General Assembly ‘Failure’ Could Bankrupt Cities and Towns
Thursday, June 07, 2012
The decision to leave the key components of Governor Chafee’s municipal relief package out of the proposed $8.1 billion House budget will drive more cities and toward bankruptcy, according to several local leaders.
In the end, municipal officials say the much-hyped package that received support from 35 communities across the state was watered down to include just enough for legislators to say they support cities and towns, but nothing that might lead to voter resentment in an election year.
“If this isn’t forcing a community to go bankrupt, nothing is,” said Angelo Padula, President of the West Warwick Town Council. “What these legislators have chosen to do is that within the next year, you’re not going to just see four communities near bankruptcy, you’re going to see eight or nine.”GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST
Padula, whose town has taken to cutting sports and after school programs to solve its budget woes, said that while he blames the School Committee for making poor financial decisions, he is disappointed in the legislature for not doing enough to support cash-strapped municipalities.
“It takes good politicians to make good decisions and we don’t have too many good politicians,” he said. “It goes to show you, some of them don’t belong up there [on Smith Hill]. They’re for the special interests.”
Only the Easy Pieces Passed
But some members of the General Assembly say the decision to leave the ability to freeze cost-of-living-adjustments, cap pension benefits, reform disability pensions and be freed from certain mandates had little to do with politics. They point to the capital city where Mayor Angel Taveras was able to reach tentative agreements with current union members and retirees on similar issues as an example of what municipalities can do without the legislature.
The proposed budget does include legislation that would hold schools more accountable when it comes to spending and modifies the way state aid is distributed. The budget also accelerates the school funding formula, which could provide some relief for cash-strapped communities.
Chafee, a former Mayor himself, said that while he was pleased that some parts of his package were included, more needs to be done. The Governor has consistently pointed to about $240 million in cuts to state aid since 2009 as an example of the punishment communities have been dealt from state government.
“I am pleased that the Finance Committee supported the acceleration of the school funding formula, which helps cities and towns,” Chafee said.”I am also encouraged that the Finance Committee included some portions of my legislative package in the budget. However, the fact that they selected the easiest pieces suggests that they will not address the most badly needed measures. Our highly distressed communities need more. The process is not done yet, and I continue to urge the General Assembly to pass my entire legislative package to help protect Rhode Island property taxpayers and avoid bankruptcy in our most distressed cities and towns.”
Local Leaders Concerned
But certain Mayors say the failure to offer more help to cities and towns will cost the state in the long run. According to Cumberland Mayor Dan McKee, simply accelerating a school funding formula that is hardly fair and equitable is not helping to address the real problems communities are facing.
“It is disappointing that the General Assembly elected not to pass the Governor’s municipal package or some version of the same type of legislation that was passed last year,” McKee said. “I believe that it will be important that mayors and municipal leaders continue to try to garner the support of the General Assembly in the next session to pass legislation that will provide property tax relief to the local taxpayers that we represent.”
For those Mayors who did spend a lot of time at the State House lobbying for more help, the failure to act on the majority of the Governor’s relief package comes as a serious blow. In Pawtucket, which Chafee has singled out as a community desperate for support, Mayor Don Grebien is in contract negotiations with all of his unions this year and likely could have used legislation to his advantage.
Calling taxpayers the biggest losers of all, Grebien said he is “extremely disappointed” in the General Assembly. He said Chafee’s set of bills represented more than $5 million in savings for his city
“As we continue to struggle with an ongoing $12 million structural deficit, the lack of support for key proposed initiatives such as suspension of COLAs and mirroring the state pension fund’s MERS requirements can only make that financial struggle more difficult,” Grebien said. “Not only is the viability of our local unions’ pension plans at stake, but also Pawtucket’s ability to avoid bankruptcy and maintain control of our future.”
No Guts
Johnston Mayor Joseph Polisena, another local leader who played a vital role in promoting Chafee’s legislative package, said he still has hope the House and the Senate leadership will considering moving forward on local pension reform, which he called “crucial” for cities and towns.
“Some of his tools could be the life and death for those communities who are on the verge on bankruptcy,” Polisena said. “There is still time for the general assembly to pass some of the pension reform legislation that the Governor has proposed. I would be very disappointed if another community followed in the footsteps of Central Falls. The pension reform proposed by the Governor is crucial to the survival of several cities.”
But Padula was blunt with his assessment of the General Assembly.
Asked whether he was surprised the majority of Chafee’s package was killed, he said, “I would have bet that they didn’t have the guts.”
Dan McGowan can be reached at [email protected]
