Shortly after her election as Rhode Island’s state treasurer, Gina Raimondo was confronted with spiraling pensions costs that threatened to crowd out public investments in a number of other domains. She was quick to recognize the scale of the problem:
[A]s Ms. Raimondo says, “it’s a small state with not a lot of growth, an expensive cost structure in government, and it’s not a good combination.” Making the state even more expensive by raising taxes would have caused many Rhode Islanders to leave. When the now-bankrupt town of Central Falls raised property taxes to finance worker pensions, many residents fled, sending the city into a tailspin.
Ms. Raimondo spent most of last year crisscrossing the state, educating people about the magnitude of the problem. “I would talk to social workers or social-service agencies who, when I started to talk about pensions, would ask ‘Why should I care about pensions?’ And I said, ‘Because if you don’t, your whatever it is, homeless shelter, is going to lose X thousand of dollars of funding.’”
Republicans often threaten to slash funding for charities and foundations, but Democrats pride themselves on being more compassionate. So when the Democratic treasurer warned “foundations that you’re going to get a cut if we don’t reform,” people believed she was speaking in good faith.
She even managed to persuade at least some public workers, by focusing on the likely alternatives to serious structural reform in the short term:
And she wasn’t afraid to “walk into the belly of the beast” and tell the unions point-blank that “you were lied to [by former politicians] and the system is broken. Today we’re arguing about whether you get a COLA [cost-of-living adjustment], tomorrow we’ll be arguing about whether you get a pension.” Exhibit A was Central Falls, where many retired police officers and firefighters have had their pensions cut in half.
Raimondo is one of the only politicians in the United States, at any level of government, to have successfully conveyed the importance of public sector efficiency. One hopes that she’ll go much further. Please check out Allysia Finley’s excellent interview with Raimondo in the WSJ.