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Municipal Authority Isn’t Glamorous, But It’s Key to RI’s Recovery

Thursday, March 28, 2013


Last November, you may have gone to your polling place and elected local officials, like mayors, city council members and school committee members, to manage the city’s finances, public safety, school system and various other local government services.

But do you know how much of your local government is actually dictated by state law? Did you know that every year in the General Assembly, legislation is introduced that erodes the fiscal authority of your municipality?

State Law Sets the Stage

In most cities and towns, the school budget represents between 60%-80% of the overall finances. Would it surprise you to know that there is a state law that provides for a 10 -12 step Minimum Salary Schedule for your city’s teachers? Or how about a state law that mandates the exact date when your city must provide notification of layoff to teachers? Or the state law mandating that your school system have bus monitors, whether the residents think they are needed or not.

RI passed a law that allows a city’s school district to actually sue your city (that’s you) for additional funding if the school department believes its budget request is warranted; it’s called the Caruolo Act. It removes fiscal authority from the elected officials responsible for managing the city and levying the taxes to pay for those services.
If you read that law you’ll see that it authorizes a lawsuit if the school district’s budget isn’t sufficient to fund “mandated” programs. Problem is that student programs do get cut under Caruolo while costs continue to spike. Cities like West Warwick, Cranston and the town of Portsmouth have all prepared Caruolo proposals. In 2008, the Cranston school department filed a Caruolo Action demanding close to $4.5 million. In 2008, West Warwick was required to pay an additional $1.2 million from a Caruolo Action. In 2010, the Portsmouth School Committee was ready to pursue a Caruolo Action until a petition by a group of citizens to create a special election to vote for additional funding was brought forward.

Pay for expenses that don’t exist 

Maintenance of Effort is another state mandate that requires cities to provide at least the same level of funding for school departments as the previous year. This results in little flexibility for local officials to make decisions when taxpayers simply can no longer afford it. Believe it or not, expenditures that no longer exist continued to be included in that base level of maintenance of effort, even if the school department no longer paid for them! That is, until last year when the General Assembly finally agreed to set the municipalities free. It allowed that non recurring debt service be excluded in the level funding formula. But it took so long for this common sense public policy to be approved. The state binds the hands of local government.

The assault continues

The assault continues on our municipalities’ fiscal authority with proposed legislation like binding arbitration, which allows a third party to determine what the city will pay when an agreement can’t be reached in a school department s’ collective bargaining negotiation. Or perpetual (evergreen) contracts that allow the current bargaining agreement to remain in place indefinitely so that in economic times like these, when the city would be looking for givebacks, no need for the other side to negotiate when the current contract looks rosy.

How about a bill that would cap the legal fees a city could incur in any given collective bargaining dispute? Given that the Caruolo Act is alive and well, this bill would just tighten the noose. Imagine the bind a city would be in if it knew that once they reached the cap for legal fees, there would be no ability to pursue the legal route of contract negotiations. How do you think the negotiating would end under that scenario? Presumably, with increased taxes.

Hold local official accountable 

The General Assembly must keep in mind that municipalities have local officials that were elected by the local residents to manage their city or town. These residents do not expect that state legislators will impose their will and handcuff their local officials when trying to manage their city. If anything, the General Assembly should consider passing legislation that removes the ties that bind, whether it is the type of legislation the Governor set forth in the “Year of the Cities and Towns” or it is legislation that requires cities and towns to participate in any contracts that are negotiated by school committees.

Lisa Blais is a Board Member with the OSTPA organization. She can be reached at [email protected] or [email protected].


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