Rhode Island Treasurer Wins Governor Race Despite Pension Overhaul Support

Gina Raimondo became the first Democrat elected governor in Rhode Island since 1992, overcoming opposition from government workers for her role in pushing through cuts to retirement benefits.

The 43-year-old state treasurer and former venture capitalist defeated Allan Fung, the Republican mayor of Cranston, by 40 percent to 36 percent yesterday, with 99 percent of precincts reporting, according to Rhode Island’s board of elections. A third-party candidate, Bob Healey, took 22 percent.

As states and cities were reeling from the recession’s aftermath in 2011, Raimondo gained national recognition for backing overhauls to Rhode Island’s pension system that lifted the retirement age, put workers into 401(k)-type plans and suspended raises for retirees until the system was on a better footing. She built her campaign around her success at cutting pension costs, while pledging to revive the economy.

“Rhode island is ready for a governor that is going to turn this state around,” she said in a speech to supporters in Providence after results were in. “It’s time to get Rhode Island back to work.”

The pension changes, forecast to save $4 billion over two decades, drew support from voters who saw it as a sign of political courage to challenge the public-employee unions that traditionally back Democratic candidates. The steps cost her the support of the unions, who faulted her for pushing the changes through legislation instead of negotiation.

Ripple Effect

Her victory may resonate with other Democrats who are seeking ways to deal with climbing retirement costs, said Darrell West, the director of governance studies for the Brookings Institution, a Washington-based research group.

Nationally, states and local-government pension plans have about $1.3 trillion less than they need to cover promised benefits, according to the Federal Reserve.

“It could embolden other politicians,” West said in an interview before the election. “It means that a Democrat can take on public-sector unions on pension reform and survive.”