There's also the question of proportion. Yes, the state's pension problem is growing. But the payment for the next fiscal year, at $238 million, is just three percent of the governor's proposed $7.66 billion budget.

Moreover, lefty economists like Dean Baker of the Center for Economic and Policy Research in Washington argue that the recent trouble with state pension systems has more to do with the stock market crash of 2008-09 than any fundamental problems with the benefit structure.

True, some states like Rhode Island were in bad shape before the white guys at Countrywide and J.P. Morgan ruined everything at the end of the last decade. But that was mostly a hangover from the last downturn in 2000 and 2001, Baker argues.

The market is coming back. And recovery will go a long way toward curing the pension fund's hacking cough. Yes, Rhody's system needs to get healthier, Baker says; 59 percent funded ain't good. But it doesn't have to happen overnight.


The fix

If the thing does indeed need fixin', how to fix it?

Governor Chafee has taken a first step, asking the General Assembly to increase worker contributions to 11.75 percent of their pay. But more fundamental reform is still to come.

During the campaign, Chafee suggested that long-serving, vested employees should keep the retirement benefits they've long expected. But he floated a hybrid plan for newer employees and future hires.

Raimondo seems to be taking a different approach.

She's skeptical of the 401(k) model. Defined-benefit plans are safer, she says. And safe is important when it comes to retirees living on fixed incomes.

The treasurer also seems more inclined to slice into the benefits of those vested employees the governor wants to protect — even though the move is of questionable legality — because that's where you make real headway on the unfunded liability.

Add the political clout of labor, which feels it's given enough in recent years, and you've got the makings of a pension smackdown. Not quite Hulk Hogan versus Macho Man, but we'll take it.


The backstory

It's a voter's dream: your mayor and city council —— no matter how stupid and irresponsible — are forced to the right thing.

Sound impossible? Well, that's pretty much how Rhode Island's Municipal Employees' Retirement System (MERS) works.

It's funded by the cities and towns and their employees, but it's run by the state. And if a municipality fails to put in its actuarially required contribution (enough cash to tend to employees' normal retirement needs and chip away at the unfunded liability built up over time), well, Smith Hill can just deduct the cash from its aid to City Hall.

It's worked pretty well so far. The MERS system was 88.3 percent funded at last count.

Just one problem: only half of Rhody's municipal employees are in the MERS system. The rest, in systems run by the cities and towns themselves, are — in many cases — screwed.


Worst of the worst

There are, in total, 36 pension plans run by cities and towns — plans outside the relative safety of the MERS system. And last year, the auditor general declared 23 of them at-risk.

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