Tom Sgouros: David Cicilline was Good for Providence
Monday, January 30, 2012
A few weeks ago, I wrote an aside about David Cicilline being unfairly judged by the cartoon version of his record as Mayor of Providence. Since then, I've been asked a few times to elaborate. So here we go.
First, a disclaimer: I offered advice and wrote policy memos on behalf of David Cicilline during his run for Congress in 2010, and was paid for that assistance, a few days a month for five months. I did not work for him after the election, and have no plan to work for him again. If that's reason enough to ignore what follows, please save yourself the agony of reading it. None of my advice or memos had anything at all to do with the City of Providence.
Second, a stipulation: I will not and cannot defend all the decisions David Cicilline made in the Mayor's office. Over his eight years in office, I was quite critical of several decisions he made about housing, land development, and taxes, among other things.
All that said, David Cicilline has been more unfairly tarred than virtually any other politician I can think of, with the possible exception of Al Gore (who never said he discovered Love Canal or invented the Internet or any of the other groaners attributed to him, but that's a different story).
What actually happened?
Let's review some facts. Mayor Angel Taveras arrived in office to find the city facing a $110 million deficit in the upcoming fiscal year 2012, plus a $29 million shortfall in the halfway over fiscal year 2011. Add to that $41 million borrowed in 2011, and people called it a $180 million deficit over the two years.
The total city budget in 2011 was originally projected to be $638 million, so over the two years, we're talking about a 14% cut, more or less. This is a huge amount to cut from a budget in a short time, and well explains Taveras' famous description of a "category 5" fiscal storm.
But look at this: Taking the original 2008 state budget as a baseline, cuts in appropriated state aid to Providence from 2008-2011 amounted to roughly $171 million. If state aid had only remained constant at 2008 levels, there might have been no crisis in 2010. State aid didn't have to grow, just to stay the same.
But that's not what happened. Between 2008 and 2011, the state not only cut annual aid to Providence by around $60 million -- a 10% annual budget cut -- but in fiscal years 2008, 2009, and 2010, made its cut after the city budget had been settled. During fiscal year 2010, most of the cuts came without warning in the last quarter, leaving no time for the city to find expenses to cut. How much of this was Mayor Cicilline's fault?
In case you're wondering, none of this information appears in last February's "Report of the Municipal Finances Review Panel" commissioned by the new Mayor Taveras, except in an aside on page 18 which points out Mayor Cicilline did not raise taxes enough to cover lost state aid. To the authors of that report, the crisis was apparently all attributable to management.
What kind of reserves?
I've also reviewed the controversy about whether the city had spent down its "reserves" by October 2010, when the Mayor said there was $30 million in reserve and the City Council was saying the real number was $4.6 million and the city was about to run out of cash. Lots of the stories that talk about Cicilline lying about the budget stem from this episode.
I'm not going to weigh in on this because when I read the stories I think the two sides were talking about different things. So I'll leave it alone, and only observe that "reserves" is not a synonym for "rainy day fund" and whether a city is about to suffer a cash flow crisis likely has nothing at all to do with the rainy day fund, which is a budget reserve, not a cash reserve. Cash reserves may not be in the rainy day fund and the rainy day fund need not be in cash. (And the cash may not even be cash, for that matter, but leave that for another story, too.) It's complicated, yes, but the blame belongs to accountants, not mayors.
So was Cicilline irresponsible to spend that money in 2009 and 2010? I suppose you could argue that. But the point of a rainy day fund is to save it until it rains, not to save it until the storm passes. Do you keep your umbrella folded to protect it from the rain?
The politics of blame
Now let's review some other facts. Here's one: Despite the way the state shafted the city, the only way -- and I mean the only way -- Mayor Taveras was going to be able to balance the 2012 budget was with help from the state. Even if it was correct, placing the blame on the Speaker of the House would not have been a good way to get more aid, would it? The Speaker, in turn, has no incentive not to agree, does he?
Another fact: The City Council is also responsible for city finances, but I don't see any of them standing up and accepting responsibility for the crisis. In 2010, the city council delayed approval of the election-year budget until months after the fiscal year had begun, rendering some of the savings in it impossible to achieve. They even enacted a tax cut almost 3/4 of the way through the year -- this past February, at the same time Mayor Taveras was talking up the storm.
What's more, the Council hired Gary Sasse, former Governor Carcieri's Director of Administration, for his sage fiscal advice. Sasse, of course, was part of the state administration that pulled the rug out from under Providence's finances in 2010. So of course he's not going to tell the Council it was the state's fault. Instead, he wrote a report blaming almost all of the problem on Providence management. What did they think he would tell them?
But despite all that, would it have been wise for Mayor Taveras to blame the City Council? After all, he has to work with them for the rest of his term. So he didn't, because he appears not to be an idiot. Taveras instead spoke about his storm and the "mismanagement of the past," and everyone knows who he's talking about. Call it a nod of the head instead of a pointed finger.
To sum up: after David Cicilline's departure from City Hall, the new Mayor, the City Council, and the Assembly all found political advantage in blaming him for all of Providence's woes. What's more, Cicilline didn't just go into retirement; he ran for Congress. So his opponents in that race found it equally convenient to echo the criticisms, and presto, everyone "knows" how bad a Mayor Cicilline was. You don't have to think him blameless to think that he is getting far more of his fair share of blame.
All through this saga, there has been lots of moralizing about "sound fiscal practices" and the like. But, race for Congress or no, anyone who wants to claim David Cicilline didn't have a mandate to hold taxes down by any means he could imagine has been living on a different planet than me over the past few years. Unfortunately, like all of our mayors, Cicilline has been bucking the tide. Your state is at war with its cities, denying them aid while piling on requirements, talking about fiscal responsibility while showing little of their own. It's a sad story, but it's a story far bigger than that of one city and one mayor.
Providence has pulled through its storm
It's a weak endorsement of someone to say he's not as bad as everyone thinks, so I'd also like to add a bit more. In 2003, the new Mayor Cicilline had a $60 million deficit to deal with in his first budget. From then on, rising health care costs, the costs of pension deals made by previous mayors, state mandates, and (later) cuts in state aid conspired to make sure that in many years there was a yawning deficit going into budget season. In spite of that, the city did manage to get back to making its full annual pension contribution, and it did build up its rainy day fund. Is that a record to dismiss?
Central Falls is in bankruptcy, East Providence is skating on the edge, Woonsocket is now a junk bond borrower. Unlike those cities, Providence has pulled through its storm. The credulous can credit the superhuman brilliance of its new mayor. Angel Taveras is a good guy and, as I said, not an idiot, but the rest of us suspect the situation in Providence wasn't quite as dire as painted and suspect Mayor Taveras will soon be resorting to the same budget devices his predecessor used. Why? Because it's the condition of the sea that's providing the bumpy ride, not the actions of the captain.
Tom Sgouros is the editor of the Rhode Island Policy Reporter, at whatcheer.net and the author of "Ten Things You Don't Know About Rhode Island." Contact him at [email protected].
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