In this interview, new Rhode Island Governor Gina Raimondo discusses the amount of fees the pension system pays to Wall Street managers and defends her pension reforms (2:00 mark); she also talks about a possible settlement with the retirees suing the state over those reforms (3:20 mark).
Photo by By Jim Jones (Own work) [CC BY-SA 3.0]
The long-running lawsuit over Rhode Island’s 2011 pension reforms is set to begin on April 20.
Lawyers will eventually argue the law’s constitutionality in front of a jury. But on Tuesday, the lawyers met with the judge presiding over the case to hammer out scheduling matters as the pretrial process continues.
From WPRI:
Lawyers on both sides of the high-stakes lawsuit challenging Rhode Island’s landmark 2011 state pension overhaul met with the judge behind closed doors Tuesday morning as the pretrial process continued.
John Tarantino, a lawyer representing the state, told WPRI.com the jury trial is still on track to begin April 20, as ordered by R.I. Superior Court Judge Sarah Taft-Carter last month.
[…]
Tarantino said Taft-Carter scheduled four pretrial hearings in the suit during Tuesday’s status conference: for Feb. 6, on motions by various municipalities to be removed as defendants; for Feb. 20, on motions to consolidate; for March 6, for advance rulings about the trial; and for March 27, on dispositive motions.
At Tuesday’s status conference, more than two dozen lawyers involved in the case spent about forty minutes meeting with Taft-Carter in a closed courtroom to work through scheduling matters. Taft-Carter made no rulings in the case on Tuesday. She previously said the process for discovery of evidence will end on March 15.
Taft-Carter had previously set a Sept. 15 trial date for the suit but scrapped it as the sides got tied up in pretrial matters.
It’s highly likely the outcome in Superior Court will be appealed to the R.I. Supreme Court no matter which side wins. However, state and union leaders say there is also growing momentum in favor of making another attempt to end the suit with an out-of-court settlement. Raimondo has said she is still open to settling but does not want to change the terms of the settlement agreement that failed last year.
The lawsuit was originally filed in June of 2012 by hundreds of retirees and union members who argue that the state’s reforms aren’t constitutional.
Photo credit: “Flag-map of Rhode Island” by Darwinek – self-made using Image:Flag of Rhode Island.svg and Image:USA Rhode Island location map.svg. Licensed under CC BY-SA 3.0 via Wikimedia Commons
Rhode Island Gov. Gina Raimondo said during an interview Wednesday that she is still hoping for a settlement with public workers in the lawsuit over the state’s 2011 pension reforms.
But while she is willing to settle, she has “no interest” in re-opening negotiations on the reforms.
From NBC 10:
She said during a taping of “10 News Conference” that she is pushing to have pension reform settled, but she is not calling for negotiations.
Raimondo and other state leaders have said they would like to see the pension reform lawsuit settled out of court, and a deal was negotiated that was approved by a majority of the unions involved. But one unit rejected it, scuttling the deal.
The incoming governor says that deal is the best that she will agree to. When the agreement was announced nearly a year ago, she said it preserved the bulk of savings for taxpayers. And as far as she is concerned, while she would prefer to have all sides agree to those terms, she is not willing to offer unions and retirees anything better.
“I have no interest in changing the terms of that,” Raimondo said. “Otherwise, we can go forward with the litigation. The state has a very strong case. But it’s in everyone’s interest to have some finality.”
Raimondo said she will reach out to all the parties to try to reach agreement, but admits it may not be possible. But it’s something she’d like to get finalized soon.
The state’s 2011 pension reforms were especially controversial because they applied to all workers and retirees, not just new hires.
Photo by By Jim Jones (Own work) [CC BY-SA 3.0]
A Rhode Island judge sided with the state on Tuesday when she ruled that a jury will hear the lawsuit over the state’s 2011 pension reforms.
More details from WPRI:
Taft-Carter said that while she disagreed with state lawyers’ arguments that they had a constitutional right to a jury trial in the pension case, she would use her discretion to grant a jury trial in light of what she said is the Rhode Island Supreme Court’s long-stated preference for using juries.
“Being mindful of the importance of a jury trial in this country, and our Supreme Court’s expressed preference in favor of having questions of facts to be tried before a jury even where equitable claims are involved, the court is satisfied that these cases should be properly tried before a jury,” Taft-Carter said from the bench.
