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Pension reform can be hard to talk about. In the long run, reform now means fewer demands for layoffs and less draconian measures in the future. It's in the best interest of all Californians to fix this system now.

Union leaders argue that pension shortfalls account for a proportionally tiny portion of governments' financial problems, and by all accounts, there are plenty of parties to blame for the growth in payrolls and obligations.

They said it was impossible to touch the third rail of politics, to take on public-sector unions and to reform a pension and health benefits system that was headed to bankruptcy. But with bipartisan leadership, we saved taxpayers $132 billion dollars over 30 years and saved retirees their pensions. We did it.

But Connecticut and Rhode Island have originally realized the most perfect polity as to a legislature.

My vision for a better Rhode Island starts with a simple idea - we are all in this together.

In many cases, Rhode Island is just not on the radar of a lot of companies. But once companies or people take the time to look at our high quality of life, low cost of living, great talent, good business environment, often people see it's an excellent place, and they want to take a harder look.

We can't reform mandatory spending in this area until we first deal with ours. I tell my colleagues, 'Let's get the moral high ground and demonstrate that we want to make changes to our pension, and then we can deal with the big problems.'

During my four years as treasurer, we restructured our pension system, cutting the state's unfunded liability almost by half and putting our retirement system on stronger footing.

This crisis exposed very significant problems in the financial systems of the United States and some other major economies. Innovation got too far out in front of the knowledge of risk.