Rhode Island's landmark pension reforms were painful for many — the retirement age for state workers had to be raised, and they were forced to contribute more toward their retirement, for example. But the changes were wholly necessary. For a picture of the path not taken, look no further than Connecticut.

Despite being one of the wealthiest states in the nation — by some measures, the wealthiest — the Nutmeg State faces severe financial difficulties. Connecticut just managed to close a $220 million deficit this year, in part by laying off a significant number of state workers. But this was only a temporary salve: According to the state's comptroller, Connecticut next year faces a $900 million deficit. He predicts large annual shortfalls through at least 2030.

Unsustainable pension costs are a primary culprit for the state's woes. More than a third of the state's budget goes toward paying public employees, and "about 80 percent of (that) money has nothing to do with the existing employees,” the comptroller says. “That’s just to compensate for the employee benefits of state employees [hired before 1984] that got the most lucrative [retirement] benefits.”

And those benefits are lucrative indeed: As the Hartford Courant noted earlier this year, retired government workers in Connecticut have the highest average annual benefit – around $40,000 – in the country. And for that, they contribute the least in New England: between 0 and 2 percent of salary annually. Making matters worse, the state skimped on its own contributions for years. As a result, Connecticut now has the second-largest unfunded pension liability in the country, behind only perennial basket case Illinois. As of late fall, its unfunded liabilities topped $26 billion.

Barring serious pension reform, Rhode Island-style, Connecticut faces a grim future. The state could end up raising taxes — already among the nation's highest — to cover the pension costs, thereby harming economic activity and encouraging businesses and families to settle elsewhere. The departure of industrial giant General Electric for Boston does not portend well. Or, the state could end up eating its seed-corn, starving important functions such as schools and roads to pay state workers who in many cases retired decades ago. Neither is a happy path forward.

Rhode Island is fortunate indeed to have averted a Connecticut-like fiscal disaster.