“Municipal tools” summary and legislation

With all the talk of municipal “fiscal stress” of late, (not just the cities of Woonsocket and Central Falls, but also East Providence, Cranston, Warwick and other communities) your Chamber Coalition wanted to take a closer look at the so-called “municipal relief” package being proposed by Governor Lincoln Chafee that will be heard and debated by the House and Senate in coming weeks.

There are seven different components to the legislation as follows:

1.) Allow municipalities with poorly funded pension plans (below 60% funded) to suspend annual cost of living adjustments until the plans are better funded (Reach at least 80% funding.)

2.) Offer mandate relief and binding arbitration reform for four highly distressed communities; Providence, Pawtucket, Woonsocket, and West Warwick. These communities were hit particularly hard (as a percentage of total budget) by the loss of state aid to municipalities in the last three budget cycles. Along with reductions in state aid to municipalities, costly mandates were not simultaneously repealed. This component of the legislation provides mandate relief to control costs and reduce the need for additional property tax increases. It also limits the scope of binding arbitration in highly distressed communities to only salary-related issues and places primary emphasis on a community's ability to pay when deciding awards.

3.) Institute new budget accountability measures for school spending, following numerous cases of significant deficits and fiscal mismanagement by school committees. The state will have greater oversight of school budgets and have an early warning system if schools are spending above their budgets.

4.) Require communities with overly generous (benefits more generous than the state retirement system or the state run municipal retirement system) pension benefits to bring pensions in line with the state system.

5.) Reduce disability pension benefits for employees that can perform other jobs to 50% levels down from the current 66% plus levels.

6.) Advance municipal aid to avoid cash flow problems.

7.) Provide certain exemptions for school maintenance of effort requirements.

Here is the corresponding legislation:

Senate bills with links to legislation (click on number)

S2823 Requires the Commissioner of Education to approve school budgets

S2824 Prohibits municipal contracts from providing more generous benefits than the state retirement (or MERS) system

S2825 Allows suspension of COLAs under certain circumstances

S2826 Gives highly distressed communities authorization to modify public safety contracts

S2827 Advances education aid

S2828 Reduces municipal disability pensions for beneficiaries able to perform other work

S2829 Changes “maintenance of effort” rules for cities and towns

House bills with links to legislation (click on number)

H8006  Gives highly distressed communities authorization to modify public safety contracts

H8007 Advances education aid

H8008 Requires the Commissioner of Education to approve school budgets

H8009 Allows suspension of COLAs under certain circumstances

H8010 Prohibits municipal contracts from providing more generous benefits than the state retirement (or MERS) system

H8011 Reduces municipal disability pensions for beneficiaries able to perform other work

H8012 Changes “maintenance of effort” rules for cities and towns

For questions, comments, concerns or to get involved, please contact David Carlin, Vice President of Government Affairs for the Northern RI Chamber of Commerce and coordinator/lobbyist for the RI Chamber of Commerce Coalition, at (401) 334-1000 ext. 107 or by email at dcarlin@nrichamber.com