Public employee unions won a significant victory last week in their court fight against changes to their pensions made in 2009 and 2010.
The state did not want pension promises it has made to workers over the years to be interpreted as contracts. But that is exactly what Superior Court Judge Sara Taft-Carter did on Tuesday. The state had hoped to squash the case on summary judgment and with it any legal precedent that state employees and teachers have a contractual right to their pension benefits. But that did not happen.
The unions should celebrate this victory — which the AFL-CIO's George Nee compared to a win in the early round of the playoffs — now because even this modest triumph could be their high water mark.
This is not going to end with the unions keeping their pension benefits intact.
Because this entire case, rather than helping determine and shape what is going to come next with Treasurer Gina Raimondo's pension reform plan and the General Assembly's special October session to pass new pension law, will soon be relegated to the status of an irrelevant sideshow by whatever the legislators decide to do.
It doesn't matter what happens next in this case. It doesn't matter what happens to the appeal of Taft-Carter's ruling at the Supreme Court. It doesn't matter what happens to the rest of the case going forward. Even if a judge says tomorrow that the union wins — that pension benefits are an implied contract; that the 2009 and 2010 laws substantially impaired the employee's contract rights, and that the changes were neither reasonable nor necessary to fill an important public purpose. So what?
That victory will last only until the gavel comes down on the special General Assembly session that starts next month.
Remember the 2007 New England Patriots? They won every regular season game that year. Then they won each of their playoff games. People were saying they might just be the greatest team in the history of the NFL. Until the Super Bowl, when they suffered a disgraceful loss to the New York Giants. Does anybody talk about the 2007 New England Patriots any more? No. They are just one more team that couldn't win the Super Bowl.
That’s what is going to happen to Rhode Island’s mighty, mighty labor unions.
When it comes down to the last play from scrimmage in the Big Game at the Supreme Court, when the unions are challenging whatever pension changes the legislature passes this fall, they are going to lose. Because that last legal test a pension change has to pass before it is considered legitimate — is it reasonable and necessary to fill an important public purpose? — is going to be answered in the affirmative when it comes to what the General Assembly does this fall.
For the state not to go broke is a pretty important public purpose. Anyone who tried to argue that it isn't would look pretty silly.
Nor will the unions be able to argue that it couldn't happen. All the attorney for the state would have to do is simply pull out a map and point to Central Falls. Case closed. Central Falls is in bad financial shape, but it is not a situation that couldn't be handled fairly easily except for one thing: the unfunded pension liability. That is what is bankrupting the city and that is what could nudge the state over the cliff of fiscal crisis. It probably wouldn't technically bankrupt the state, but I can't see any judge or panel of judges saying the state actually has to go bankrupt before it can reduce employees’ pension benefits.
So the teachers and state workers are likely to lose some of their pension benefits and they are almost surely going to lose their COLAs. In the meantime, all that court fighting will be an excellent economic development program for lawyers,
Union haters who have been howling “Take away their pensions!” for years now will, alas, have the last laugh.
But make no mistake: what Rhode Island is about to do to its unionized public employees, while it may ultimately be deemed to be legal, is nonetheless morally reprehensible. Don't for a minute delude yourself into thinking it is justifiable, fair or in any way right.
We are putting the screws to people who did their work, who made their contributions with every paycheck they earned, and who trusted the state they served to keep the promises it made to them in return.
This is grossly unfair, but we are going to do it because, apparently, we can.
If this state owed the same obligation that it owes to the pension plan to, say, GTECH, or Hasbro, or CVS or any other corporate entity, we would pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, raise any tax, cut any program to make damn sure that we came up with the money.
But state employees? School teachers? To hell with them!
Imagine you go into a department store. You pick up five items you want to buy and take them to the cash register. The clerk (whose name tag says Gina) rings up your purchases and says, “That will be $200.” You fork over $200 and the clerk takes your money, puts three of the items in a bag, hands you the bag, and says, “Have a nice day!”
You point and say, “what about those other two things?”
Clerk Gina says, “Sorry, the store is going broke, we can't afford to give you those other two items.”
You say, “But you’re not giving them to me. I paid for them!”
She says, “I understand that, but the store is going broke. If we let you take those other two items, we'd have to get two more to replace them and we simply can't afford to do that.”
You (screaming now) say, “BUT I PAID FOR THEM!”
Gina says, “I'm sorry. I know this isn't your fault. I know you didn't do anything wrong, but we have to keep the money you gave us and not give you what you paid for. That's just the way things are.”
You would say: “Oh, I understand. Things are tough all over; I guess I'll just have to absorb that loss.”
No you wouldn't.
You would call the cops. You would sue. You would at least think about burning the damn store to the ground.
That's the position state employees and teachers find themselves in right now. And this isn't a few department store purchases they are being cheated out of. It is the money they are depending on to eat and keep a roof over their heads when they retire. And, as many of the talk radio callers I hear point out, after they retire at 65, they could live to be 80 or 90 years old. (The talk radio callers make this sound like it is a bad thing, and extremely selfish on the part of the pensioners.)
We are going to do something in this state to reduce pension benefits. We may be able to call it necessary. The courts will likely let us call it legal. But in no way, shape or form can we call it right. We should at least have the good manners to be ashamed of ourselves.