Rhode Island Gov. Donald Carcieri last week declined to sign off on legislation aimed at offsetting the state’s fiscal 2009 deficit, allowing it to become law without his signature.
The state has an unfunded pension liability of $8 billion. Carcieri’s reforms, which legislators did not include in the deficit mitigation bill, would have saved $43 million in pension costs.
“Absent significant changes to the pension system, the cost to taxpayers will double in less than 10 years. That is unacceptable,” the governor wrote in an April 7 letter to legislative leaders. “I am well aware of the General Assembly’s commitment to make significant changes to the public employee pension system before the end of June. Because of that, I will allow this supplemental budget to become law without my signature. I trust the General Assembly will deliver on its commitment to achieve the savings in this fiscal year and going forward.”
Greg Pare, spokesman for Senate President Teresa Paiva-Weed, said legislators are working on pension reform measures and expect to pass those initiatives in June.
“They just want to do it right and get all the appropriate studies,” Pare said.
The deficit mitigation bill will address a $357 million shortfall in the current $7.22 billion budget with $270 million of federal stimulus funds, tax hikes on gas and cigarettes, and motor vehicle fee increases. The bill will also cut aid to municipalities and education programs.
The state carries ratings of AA from Standard & Poor’s and and AA-minus from Fitch Ratings. Moody’s Investors Service rates the credit Aa3 with a negative outlook.