March 23, 2012; Source: Wall Street Journal
This line from the Wall Street Journal’s weekend feature interview of Rhode Island Democratic State Treasurer Gina Raimondo contained an odd aside about Raimondo’s interactions with foundations. In her campaign to fix the state’s pension funding crisis, Raimondo discussed the consequences of failure: cuts in state funding. The WSJ wrote the following:
“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.”
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We didn’t know that the Ocean State typically provided funding to foundations. Raimondo is a former venture capitalist, so perhaps she was speaking loosely about foundations—if the WSJ is accurately quoting her. In any case, Raimondo is feted by many nonprofits for her work on the state’s unfunded pension liability crisis. In fact, Raimondo was motivated to run for office and to fix the pension problem, she apparently told Bloomberg News, because she read that state cutbacks in 2009 might result in cutting library hours and bus service. In Rhode Island, a largely business-funded nonprofit called EngageRI has been enthusiastic about Raimondo’s reforms, to the point of having had to deny having contributed to her campaign. Raimondo herself has apparently defended EngageRI’s unwillingness to explicitly identify its funders because, according to Rhode Island’s NPR station, “Raimondo says potential conflicts are a non-issue since pension overhaul will help the entire state.”
According to a Providence Journal article, some nonprofits were “really scared because they know that, absent pension reform, the cuts in their funding are going to be substantial” based on her statements. The article quoted Rhode Island Foundation president and CEO Neil Steinberg as saying, “If the pension overhaul doesn’t pass, it would significantly impact and imperil funding for education, health care, human services, the arts, [and] affordable housing.” Meanwhile, Robert Walsh, executive director of the National Education Association of Rhode Island has declared that Raimondo’s reforms go “too far” and are “illegal.”
Are nonprofits paying attention to pension reform in various U.S. states? Are they lining up with government officials like Raimondo who are taking on pension reform, or with some organized labor leaders such as Walsh? –Rick Cohen