New Providence Budget: A Cheat Sheet
Tuesday, February 01, 2011
The $638 million budget is a slightly scaled down version of an 11th-hour proposal Mayor David Cicilline submitted in December, just weeks before leaving office. The new proposal was hashed out between the council and Mayor Angel Taveras.
Last night, the council Finance Committee heard the 2011 budget for the first time and—despite the misgivings of some council members who said they hadn’t had time to study it in detail—recommended it to the full council.
The budget cuts what Cicilline had proposed, but still increases spending by approximately $20 million over 2010. It also includes $3.6 million in spending that is expected to be paid for through savings elsewhere in the budget—although city officials declined last night to disclose any details about where they might find those savings.
Increases spending by 3.3 percent The $638.4 million budget proposal represents a 3.3 percent increase over the $617.9 million budget for the fiscal year that ended in June 2010. Council President Michael Solomon said much of the increase is due to contracts and collective bargaining agreements that could not be altered. Rising health costs and pension obligations also contributed to the increase, according to Director of Administration Michael D’Amico. “Those are things that we don’t have control over looking back retrospectively, now that we’re six months into the year,” said Taveras spokeswoman Melissa Withers.
Cuts Cicilline proposal by $5.3 million The proposed budget is $5.3 million less than what Cicilline had suggested. The budget was trimmed down by eliminating roughly eight positions he had proposed and reducing the spending on medical insurance for retirees by $2.2 million.
$35 million from Providence Public Building Authority The budget includes $35 million in bonds and notes issued by the Providence Public Building Authority to finance repairs, replacements, and upgrades to city and school buildings.
$36.1 million reduction in state aid The budget also absorbs a hit of $36.1 million in lost state aid.
$10.2 million to help property owners The spending plan sets aside $10.2 million to pay for a 15 percent tax abatement to non-owner occupied property owners in the city.
At this late stage, is a new budget even necessary? Kerbel said he’d never seen a budget passed so late in the year in his career in government. “I think this is a highly unusual situation,” he told council members. But said passing a budget would help the city’s standing with bond holders and give relief to property owners. It also would eliminate a cloud of uncertainty that has been hanging over the city’s financial staff. However, technically, the city has been operating on a default budget this year, according to Finance Committee Chairman John Igliozzi. The council did pass a tax levy last summer, which he said is more important to bond rating agencies than having an approved spending plan in place for the year.
… But long term problems still loom “This proposed budget doesn’t solve any particular financial problems the city has and the city has serious financial problems facing it,” Igliozzi said. “The city’s revenues—they’re not equal to the payouts. ... It’s getting wider, greater, and unsustainable.” He also noted that not all of the city’s problems were related to the world’s financial collapse, saying that some of its issues are “self-inflicted.”
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