City Budget: Tax Bills Could Go Out This Week
Tuesday, July 19, 2011
The race to mail tax bills to city residents and avoid potential cash flow problems next month is on now that Mayor Angel Taveras has signed the $613.8 million budget in to law.
Taveras made the budget official Monday evening only minutes after the City Council unanimously voted to approve the spending plan for a second time in less than a week. The budget includes a residential property tax hike of 4.99 percent as well as a nine percent increase in commercial property taxes. The city also reduced the automobile tax by more than 20 percent while expanding to exempt only the first $1,000 of the car’s value.
The Mayor said tax bills could be sent to city residents as early as the end of this week.
“Signing the budget today was vital to get it done," Taveras said."[Tax bills] will be going out shortly. We're in the process of printing them as we speak. I expect that this week or early next week they will be out.”
City Could Still Face Cash Flow Problems
The need to bring in new revenue is urgent, according city officials. In May, Internal Auditor Mathew Clarkin issued a memo to the City Council warning that the city could run out of money by the end of August. In a statement made last week, the Mayor confirmed Providence could still face cash flow problems this summer.
Still, he said a potential short-term loan –which would likely come at a higher interest rate due to the city's diminished bond rating – to cover immediate expenses was not an option. He said he was proud that the budget does not include any additional borrowing or one-time fixes for the city.
He called the signing the budget an important milestone for a city that was on the brink of financial collapse, but cautioned that more work needs to be done.
“Providence’s fiscal storm is not over yet, but passage of a balanced budget is an important turning point for our city and I truly believe that brighter days are ahead,” he said.
Taveras Praises Budget
The new budget for the 2012 fiscal year which began July 1 eliminates the $110 million structural deficit through a series of deep cuts, furlough days, union concessions and a tax increase. Taveras singled out both of the city's public safety unions as well as the members of Local 1033 as being examples of groups willing to share in the sacrifice. He noted that the city is still waiting to come to terms with the teachers union as well as the colleges and hospitals, which he hopes will be willing to pay approximately $7 million to Providence in lieu of tax agreements.
“I think I'm proudest of the fact that police, fire and 1033 all came to the table under difficult circumstances and made real sacrifices to help our city," Taveras said.
Solomon: Budget A Product Of Due Diligence
Taveras also recognized the General Assembly for its unprecedented support for the city during a fiscal crisis. At least one member of the Providence delegation, State Senator Juan Pichardo, was present for the Mayor’s signing of the budget.
On Monday, Council President Michael Solomon praised the budget, saying it was possible because of the collaboration between the executive and legislative branches.
“This budget makes significant progress on repairing Providence’s finances,” Solomon said. “Since news of the City’s $110 million structural deficit broke in February, the Council has worked with the Administration to close the shortfall. This budget is the product of due diligence, tough decisions and an unprecedented level of collaboration between the City Council and the Administration.”
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