NEW: Cicilline Speaks Out on Providence Budget Crisis
Wednesday, March 09, 2011
“A lot has been said and written about the Providence city budget in the last few days, and I wanted you to hear directly from me about this important issue,” Cicilline writes.
Cicilline outlined nine specific reforms he implemented as Mayor—from cutting nearly 500 positions in city government to negotiating payments from local colleges and universities in lieu of property taxes.
Every statehouse and City Hall in America is struggling with lower revenues in these tough economic times and, in most cases, a desire to maintain quality public services despite the budget crunch. In Washington we are going from one continuing budget resolution to another in an effort to avoid the Republican leadership shutting down government entirely, as happened in the 1990’s.
A lot has been said and written about the Providence city budget in the last few days, and I wanted you to hear directly from me about this important issue. We face great fiscal challenges in cities and towns all across our state, and I want to provide you with the background of these challenges now facing our capital city.
At the beginning of each fiscal year for all the years I served as Mayor of Providence, we began the budget process with a gap between expected revenues and expenses. Put simply, there are never enough resources to do all the things you would like to do.
In each of these years, we closed this gap and balanced our city budget by taking cost cutting actions, eliminating positions, reforming the pension system, earning concessions from city unions, imposing pay freezes and furlough days, advocating at the General Assembly for relief from mandates and sometimes by generating new revenues and using some of our reserves.
We made progress during these years in the following ways:
1. We cut 445 positions from city government.
2. When I took office, no city employee contributed to their health care costs and now all employees pay a co-pay for health insurance.
3. We imposed a 20% co-share for health care for management positions and instituted furlough days for all management positions.
4. When I took office no college or university made direct financial payments to the city, and we negotiated direct payments of nearly $50 million dollars from these schools over the next 20 years.
5. We enacted pension reform that included raising the retirement age, increasing the minimum years of service, and established a firm standard for disability payments and outside earnings. I also proposed significant other pension reform measures, but they were not enacted by the Council at the time.
6. We fought for a school funding formula that will bring more than $25 million additional dollars to Providence once fully implemented.
7. We partnered with the State and were successful in winning Race to the Top that will bring an additional $75 million to our state for education with millions of it going to Providence.
8. We received two national awards for Excellence in Financial Reporting by the Government Finance Officers Association.
9. Throughout all of these years, we maintained A ratings from all three major rating agencies.
During better economic times, we also took the responsible step of building up the city's reserve or "rainy day" fund. When I came into office, this city savings account had very little money in it; but during the first several years of my Administration, we grew it to over $20 million. We made these investments so that in the event of an economic downturn, the city would continue to provide vital public safety and education services, while also limiting property tax increases that would be particularly difficult for residents in a tough economy. These decisions were vigorously debated, widely covered by the media, and were reflected in budgets approved by the city council at the time.
These are difficult times for Providence, the 1st District, which I represent, our State and, indeed, the country. I continue to believe, as I did as Mayor, that we need to invest in economic development and in our schools in order to move our communities out of recession and bring back more prosperous times, and we need to continue to keep promises made to our seniors because they have earned them. Some may disagree with those priorities, but they are what I fought for as Mayor and will continue to fight for in Congress.
Each year presents its own set of challenges and I am very confident that the current city administration will make decisions it believes are right, and that the diverse economy of Providence and our area will grow and strengthen in the years to come.
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