Chafee Talks Reforms With Leaders From Struggling Cities and Towns
Tuesday, April 03, 2012
Municipal leaders say they plan to lobby their local General Assembly delegations to support Governor Chafee’s sweeping municipal relief package that would allow nearly insolvent communities to freeze cost-of-living-adjustments (COLAs) for retirees and take other steps to control costs and prevent more property tax hikes.
Following a closed-door strategy session with the Governor Monday, local leaders offered a message of solidarity in their quest to prevent any more cities and towns from going bankrupt.
“It does no good for any community [to go bankrupt] and that’s why we’re all sticking together,” said Johnston Mayor Joseph Polisena, whose town would not currently qualify for the relief measures proposed by Chafee.
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The package, which includes seven pieces of legislation, would only apply to four highly distressed communities: Pawtucket, Providence, West Warwick and Woonsocket.
Aside from allowing cities and towns to freeze COLAs, the package would also:
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Offer mandate relief and binding arbitration reform for four highly distressed communities;
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Give cities and towns more control over school budgets;
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Require communities with overly generous pension benefits to bring pensions in line with the state system;
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Reduce disability pension benefits for employees that can perform other jobs;
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Advance municipal aid to avoid cash flow problems;
- Provide certain exemptions for school maintenance of effort requirements.
The four cities and towns are already struggling to remain afloat thanks to massive deficits and unfunded pension obligations. In Pawtucket, Mayor Don Grebien was forced to ask the state for a cash advance on tax payments to make payroll. West Warwick Council President Angelo Padula has already suggested the town could be the next Central Falls, which in filed for bankruptcy last August.
In Providence, Mayor Angel Taveras is still trying to close a $20 million budget deficit in the current fiscal year. He is asking several groups of retirees to agree to concessions and is still trying to convince nonprofit institutions to make $7.1 million in payments in lieu of taxes to the city.
In Woonsocket, the City Council last night voted to 6-1 to move forward with a 13.8 percent supplemental tax hike that is expected to help the city make up for a $10 million shortfall in the school department’s budget.
Lawmakers “Have to Do This”
Still, even while Chafee and municipal say they are working to convince the General Assembly to support the relief package, lawmakers have only offered lukewarm support for the plan so far. House Speaker Gordon Fox and Senate President M. Teresa Paiva Weed have yet to fully endorse Chafee’s set of bills.
Chafee says struggling municipalities have been left with few options thanks to years of cuts in state aid. According to a report released Monday by the Rhode Island Public Expenditure Council, between fiscal years 2008 and 2012, state aid to cities and town was slashed by 72.6 percent and just as residential property values have seen steep declines in the recent recession, local tax bases have eroded.
“The reform and relief package I have submitted to the legislature will empower communities to use the tools they need to achieve fiscal stability, and I am pleased to have the support of the overwhelming majority of municipal executives across the state,” Chafee said. “Each city or town in Rhode Island is different, with unique needs and challenges. My legislation places the power to take steps to address these challenges where it belongs – at the local level. I look forward to continuing to work with municipal leaders to avoid more bankruptcies, keep property taxes down, and restore fiscal health for our cities and towns.”
Asked why lawmakers from cities and towns that aren’t considered highly distressed should vote in favor of the relief package, the local leaders suggested they don’t have much of a choice.
“We’re going to tell them they have to do this for their constituents,” Polisena said.
And for those who don’t support the package?
“Anyone who doesn’t vote for it doesn’t really understand how local government works,” Cumberland Mayor Dan McKee said.
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