In an op-ed for CT News Junkie, Yankee Institute Deputy Director Heath Fahle compares Connecticut to its next-door neighbor Rhode Island in terms of each state's approach to pension and Medicaid reform. The result? Rhode Island is making the hard decisions while Connecticut lags behind.
Faced with the same problem of Connecticut, inability to pay the promised pension benefits with the current system, Rhode Island's Treasurer, Gina Raimondo, led a reform effort. When fully implemented, the changes will secure the long-term future of the pension system while providing greater stability for the state. Connecticut has not done this:
In contrast, Gov. Dannel P. Malloy offered a plan to supplement the state’s annual retirement contribution with a catch-up payment to pay off the unfunded liabilities over time. The plan relies on either (A) Malloy continuing to be governor for a long, long time or (B) the General Assembly to act far more responsibly for the next 20 years than they did for the previous 20 years. The measures are a temporary Band-aid rather than a real reform.
Medicaid consumes slightly less than a quarter of every dollar spent by the State of Connecticut, yet lawmakers have done little to reform that program to reduce costs. In fact, most reform proposals would have actually increased costs.
They went a different direction in Rhode Island. Armed with a waiver from many of the federal rules and regulations, Rhode Island officials overhauled their program in 2009 and 2010. The Wall Street Journal reported on the results last week:
As noted in the Wall Street Journal this week, the reforms worked. “Since the waiver, the state’s official Medicaid documents show that costs rose an average of only 1.3 percent a year from 2009 to 2012 — far below the 4.6 percent rate in the other 49 states.”
The fact is that Connecticut will continue to lag behind until we begin to reform.