When ALEC takes over your town
The Rhode Island state legislature finally adjourned its 2012 session around 3:30 a.m. Wednesday. It had been a brutal last few days.
In May, the state Senate had approved a supplemental property tax increase of 13.8 percent, to be imposed on the residents of Woonsocket, a struggling city with a $10 million deficit. But when the bill moved to the House of Representatives, two conservative Woonsocket representatives refused to go along, and no amount of late-night negotiating could change their minds. Everyone finally gave up and went home.
The state has named a budget commission to grapple with Woonsocket’s money woes. Ultimately, though, a receiver may have to be appointed — which is to say, a person not beholden to the voters who would nonetheless have the power to abrogate union contracts and do whatever else he or she deemed necessary to erase the deficit. Incredibly, the two Woonsocket legislators have pushed for a receiver, despite the pain that would likely bring their city.
Or maybe it’s not so incredible. It turns out that one of them, Jon Brien, is also on the national board of the American Legislative Exchange Council, or ALEC. Although ALEC is probably best known for its support of the Stand Your Ground law in Florida, the conservative group has a very clear agenda for dealing with state budgets. It wants to shrink them. Although Brien has denied that he is applying the ALEC philosophy to his small city, it looks, in fact, as if that’s exactly what he is doing. It’s not pretty.
Woonsocket’s problems stem from the decision of Rhode Island’s previous governor, a Republican named Don Carcieri, to balance the state’s budget by cutting state aid to the cities. All of Rhode Island’s poorer cities had become dependent on that aid, so when the economy soured, they essentially ran out of money. Providence had to renegotiate the retirement benefits of its municipal workers. Central Falls actually sought bankruptcy court protection — and a receiver was put in charge of its finances. As for Woonsocket, its current difficulties came to light last fall when the school district revealed a huge, unanticipated budget shortfall.
The two Woonsocket legislators quickly decided to apply Rahm Emanuel’s famous maxim about never letting a crisis go to waste. The fact that their town had a big budget deficit meant that if they played their cards right, they could do a lot more than just fix the schools’ problem. They could actually shrink the town government!
And how does one go about doing that? By refusing to go along with tax increases and forcing the city to the edge of bankruptcy, thus raising the possibility of bringing in a receiver. “You never move faster than when you have a piano hanging over your head,” Brien told me. “The receiver is that piano.”
He went on to say that the municipal unions — police, firefighters, teachers — “have been given pensions and benefits the city can no longer afford” but have no incentive to renegotiate. But a receiver, with the wave of his magic wand, can instantly cut their pensions, and there isn’t a thing they can do about it. When I asked Brien how bad the pension problem was in Woonsocket, he told me he didn’t know. “I’m a state legislator,” he said. “I don’t get into that level of municipal finance.”
Here’s the rub. Pensions are not the core problem in Woonsocket. Yes, Woonsocket has a pension shortfall, but it is more manageable than in many other places and has almost nothing to do with the current crisis.
“The meme in Rhode Island is that if there is a problem, you can trace it back to the public employees,” says Bob Plain, a journalist who runs the website RIFuture.org. In Providence, the pensions, with an annual cost of living adjustment of up to 6 percent, were, indeed, a huge problem. (Note: My brother used to work for Angel Taveras, the city’s mayor.) But that’s just not true in Woonsocket.
Yet, in Central Falls, the receiver took an ax to retiree benefits, cutting them by 55 percent, meaning that many retirees are now getting pensions of under $20,000. The receiver has also laid off city workers, closed the city’s library and shuttered a popular community center. This is the future Woonsocket now faces, thanks to its own legislators.
Shrinking government sounds appealing. We all have our favorite examples of silly regulations and bloated bureaucracies. But struggling municipalities like Woonsocket don’t have a lot of fat; cutting means reducing or eliminating programs that citizens depend on. And, in any case, in a democracy the decision of what — and whether — to cut should rest with elected officials who are responsible to voters, not to an unelected receiver using bankruptcy law to unilaterally make cuts.
That may be the ALEC solution, but it shouldn’t be ours.
Joe Nocera is a columnist for The New York Times.