Eastbayri.com

Surprise! Providence can’t meet its financial obligations.

For years its mayors, council members and retirement board members were on “benefit steroids.” City workers were granted contracts that a CEO of a major corporation would envy. Many retirees earn double or triple their salaries with lifetime family health coverage. Now the Kleenex is being passed around to state leaders because these profligate spenders sold the city to its unions and political hacks in exchange for re-election or re-appointment. State taxpayers are expected to bail out Providence once again by rewarding the sins of the past. I say “no.”

I admit that I have little sympathy for the plight of Providence except for current workers, many of whom actually do work, as opposed to their no-show predecessors, for their benefits. Regrettably, they bear the brunt of the sacrifices yet they stood silent while their union bosses gouged the taxpayers. It’s obvious that the politicians in Providence never learn fiscal restraint. In fact, they have learned just the opposite since the state has bailed them out continuously with disproportionate awards of subsidies. It’s time to teach the city a new repertoire. Taxpayers in East Providence and Woonsocket (who have their own troubles) and Lincoln and Warren shouldn’t have to come to the rescue anew.

I’m aware of all the rhetoric about how the city can’t fail and the ramifications on the tax base there and elsewhere in the state. Councilman John Igliozzi pronounces in media channels, “We cannot allow the city to file for bankruptcy. It’s unconscionable.” Yet, what truly is obscene is that he and the other long-serving city council members have been less than aggressive in implementing all their fine speeches about fiscal sanity. Providence has its own version of “good cop, bad cop,” wherein the executive branch proposes and the council “complains” but allows the spending to proceed anyway. It’s a tiresome script. Isn’t it time to look at past precedent and see what has happened to other burgs that went into bankruptcy?

One famous bankruptcy occurred in 1994 with Orange County, Calif. failing to meet its $1.7 billion in debt. The bankruptcy judge approved a plan which cut the budget by 41 percent and eliminated 3,400 jobs. The same cacophony of objections and dire warnings preceded the filing. Yet, Orange County stuck with its plan and is on track to cut its payback to creditors. Wall Street rewarded the municipality with an AA credit rating last year.

Certainly, there was initial pain with the dip in real estate values but the market recovered when the anticipated tax increases didn’t materialize. Orange County proves, as does the State of Pennsylvania which defaulted on its bonds in 1842 but is still around today, that bankruptcy is not necessarily the plunge into a dark abyss.

Already, though, you can see Providence politicians panhandling for cash. Other pro-labor legislators like Sen. Elizabeth Crowley and Rep. Agostinho Silva, both representing Central Falls, attempting to limit the fiscal authority of any receiver by obfuscating what is considered a “financial matter.” They rather leave these decisions in the hands of the original gang who couldn’t shoot straight.

So, you have a choice to either shell out again to Providence and establish a precedent of continuing to aid and abet the misfeasors in office, or to draw the line or take the bad medicine now. More bailouts will be in the offing as is the present attempt to jack up the pensions of the retirees in Central Falls. Stop the insanity now. Bankruptcy needn’t be the bugaboo you are led to believe.