A tip of the cap to Gabriel J. Michael – who helped me out a great deal when I was working on our Maryland Pension Map – for sending along this very disturbing piece on the state of Rhode Island’s pension (bankrupt) system.  It’s always nice to start your day by reading about a big problem that is slowly working its way right to your doorstep.

In a nutshell: the $15B pension system in Rhode Island is in major jeopardy.  Too much money going out and not enough money coming in.  But if they want to solve the problem now, before they have to declare bankruptcy, they need to combat all the (very powerful) public sector unions who want what’s coming to them; what’s been promised to them for years and years by a series of eager-to-please politicians.

Rhode Island might be the first state in the country to experience an economic crisis similar to the one faced by Greece, but it wouldn’t be the first time a local government in the US was forced to declare bankruptcy due to its pension and benefit obligations.  The NY Times article includes a few great summaries of towns that have had to do exactly that – and lists off a few states that will find themselves in Rhode Island’s shoes before long.

Fortunately for RI, it sounds like they have a great general treasurer in Gina M. Raimondo.  She has no problem standing up to the public unions and telling them how it is.  Here’s my favorite section from the article: an exchange between a union boss (Valletta) and Raimondo.

“I want to get the biggest travesty out of the way here,” Mr. Valletta boomed from the back of the hall. “You’re going after the retirees! In this economic time, how could you possibly take a pension away?”

Someone else in the audience said Rhode Island was reneging on a moral obligation.

Ms. Raimondo, 40, stood her ground. Rhode Island, she said, had a choice: it could pay for schoolbooks, roadwork, care for the elderly and so on, or it could keep every promise to its retirees.

“I would ask you, is it morally right to do nothing, and not provide services to the state’s most vulnerable citizens?” she asked the crowd. “Yes, sir, I think this is moral.”

Exactly.  Nobody is trying to deny that losing a pension isn’t hard.  But these are trying times, and cuts to nearly every department are inevitable.  Are we supposed to say that the only people who should experience those cuts are the ones who don’t work for the government and who aren’t represented by powerful union bosses?

Standing up to the public unions is going to be hard, and it’s not even always going to seem like the right thing to do.  We are messing with people’s retirement here, after all.  But it really is down to this: are we going to stop funding schools and reduce public safety staff so that a select few can have a more comfortable retirement?