Rhode Island has earned kudos for taking the lead in pension reform, thanks to the efforts of state treasurer Gina
Raimondo, who has earned justifiable praise for her work, including from the Manhattan Institute.But in a recent op-ed in the Providence Journal, Raimondo points out that while the state is addressing its pension woes, hard-pressed municipalities around the state, who operate some 36 local pension funds, have a steep task ahead of them. Moody's ratings service agrees.
Raimondo, who has earned justifiable praise for her work, including from the Manhattan Institute.But in a recent op-ed in the Providence Journal, Raimondo points out that while the state is addressing its pension woes, hard-pressed municipalities around the state, who operate some 36 local pension funds, have a steep task ahead of them. Moody's ratings service agrees.
As Raimondo points out in her piece, local pension plans are only funded at 40 percent of their obligations and owe some $2 billion more than they have accounted for. Those pension costs are one reason that Moody's recently warned investors about the deteriorating conditions of local governments in Rhode Island.
As the proprietary report, Rhode Island Local Governments Face Elevated Credit Pressure, noted, those governments "are experiencing economic weakness, revenue stagnation and pension expense growth that are more acute than in most other states and are likely to persist into the future." Ominously, the report also noted that a state program to oversee and help distressed cities "could be overwhelmed by multiple unanticipated local governments seeking state assistance simultaneously." The situation isn't expected to get better any time soon: "We expect few if any rating upgrades and a continuing trend of downgrade activity in the coming year," Moody's observed.
In other words, there's still plenty of work, including pension reform, left to do in Rhode Island.
As the proprietary report, Rhode Island Local Governments Face Elevated Credit Pressure, noted, those governments "are experiencing economic weakness, revenue stagnation and pension expense growth that are more acute than in most other states and are likely to persist into the future." Ominously, the report also noted that a state program to oversee and help distressed cities "could be overwhelmed by multiple unanticipated local governments seeking state assistance simultaneously." The situation isn't expected to get better any time soon: "We expect few if any rating upgrades and a continuing trend of downgrade activity in the coming year," Moody's observed.
In other words, there's still plenty of work, including pension reform, left to do in Rhode Island.
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