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Gina Raimondo ’98 – Taking on the ‘Third Rail’ of Politics

One evening shortly after taking office as General Treasurer of the State of Rhode Island, Gina Raimondo ’98 was at the state house. With such a large task before her, she decided to do what came naturally to any businessperson who had spent a successful decade in the private sector—she stayed late.

“It was late at night, I was alone in my office, and I walked out to the front door of the State House, and there was literally a padlock on the front door. I was locked in the office,” Raimondo told a crowd at the Manhattan Institute, where she was presented with the Urban Innovator Award in January. Raimondo was honored for wrestling her state-administered pension system away from the brink of insolvency. She did this while working with stakeholders to design a solution that provided public employees with the retirement security they deserved, says Raimondo.

Born in Smithfield, RI, Raimondo studied economics at Harvard, and earned a Rhodes scholarship and a D. Phil in Sociology at Oxford before coming to Yale Law School.

“I came to Yale with an undergraduate and graduate degree in economics … and I could flourish here with those interests at the intersection of economics and law,” said Raimondo during a recent visit to Yale Law School.

After Yale Law School, Raimondo clerked for US District Judge Kimba Wood for the Southern District of New York before entering into the world of venture capital. But one evening she read a newspaper article about a Rhode Island library being shut down due to lack of funding. Raimondo decided she had to do something.

“I have, along the way in my life, benefitted from public services—public parks, public libraries, buses. My father went to college on the GI Bill,” explains Raimondo.

Raimondo was elected Nov. 2, 2010, with 62.1 percent of the vote.

Once in office she turned her attention to the state’s pension system. Rhode Island had a 7 billion dollar unfunded liability—among the highest per capita in the nation. The system was 48 percent funded.

So Raimondo corralled the data into a PowerPoint presentation and spoke at innumerable town-hall-style meetings, time and again answering the anguished accusations of public service employees facing delayed or scaled-back retirement.

And every time Raimondo answered by pointing to the math.

Steering clear of blame and rhetoric were key for Raimondo. She always recognized that public employees had done nothing wrong, she says, but the system was broken and could not be relied upon to provide the retirement security many deserved. The problem also extended beyond public employees. It affected everyone.

“If we hadn’t fixed the pension, we would have seen municipal bankruptcies, really painful, inhumane cuts to other public services,” she said.

In the end, pension reform in Rhode Island came in the form of a new plan that combines defined benefit and defined contribution, and shifts some of the risk from the taxpayer to the employees. The reform also increases the retirement age and suspends cost of living adjustments until the plan reaches a much healthier 80 percent (likely 15-plus years into the future).

The reform passed Nov. 17, 2011, with an overwhelmingly bipartisan vote.

“The larger lesson here is that government can work,” she said at the Manhattan Institute. “Government can solve problems when leaders lead, and citizens engage, and when we focus on the problem and on the solution, and not on the politics.”