Rhode Island’s pension picture is getting increasingly alarming. Soaring unfunded liabilities are pushing the state toward bankruptcy, and putting a mounting strain on both state and local budgets. Money that could be spent on such vital (and job-creating) services as road, bridge and train-station repairs is instead being siphoned off to fund pensions that are, in general, vastly more generous than in the private sector.

As a state Senate panel studies the problems facing the 24 municipal-employee plans in Rhode Island, state Auditor Ernest Almonte testified that they now have a combined unfunded liabilty of $1.7 billion, something he called “very devastating.” Add state-employee and teacher pensions, and some believe that Rhode Island faces a debt of about $7 billion. (That Rhode Island has too many local jurisdictions for such a minuscule state helps drive up pension costs. This unsustainable system may be on the verge of crashing. Leaders seem flummoxed about what to do.)

A House panel studying the impending pension disaster last year approved a series of controversial cost-cutting reforms. But, after public-employee unions screamed bloody murder, the General Assembly never followed through.

Similarly, the League of Cities and Towns pushed a plan to require higher contributions from the employees themselves, higher health co-pays, a higher retirement age (the astonishingly early and well-compensated retirements of some public employees outrage the public), and the requirement of more years of service. Governor Carcieri proposed a similar plan, one that would, in addition, end cost-of-living adjustments. These are all good ideas.

But the General Assembly effectively ignored them.

There are some who say it is too late for even those reforms. Stephen Laffey, who as mayor of Cranston dealt with one of the worst municipal financial meltdowns in America, says Rhode Island must do what many businesses have done: End the pension program, give out checks to people who have paid into it, and switch to a 401(k)-style retirement plan.

The state cannot become economically competitive and provide strong public services and maintain infrastructure when it faces such pension liabilities, one reason that the Pew Charitable Trusts’ Center on the States recently named Rhode Island and Arizona as the two states that face the greatest risk of a fiscal calamity after California.

Leaders must explain plainly to Rhode Islanders how bad the situation is, take radical action, and endure the heat. If the state’s pension system goes bankrupt, the outcome for everyone — especially public employees — will be very painful.