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Cities, Towns Sue Rhode Island Over Pensions, Benefits Law

Municipal leaders have filed a legal challenge in Superior Court to the new "financially irresponsible lifetime contracts law.” Gov. Gina Raimondo signed the law at the behest of the state's public employee unions.

(TNS) — Rhode Island's municipal leaders have filed a legal challenge in Superior Court to the new "financially irresponsible lifetime contracts law'' that Governor Gina Raimondo signed at the behest of the state's public employee unions last spring, over their own vehement objections.

In a press release issued in advance of a 9:45 a.m. press conference on Tuesday at North Providence Town Hall, Cranston Mayor Allan Fung said: "As the costs of health care, pensions and retiree benefits keep rising, taxpayers will get crushed if local leaders can't renegotiate those benefits."

"A contract's terms cannot go on forever. That defies logic and is financially irresponsible," added North Providence Mayor Charles Lombardi.

"If mayors and town managers can't negotiate to reduce costs, the alternatives are going to be cuts to important services or property tax increases. We can't allow that to happen." Lombardi said.

The lawsuit headed for Superior Court contends the new law extending union contracts indefinitely after they have expired is "an impairment of existing contracts under the state Constitution's Contract Clause, as well as a violation of the Home Rule provision of the state Constitution, which grants cities and towns the authority to decide local matters."

Raimondo issued the following statement Tuesday morning: "The lawsuit was just filed this morning and we haven't had a chance to fully review it. The legislation passed by the General Assembly last session was narrowly tailored to return to what was the status quo for decades in Rhode Island, and we're confident it will stand. "

Raimondo spokesman Josh Block said, "We're disappointed that some local leaders have chosen to take the unusual step of suing the General Assembly and the Governor. We are confident the law enacted to protect our municipal employees and teachers will withstand this legal challenge.

"This law requires all municipal leaders to come to the negotiating table in good faith. It protects wages and benefits when a contract has expired so that these employees can continue to serve their communities and our children. This law, which had been standard practice for many years, is fair to both sides and creates a level playing field for all parties."

The law firm Greenberg Traurig, with lawyer - and former Providence mayor - Angel Taveras as lead counsel, is representing the 16 cities and towns.

The unions pushing for a continuing-contracts law since 2007 openly acknowledged it was aimed at preventing cities and towns from ever again unilaterally cutting pay, increasing health-care contributions and imposing what they view as disruptive work shifts on public employees, as happened in a handful of communities during past contract disputes.

The continuing-contract bill indefinitely locks in wages and benefits in expired public-employee contracts. The teacher union lobbyists who took the lead in pushing the bill said it was aimed at preventing cities and towns from unilaterally slashing pay and making employees pay more for their health insurance during deadlocked negotiations.

Senate co-sponsor Valarie Lawson - the paid vice president of the National Education Association of Rhode Island - told colleagues last spring: "We can make sure no other community in Rhode Island faces what we faced in East Providence,'' including a unilateral salary cut and a stepped up co-share for health coverage during a bitter contract war a decade ago in the district where she teaches high school social studies. (The R.I. Ethics Commission subsequently ruled she had no conflict of interest.)

The counter-argument from the mayors and town managers: "Personnel costs typically account for 70% or more of municipal and school expenses (wages, health care, pension and other benefits), most of which are governed by collective bargaining agreements. Meanwhile, those cities and towns with locally administered pension plans face $2.5 billion in unfunded liabilities. The Lifetime Contracts Law prevents municipalities from negotiating fair contracts that reflect a community's priorities and ability to pay."

Their argument: "The Governor and General Assembly overstepped their authority by taking power away from municipal leaders in violation of the state Constitution."

The communities filing the suit include Barrington, Bristol, Burrillville, Central Falls, Charlestown, Cranston, East Greenwich, Lincoln, Little Compton, North Kingstown, North Providence, North Smithfield, Pawtucket, Providence, Smithfield, Woonsocket. Additional communities may sign on as Plaintiffs.

"The capital city is joined by municipalities from around the state to oppose this legislative overreach that aims to strip municipalities of our authority to negotiate and contract in good faith on behalf of our taxpayers and union members," said Providence Mayor Jorge O. Elorza. "This legislation ties our hands and puts further constraints on our already limited resources, setting us up for fruitless and difficult negotiations with our public employees."

In May, Democrat Raimondo signed the continuing-contract bill into law, two years after vetoing a version of the bill.

In a 2017 veto message that echoed the strenuous arguments raised by city and town leaders, Raimondo wrote: "Current Rhode Island law protects the taxpayers from being obligated indefinitely for contract provisions that, in the future, may not be affordable.

"The proposed legislation before me extinguishes this existing protection, hurting the public's position in contract negotiations, and placing taxpayers at risk of being forever locked into contractual provisions they can no longer afford,'' she said then.

In a statement explaining her turnaround last spring, Raimondo on Tuesday said the earlier continuing-contracts bill "went too far in automatically extending all provisions in collective bargaining agreements for municipal employees and teachers until a successor agreement has been reached."

The version she opted to sign "only" locks in wages and benefits, she said.

"In the rare instance where an agreement is not reached by the time arbitration concludes, contractual provisions related to wages and benefits — and only wages and benefits — would continue under this bill until a new agreement is reached. Every other provision would expire," she said.

Her bottom line: "Protecting an individual's wages and benefits from being unilaterally cut after a contract expires is fair to workers. But it also means that workers would not receive future wage increases without remaining at the bargaining table. It also does not bind cities and towns to any other provisions of the expired contract.

Raimondo's shift came after she won the endorsement of the National Education Association of Rhode Island and other unions in her 2018 reelection bid.

©2019 Newport Daily News, R.I.. Distributed by Tribune Content Agency, LLC.

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