Pro-Pension Reform State Treasurer Wins Primary Nod

Published September 10, 2014

In a victory overshadowed somewhat by more glamorous primary election returns, Rhode Island state treasurer Gina Raimondo successfully gained the state Democratic Party’s nomination for governor.

Raimondo, who has spent her term as state treasurer focusing on and working to enact public pension reforms, came under fierce criticism from primary challengers and public-sector labor unions for her support of pension reform. However, Providence mayor Angel Taveras and area lawyer Clay Pell split the anti-reform vote, and Raimondo prevailed.

In addition to their ongoing legal fight to undo the reforms successfully advocated by Raimondo, public-employee unions spent historic amounts of money and time trying to end her primary bid, with spending exceeding $12 million.

Anti-Reform Votes Split

Despite the massive effort, Raimondo garnered roughly 46 percent of the Rhode Island Democratic Party vote, with her two main challengers taking roughly equal splits of the anti-reform vote. According to the Providence Journal, teachers unions primarily backed Pell, and government employees threw their support behind Taveras’ candidacy.

In addition to receiving money extracted from mandatory union fees placed upon Rhode Island teachers’ salaries, Pell—the husband of celebrity Olympic figure skater Michelle Kwan—pitched his ability to self-finance a campaign as a selling point, claiming he would not accept donations from lobbyists or special interest organizations.

Pell’s wealth was also cited by union supporters, leading National Education Association of Rhode Island Executive Director Robert Walsh to quip, “Ask not for whom the Pell polls, he polls for thee.… This man is Rhode Island.”

Praised for Reforms

Reform supporters have praised Raimondo as unafraid to touch the “third rail” of state politics: public pension system reform. In 2012, Rhode Island carried unfunded pension liabilities exceeding $90 billion, and owed state vendors more than $8 billion.

Some reforms enacted by Ocean State legislators at her behest include a hybridized defined-benefit and defined-contribution plan to share the state pension plan’s investment risk with state employees and retirees; reining in unrealistic cost-of-living adjustments; and raising the retirement age.

In recent months, Raimondo was attacked by challengers as being a Wall Street insider and pushing unnecessary anti-worker reforms to enrich herself and wealthy investors. In one campaign ad, Taveras accused Raimondo of accepting a “secret contract managing taxpayer money that ensured that her venture capital firm was paid whether they made money or not,” suggesting “Rhode Island deserves a governor who has a record of standing up to Wall Street.”

Raimondo, however, hit back at her opponents’ claims. In late August, she returned fire at Taveras, explaining, “When I became treasurer and inherited the pension crisis, I knew if we didn’t face up to the problem a lot of people were going to get hurt. And we couldn’t let that happen.”

In the November general election, Raimondo will face Cranston Mayor Allan Fung, the winner of the state’s Republican Party primary.

Jesse Hathaway ([email protected]) is managing editor of Budget & Tax News.