Rhode Island has dug its pension system into a big hole: It's $9 billion in the red.
The nation's smallest state doesn't even have half of the money it needs to pay future retirees. Lawmakers are debating a bill to overhaul the entire system. If they do nothing, it's predicted that in seven years, 20 percent of the state budget will be mailed out in pension checks.
There's a slate of reasons why the pension system is in such bad shape.
"Essentially, lawmakers kicked the can down the road, and they've just run out of road," said Kil Huh, director of research at the Pew Center on the States, summing up the lack of political will that for decades allowed lawmakers to make expensive promises to state workers.
The 2008 crash on Wall Street didn't help, either. It took a big bite out of the pension fund's investments. Retirees are also living longer — a reason why major pieces of the pension overhaul include raising the retirement age and freezing cost-of-living adjustments for current retirees. The initial plan called for freezing COLAs for 19 years, frightening retirees such as 94-year-old Milt Bronstein.
"This proposal, waiting 19 years, God, most of us will be dead and buried by 19 years," he said.
Bronstein collects a $46,000 pension. Changes to the bill mean he'll have to live on that until the pension fund meets investment targets, which lawmakers hope will take only five years.
General Treasurer Gina Raimondo crafted the pension bill knowing she'd hurt retirees.
"As much as I worry about retirees forgoing a COLA, I also worry about young teachers who might be left with nothing, and the average Rhode Islander who certainly has no COLA and probably has no pension and is being asked to pay for this system," she said.
One of the people she has to convince is Democratic state Rep. Ray Gallison, for whom the pension is personal.
"It does hit home. My wife was a teacher; she is now a retiree," he said. "She wasn't in Social Security, so she has to rely on what she has now."
Like Gallison's wife, many Rhode Island teachers don't collect Social Security. Now, after teaching in public schools for 34 years, she might have to live on a pension that will never go up. She didn't want to discuss the issue with NPR, but the couple has spent hours talking about her pension at the kitchen table. Gallison says his wife knows something needs to be done to fix the system. She just doesn't like the idea of freezing the COLA.
"She's threatened ... me to say that I'll have to sleep on the couch, but she understands ... that the benefits she's receiving have to be protected," he said.
Gallison has convinced her that the situation would be worse if the pension system runs out of money.
If lawmakers approve the plan as is, Rhode Island is expected to immediately save $3 billion. That isn't enough to convince state workers that they need to make a sacrifice.
State workers and retirees hate the COLA freeze; thousands of them rallied against it recently outside the Statehouse.
The unions have pushed the legal question of whether state workers have a contractual right to their pensions through to the state Supreme Court. If the justices disagree with the unions and the changes become law, then Rhode Island may go from being a little state with a big pension problem to being a national model for pension reform.