Mayor Allen Fung of Cranston, R.I. has a pretty serious warning for the city: reform the pension system or face no trash collection, libraries, and fewer police and firefighters on call. According to The Providence Journal, Cranston has to come up with $14 million in "new dollars" by FY 2012 to accomodate rising pension costs for both the state-run system and the local pension plan. As with Rhode Island's state and many municipal pension plans the problems are the same.Expensive benefits were negotiated and not enough money was set aside.
This has put more pressure on taxpayers. Property taxes in Cranston are
$20.23 per $1,000 in assessed value, one of the highest burdens in the
state of Rhode Island. Across Rhode Island residents are now being hit
with bigger bills for local government. Car owners in many
municipalities now pay higher excise taxes since
the state lowered the allowable exemption from $6000 to $500.
Broadening the tax has led to sticker shock for residents over the
fast-growing bills in their state and local governments.
With an unfunded liability of over $12 billion in a state with a $7.7 billion budget, Rhode Island'sTreasuer Gina Raimondo is calling for drastic changes, including higher retirement ages, reduced benefits, suspended COLAs and the creation of a hybrid plan. She notes,"The pension system's challenges are so great that it will be mathematically impossible to fix without dramatic changes that will affect all stakeholders, not just the youngest and most recent employees,''
For more you can read the Treasurer's report, here.
With an unfunded liability of over $12 billion in a state with a $7.7 billion budget, Rhode Island'sTreasuer Gina Raimondo is calling for drastic changes, including higher retirement ages, reduced benefits, suspended COLAs and the creation of a hybrid plan. She notes,"The pension system's challenges are so great that it will be mathematically impossible to fix without dramatic changes that will affect all stakeholders, not just the youngest and most recent employees,''
For more you can read the Treasurer's report, here.
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