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Governor recommends one-year pause on supplemental rainy day and pension transfers; unions oppose
Summary
The administration told the House Committee on Finance it plans a one-year suspension of statutory transfers that split fiscal year surplus funds between a supplemental reserve account and the state employeesretirement system, freeing about $43.3 million to help balance the governors budget; labor groups testified against the pause.
The House Committee on Finance heard administration testimony that the governor's budget would suspend for one year both the supplemental rainy day transfer and the supplemental transfer to the Employees' Retirement System of Rhode Island (ERSRI). The pause is intended to use roughly $43.3 million of surplus fiscal 2024 revenue to help close the current-year budget gap.
Sharon, the administration presenter, explained the background: in 2023 the General Assembly established a supplemental reserve account seeded with $55 million and created a mechanism to dedicate half of any revenues above final estimates to that account and half to ERSRI. "The proposal before you this evening is to suspend both transfers, but only for a single year," she told the committee.
State Budget Officer Joe Cadiga emphasized the suspension would pause a supplemental contribution that is in excess of the state's actuarially determined pension payment but that the state would continue to make its required actuarial contributions: "we are proposing, yes, to pause a supplemental contribution to the pension fund, but I do want to be clear that we continue to make our actuarially required contributions to the pension fund." Cadiga said the surplus was larger than expected due in part to an IRS tax-filing delay that shifted receipts into July and that the administration views the amount as a one-time windfall better used to address this year's deficit.
Union and labor witnesses testified in opposition. Jim Centorini of AFSCME Council 94 told the committee: "we are opposed specifically to budget article 2, section 3." Jim Parisi of the Rhode Island Federation of Teachers and Health Professionals said the roughly $21 million portion affecting ERSRI "is not an insignificant amount of money" and urged the legislature to keep the supplemental transfer in place to aid pension funding and restore COLAs over time. Patrick Crowley of the AFL-CIO also testified against the pause.
Members pressed administration witnesses on the pension funded ratio, statutory thresholds for COLA restoration, and timing for reaching target funded ratios; Cadiga cited a recent valuation placing the fundat about 60 percent funded and projected reaching approximately 80 percent by 2030 under current assumptions.
The committee took testimony and requested additional actuarial and budgetary detail; no formal vote was taken at the hearing.
