Metro

City faces deadline to solve budget woes

By
Metro Editor
Tuesday, April 14, 2009

With less than three months remaining in the city’s fiscal year, Providence must rush to close a $16.1 million deficit resulting from slashed state aid and unmet revenue goals.

Ward 7 Councilman John Igliozzi, chairman of the City Council Finance Committee, said he hopes to see a supplemental budget proposal from the office of Mayor David Cicilline ’83 by the council meeting this Thursday.

But Igliozzi said city officials seemed “noncommittal” about their timeline for presenting budget revisions when he last spoke with them.

The City Charter requires that the budget be balanced at the end of each fiscal year, which runs from July 1 to June 30.

Because of the procedural steps required — including the certification of the deficit and presentation of a supplemental budget by the mayor’s office, as well as multiple votes and public hearings in the council — the budget revision process will likely take a month to complete, Igliozzi said.

With only 11 weeks to make up the deficit in Providence’s $641-million operating budget for the current year, the city will need to work quickly. About 55 percent of the total budget is allocated for education with the remainder going for city services, including recreational activities, police and fire departments, parks and snow removal, Igliozzi said.

The deficit will not affect the allocation of money to schools, so the city must find a way to make it up through savings elsewhere, Igliozzi said. Due to Rhode Island’s crippling foreclosure and unemployment problems, raising taxes is also not a possibility at this time, he said.

Of the total deficit of $16.1 million, about $7 million comes from unmet city goals for revenue from taxes, property sales and consolidation of city departments, Igliozzi said. The other $9 million was cut from state funds allocated to make up for lost revenues from tax-exempt properties, such as hospitals and institutions of higher education, which make up about 52 percent of land in Providence, he said.

“Some of it was self-inflicted and some of it is something that wasn’t in our control,” Igliozzi said.

Though Providence officials have known for months that the state may cut the city’s funding, the exact amount was not known until early April, when the General Assembly voted to restore about half of the state’s revenue-sharing money for cities and towns.

There has been discussion of selling city properties, consolidating city departments and seeking concessions from unions, Igliozzi said, adding that retroactive pay raises given to nonunion employees may also be cut.

Cicilline’s director of administration, Richard Kerbel, told the Providence Journal last week that closing the deficit will be a “significant challenge.” The mayor’s office is primarily focusing on concessions from unions and nonunion personnel to achieve a balanced budget, he told the Journal.

The mayor’s office could not be reached for comment Monday.

Kerbel is largely responsible for drafting the supplemental budget proposal, Igliozzi said.

Providence is already struggling to fill the projected deficits in the budget for the next fiscal year, and the problem will only be compounded by any lingering deficits, Igliozzi said.

“They are going to have to become more frugal and put together a serious financial plan on how to run the city without the additional $16 million for the next quarter,” Igliozzi said. “The longer they wait, the worse it will be.”