In nixing the pension settlement, at least two unions are bringing on the demise of public employees’ pensions. Even if the unions  ultimately win the court case — which is highly unlikely for the reasons set out below — the state would be ordered to restore pensions it cannot pay. A series of municipal bankruptcies will ensue as they try to cough up the money needed to pay the pensions and attendant benefits.

Two United States Supreme Court cases give an imprimatur to the fact that states can adjust pensions without running afoul of a Constitutional prohibition of impairing contracts. The state may do so if there is a legitimate and significant public purpose. In its exercise of police power the state may change pensions if it is reasonable and necessary. If the cost of providing public pensions, therefore, threatens the provision of other essential services or precipitates an insolvency, the standard of "remedying a broad and general social or economic service" is met. Further, it is black letter law that one legislature cannot abridge the powers of a succeeding legislature or bargain away its police power to reduce the pensions IF it is subsequently reasonable and necessary.

In the pending cases there is a plethora of studies, hearings, expert opinions, etc. which led the executive branch of government to propose and the legislative branch to impose the restructuring of the pensions. The factual basis for "reasonable and necessary" exists. The court will be reluctant to invade the prerogatives of two other equal branches of government as long as a factual basis for such action exists.

A disservice has been done to the rank and file members of the respective unions by careless talk that the state or a municipality could sell public assets to pay the pension obligation. There just is no legal basis, for example, to force the sale of the assets of Providence Water or to lease the Pell Bridge. All a public entity need show is that preserving water and transportation are in the public interest and that both ideas are a danger to these duties. One public body out west did lease a bridge tolling operation for 10 years and got deeply burned. The lessee made out like a bandit in revenue collection and then turned over the bridge as a deteriorating asset which required many millions of dollars to rehabilitate. Most futurists see access to clean drinking water to be the next wave of wars. These assets just are not on the table as alternatives to the haircut.

An idea with recent currency is that we can "grow our way" out of the problem by job creation. Unfortunately, the very uncertainty about the lawsuit’s outcome from a business perspective quashes any company’s interest in locating in the state, probably for years, as the lawsuit winds its way through litigation. The unions who are  also calling for tax increases are negating the very economic growth for which they pine since no legitimate company wants to take a chance here on having taxes hiked ad seriatim.

It’s time to stop the la-la wishes about how to pay for the pensions of the past by sprinkling fairy dust on putative ideas. Under any scenario, as sad as it is, even with a total victory the unions win — but lose.

Arlene Violet is an attorney and former RI attorney general.