[…]
R.I. Superior Court Judge Sarah Taft-Carter read her lengthy decision about the jury trial from the bench Tuesday morning at Newport County Superior Court, where she is currently assigned to hear cases. She announced the trial date after conferring with lawyers from both sides in a closed-door status conference.
At stake is whether Rhode Island legislators acted constitutionally three years ago when they reduced future retirement benefits to shave roughly $4 billion off the shortfall in the state’s pension fund for government workers and taxpayers.
Reactions from lawyers on both sides of the case:
John Tarantino, a lawyer for the state, said he was pleased by Taft-Carter’s decision but that it was too early to say when jury selection would take place or how many jurors there would be. “We think a jury should decide it,” he told reporters. “I’m a big believer in jury trials.”
Lawyers for the union plaintiffs declined to comment on the state’s legal victory Tuesday.
[…]
Tarantino and the other lawyers representing Gov. Lincoln Chafee and General Treasurer Gina Raimondo argued in court filings that the state, as a defendant, has a constitutional right to a jury trial and should be allowed to have jurors decide the case, rather than just Taft-Carter ruling on her own. The lawyers representing the unions and retirees opposed the idea, saying it didn’t fit the legal issues at hand.
The state’s 2011 pension reforms were especially controversial because they applied to all workers and retirees, not just new hires.
Rhode Island is one of a handful of states that tax social security and pension benefits. But the idea of offering a waiver on those taxes is gaining momentum in the state, and the push for retiree tax relief is coming from several directions. The idea has been proposed by labor group leaders, who say a waiver could be part of a settlement in the lawsuit over the state’s 2011 pension reforms. From the Providence Journal:
The president of the Rhode Island retiree chapter of the American Federation of Teachers is “cautiously optimistic” that a waiver of state taxes on pensions and Social Security benefits could provide the framework for a settlement of the high-stakes pension lawsuit. […] Roger P. Boudreau, the state retirement board member who is also president of the Rhode Island branch of the AFT’s retirees chapter, made this prediction on October 28, at an informational meeting of members of the Rhode Island Public Employees’ Retiree Coalition. The coalition was created to represent retirees’ interests in the union challenge to the state’s 2011 pension overhaul. Boudreau could not be reached for comment on Friday. But his Oct. 28 comments were captured in the “RIPERC Legal Defense Fund Newsletter” for October-November 2014 that said, in part: “Roger also expressed cautious optimism that an opportunity to settle the dispute through negotiations with the General Assembly would occur in the upcoming session. One of the things that Roger spoke about exploring is a waiver of RI income taxes for pensions and Social Security; a statutory waiver would have a major impact on retirement security for all retirees, and the labor movement has always represented all workers, including nonmembers, in a quest for economic and social justice.” […] Added Robert Walsh, the executive director of the National Education Association of Rhode Island: ”The idea has been around for years – probably before Gina was Treasurer [and] dating back to the first pension lawsuit. “I think it makes sense either on a stand-alone basis or as part of a larger settlement but no discussions are ongoing that I am aware of, but the retiree group has its own steering committee and lawyer,” Walsh said. “On the bigger issue, I support the resumption of settlement discussions and if there are ideas such as income tax relief on pensions and Social Security that will help resolve the issue they should be fully explored,” Walsh said. “Until the lawsuits are resolved it will be hard to focus on other issues, so a comprehensive settlement would be good for all concerned.”
Unions aren’t the only ones championing the waiver on retirement income. State lawmakers are looking for ways to make Rhode Island friendlier to retirees, although they remain non-committal on specific proposals. According to the Providence Journal:
House and Senate leaders just this week cited tax relief for retirees as one of their top priorities for the new legislative session that will begin in January. […] This was the response from House Speaker Nicholas Mattiello’s spokesman on Friday, when asked if Mattiello had [a waiver] in mind when he pledged on Thursday to seriously consider the exemption of state taxes on pension and other retirement income: “He said the intent of the legislation he is looking closely to enact is to help all retirees and has nothing to do with the pension lawsuit. He said any consideration of the pension lawsuit would be dealt with independently.” When asked Friday where she stood on a state tax exemption for retirement income, Governor-elect Gina Raimondo said she would need to see specifics before she could evaluate the proposal.
In Rhode Island, out-of-state government pensions are fully taxed as income. Photo by John Morgan via Flickr CC License
