From Robert Whitcomb's Dec. 15 "Digital Diary'' in GoLocal24.com.
Ken Block, the systems analyst and formerRhode Island gubernatorial candidate, and Alan Hassenfeld, former CEO of Hasbro, are right to urge that Providence promptly be put into bankruptcy protection. (I have said for years that the city should do this.)
The city’s vast $1.9 billion liability for unfunded pensions and capacious retiree health benefits, and largely intransigent municipal unions, make it impossible for the city to dig itself out of its hole unless it goes into bankruptcy, with a highly experienced, decisive and tough receiver appointed by a federal judge to make drastic and long-overdue changes.
The aforementioned liabilities can be blamed largely on past mayors’ (especially the late, outstandingly corrupt thug Vincent Cianci) sweetheart deals with labor unions in return for their political support, and wishful thinking about, for instance, the rates of return possible for the city’s investments.
Paying for this immense debt eats up money that otherwise could go into better city services and lower taxes. Better services and lower taxes would, of course, make Providence much more attractive to taxpaying businesses and individuals that might consider moving to it. The city’ssuperb location, distinguished educational and other institutions (albeit too many of themofficially “nonprofit’’ and thus sharing little of the tax burden) and many cultural charms would have drawn many businesses, large and small, over the past few decades if its fiscal condition had been healthy.
Providence is already effectively bankrupt. It’s past time to accept that and enter a fast and efficient bankruptcy process. Detroit has recently done just that and is now enjoying a revival. So has Central Falls. And Providence has much more going for it in the long run than Detroit, especially in location and institutions. It’s embarrassing for politicians and residents in general to admit that their city is bankrupt, but energizing to know that bankruptcy can help shovel out the manure left by years of irresponsible governance.
Disinfecting Providence’s finances would, of course, be a big boost to all of Rhode Island, which is in many ways a city-state, and indeed to all of southeastern New England, of which Providence is the center.
