Tuesday, March 20, 2012

Cardiac rehab before the heart attack

Gary Sasse and Robert Flanders wrote a sobering commentary piece in the Providence Journal on the options available to Rhode Island communities, more of which are facing the reality that they can’t pay their bills. They’ve made it painfully clear that the only option left might be Chapter 9 restructuring.

The comprehensive article describes in detail some of the important considerations and protections of a Chapter 9 filing that can bring them through their fiscal catastrophe without permanent stigma.

Among them are:

1. Bond holders, the people that actually lend the money to towns, are protected from loss,
2. Local governments have professional and accountable management,
3. Efficient and transparent communication with rating agencies and state government,
4. Cooperation from stakeholders,
5. Effective monitoring of negotiated agreements.

It would seem that if every municipality had been following the above prudent policies all along, few would have to face bankruptcy today.

It’s like people who suffer a heart attack; had they done their cardiac rehab activities in the years BEFORE their heart attack, far fewer would suffer one.

In addition, I would encourage that the names and votes of all those involved in municipal contract negotiations, both union and non-union, be made available on the web. If people know that their participation and actions will be permanently known to all, they might be more careful in making their choices, which now play such a huge role in the fiscal disaster that faces Rhode Islanders today.