At the annual city budget address last night, Mayor Angel Taveras presented the Providence City Council with a $638.4 million budget proposal that prioritizes education, economic development and public safety. Taveras reiterated his calls for municipal pension reform and increased contributions from the city’s nonprofits. Though a deal between Providence and the University has yet to be reached, parts of the budget rely on the outcome of the negotiations.
Taveras pointed to projections in his proposed budget – including reductions in the costs of retiree health care for the city – that depend on $7.1 million in payments from local nonprofits and city pension system reform. Taveras urged the council to pass his Providence Pension Protection Plan, which he said would save the city $19 million after suspending promised annual cost-of-living increases.
Though the proposed budget represents a nearly $5 million increase from last year’s plan, Taveras said that the operating budget will actually decrease because $7.7 million will be incorporated into the city’s reserve fund.
Taveras said pension reform is integral to the city’s economic revival, though dialogue with retirees is difficult because municipal workers are no longer represented by a union once they leave their jobs. Conversations with the University and the large tax-exempt organizations in the city will continue this week, as Taveras seeks to increase voluntary contributions from the institutions.
During his address, Taveras said he is hopeful the city “will reach a deal with most, if not all, of our tax-exempts before the end of this fiscal year.” And while the Taveras administration will not release any details of the meetings between the administration and University negotiators, he is optimistic “the city and Brown University will reach an agreement that will help both parties,” David Ortiz, the mayor’s press secretary, told The Herald.
But Taveras warned that if agreements are not reached with the tax-exempts, the city is prepared to work with the General Assembly to create laws that would allow the city to mandate payments. The suggestion drew cheers from the audience, with one resident commenting, “It’s about time.”
Taveras praised the city for its achievements over the past few months – such as the $90 million decrease in the structural deficit – and focused on the uphill battle that remains. The mayor has previously said that if the city is unable to close the remaining $20 million deficit, Providence may face bankruptcy in June.
Taveras said solutions to both the tax-exempts and pension problems need to be reached before the city can “win the promise of a brighter future.”
Despite the net decrease in the operating budget, the city will be investing more heavily in education – an additional $19.7 million dollars – due to increased aid promised by Gov. Lincoln Chafee ’75 P’14 and incorporated into the state’s budget for the coming year, he added.
“Education is the most important economic development investment we can make,” Taveras said. But increased education funds must be coupled with higher expectations of students, parents, educators and administrators, he added.
Taveras, who campaigned heavily on his promise to improve the public school system, said he would soon be announcing a plan to “ensure all Providence students are reading on grade level by third-grade.”
The mayor also emphasized the importance of reinvigorating the city economy – Providence’s unemployment rate stands just above the state average of 11 percent, the second highest rate in the nation. He hopes that by stabilizing the city’s economy and creating a welcoming tax climate, companies will be interested in expanding to Providence.
The economic improvement is not possible without a heightened emphasis on public safety, Taveras said.
Due to an expansion of the tax base, Providence will be gaining additional revenue this coming fiscal year, but Taveras reiterated the importance of resisting further burdening the city’s residents with tax increases to close the deficit.