Providence Mayor Angel Taveras announced last week that the city may be forced to file for bankruptcy unless the budget deficit — $22.5 million for this year and $30 million for the 2012-2013 fiscal year — is closed by June. He called for large nonprofits like the University to increase their voluntary contributions to the city and for retirees to renegotiate their benefits packages.
That afternoon, Gov. Lincoln Chafee '75 P'14 arranged a meeting between Taveras, President Ruth Simmons and Chancellor Thomas Tisch '76. The city's negotiations with the University regarding its payments to the city allegedly stalled at the end of last year when Taveras requested that the University increase its annual payments to the city by $4 million per year and rejected the University's counter-offer of $2 million per year.
A day after the press conference detailing the city's budget crisis, Taveras enlisted the aid of Robert Flanders Jr. '71, who served as state receiver for Central Falls last year when the city was facing bankruptcy, according to an article in the Providence Journal. Taveras hired the law firm of Hinckley, Allen & Snyder to advise the city after meeting with Flanders Friday.
Taveras met with Chafee Monday to brief him on the city's budget crisis. He said concessions from tax-exempt institutions and retirees would provide $15.1 million, but this would still leave a significant hole in the budget, the Journal reported.
After hearing arguments from both sides yesterday, the state Supreme Court is slated to release a ruling today that would decide whether the city can force hundreds of retirees to move from the city's Blue Cross health insurance plan to Medicare, according to the Journal. Taveras has said the change could save the city $8 million.
Taveras is slated to meet with retirees in March to discuss freezing cost-of-living pension adjustments for the next 10 years. He called recent 5 and 6 percent payment increases "unsustainable," according to the New York Times.