislation's passage "a great step forward as we continue to work to put our state on a secure path toward growth and prosperity," in a statement.
The law immediately raises the state pension system's funded ratio from 48 to 60 percent and reduces the system's $7.3 billion unfunded liability by $3 billion. Three-quarters of these savings come from the bill's limits on cost-of-living adjustments, which the pension payment increases tied to inflation. The legislation also lowers the total contributions by state and local employers from $689 million to $414 million, which will save taxpayers roughly $275 million in fiscal year 2013.
More than 100 teachers, firefighters and even Rhode Island Tea Party members turned out to witness the final House vote. When the bill was brought to the House floor yesterday, House Finance Committee Chair Helio Melo, D-East Providence, addressed the controversy it has generated.
"After all these months of listening, I am ready to talk about this," Melo said. "The legislation before you is dramatic. The changes are big, and I do believe that it is necessary."
The number of onlookers steadily dwindled as representatives introduced additional amendments to the bill, a process that lasted over four hours. The majority of spectators were vocal in their opposition to the bill.
Tensions ran high as spectators heckled Rep. Michael Marcello, D-Scituate and Cranston, after he praised state employees' work ethic while stressing the necessity of pension reform.
Speaker of the House Gordon Fox, D-Providence, threatened to have hecklers removed, though he acknowledged that the debate was "highly charged." Security arrived shortly after to keep the audience in order. Spectators cheered when Rep. Robert Watson, D-East Greenwich and West Greenwich, spoke in favor of yearly increases to cost-of-living adjustments.
Legislators in both chambers voiced concern about language in the bill related to an increase in the retirement eligibility age to 67, arguing that the mandate would put considerable strain on teachers and public safety workers.
Representatives spoke emotionally about the bill. Many stood up to give personal appeals from constituents about the bill's perceived inequalities. Watson fought hard for the right of retirees to collect annual cost-of-living adjustments, though his amendment ultimately did not pass. Others addressed the legislation's treatment of part-time workers, Rhode Island Supreme Court justices and financial transparency.
State Sen. Harold Metts, D-Providence, said recreation centers in his South Providence neighborhood have suffered deep cuts due to the state's severe budget crisis. He said pension reform would help preserve state-run programs that "kept him off the streets" growing up.
Many representatives threw their support behind the bill prior to the vote but said the legislation is a weak solution to the state's pension problems.
"Unfortunately, I've got to pinch my nose and vote for this stinker," said Rep. Dan Gordon, R-Portsmouth, Tiverton and Little Compton. "It's the best we've got."