Moore: Elorza Should Prioritize Students, Not Trolleys

Monday, May 18, 2015

 

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The fact that students in the Providence School system are forced to walk 2 miles to school and back every day because the city can't afford to transport them is probably a good indication that the city can't afford to go spending money on some shiny new trolleys.

But that point is apparently lost on Mayor Jorge Elorza just like it never dawned on his good friend and predecessor Angel Taveras.

Most people learn the difference between a need (food, shelter, clothing, see: Maslow's Hierarchy), and a want (Ferraris, Armani apparel, summer homes) pretty early on in our lives. The lesson is either taught by our elders, or if we're less fortunate, (or more headstrong), our experiences. The inability to distinguish between wants and needs can quickly put individuals and entities alike in the fast lane to bankruptcy. If the city decides to spend money on a project that's little more than a cool idea that the city can't afford, it might accelerate its march towards insolvency.

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A Cool, But Unaffordable Proposal

The proposal would build streetcar trolleys that would cost a whopping $117 million and create a 2.1 mile line from Brown University to Rhode Island Hospital. To pay for this, city officials are proposing a Tax Incremental Financing Program, commonly referred to as a TIF, which would use the revenue derived from the project to pay for the bond proceeds since the city would have to borrow to pay for the upfront costs. This would be achieved by creating a TIF district to pay for borrowing.

Taxing only a certain portion of the city, to pay for the project, seems like a surefire way for the city to be dragged into court. And what happens if the project doesn't create the tax revenue it was hoping for? Obviously, the project would have to be bailed out by the rest of the city.

There's no denying that the streetcar would be a cool thing to have, and a nice addition to the city's infrastructure. I don't doubt that they'd make the city look quaint, add a certain charm, and offer an affordable and pleasant mode of travel for some folks who live in that small area. 

And it would be perfectly logical to support this sort of a project if the city was in a relatively strong financial position.

More Important Priorities

But to hear certain proponents like Mayor Jorge Elorza talk about their support for the project, one would think that the city didn't have school buildings in need of repair, or roads that look they're more suitable for a Third World Country than a modern day American metropolis, or perhaps what's most frightening, a woefully underfunded pension system--which threatens to torpedo the city's finances to the point where, God forbid, it starts bouncing pension checks.

For the fiscal year 2014, which ended on June 30th of last year, the City of Providence's assets were exceeded by its liabilities by roughly $143 million--meaning the city's total nets assets are in the red, thanks to eye popping liabilities like the OPEB (health care benefits for retirees) benefits which pose $1 billion liability.

Further, as Golocalprov Mindsetter and finance professional Michael Riley has pointed out, the city has been borrowing from its own, already woefully short, pension fund since around 2007, at a rate of 8.25 percent. The fact that the city has been borrowing from its own pension fund, at an exorbitant rate illustrates the city's dire financial situation.

While the project would be a nice, shiny, new toy for the city, the current financial picture and shape of our more important infrastructure simply doesn't justify the expenditure. It's time for Mayor Elorza to get his priorities in order.

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Russell Moore has worked on both sides of the desk in Rhode Island media, both for newspapers and on political campaigns. Send him email at [email protected]. Follow him on twitter @russmore713

 

Related Slideshow: 10 Questions Elorza Has to Answer as Mayor


 

 

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Department staffing?

Economic Development. Chief of Staff. Policy Director. Who will Elorza place in these key posts? Will former opponent Brett Smiley play a role? Will Elorza keep on any key Taveras staffers?

There are multiple questions in this category, and Elorza should be making moves shortly as to what his administration will look like.  Will former opponent Michael Solomon be part of the team?  Look to see. 

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Budget deficit?

Opponent Buddy Cianci famously said during the campaign that if there was a budget surplus in the City of Providence, he'd drop out of the race.

Councilman Terry Hassett told GoLocal that a close watch on the budget would be necessary in the coming year, as a "deficit exists." So how will Elorza tackle the fiscal challenge?  He's talked about looking at city government department by department.  Where will he make cuts if necessary?  Or will Providence see taxes being raised?

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Police force?

The Providence Police Department recently graduated a new class of officers from its academy -- but council members to community leaders are pointing out the numbers are still below even minimum staffing levels.

Will Elorza look to push through a new academy when he takes office?And how will he handle issues surrounding the department -- which following the most recent graduation, was at the center of intense public scrutiny?

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Car Tax Changes?

Elorza said during the campaign that he wants to raise the car tax exemption from where it stands at $1,000 back to where it once was at $6,000.  

So how's he going to make this happen?  He teamed with Raimondo at the Olneyville press conference to pledge that if elected they would work in tandem make it possible.  Will Providence see more aid from the state to fill the tax revenue hole?  
 

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Tax Breaks?

Tax stabilization agreements (TSAs) between developers and the City of Providence came under close scrutiny in 2014, as a report from City Auditor Matt Clarkin showed that the city wasn't collecting nearly what it was owed on the properties that cut special tax deals with the city in the name of development and job creation.  

One council member -- Sabina Matos -- proposed putting a freeze on new TSAs until a full review was done, and a standardized process was put in place.  Will Elorza continue to use TSAs as a tool in the economic toolbox? 
 

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195 development?

The 195 land, while in the hands of the State -- and 195 Commission, rests squarely in Providence, and as such, its redevelopment will have a profound impact on the economic future of the city.  

How active will Elorza be in the process of courting businesses to put their stake in the ground and be part of the urban renewal process in Providence? Lots of work is already underway with the roads and infrastructure -- how soon will shovels be the ground for tenants?

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Nonprofit relations?

As part of his administration, Mayor Angel Taveras ushered through historic PILOT (payment-lieu-of-taxes) agreements with the city's nonprofits, in order to obtain some fiscal relief from the tax-exempt institutions at t time when the city desperately needed it.  

Will Mayor Elorza look to go back to the colleges, universities, and hospitals should the city find itself in difficult circumstances once again? 

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Jobs?

Elorza's jobs plan as proposed during the campaign included such components a supporting entrepreneurs, women, and minority-owned businesses, and promoting a mentoring program with the city's colleges and universities.  

One of Elorza's proposals included the doubling of Providence's exports over the next five years.  How is Elorza going to make this happen?  He mentioned used cars and design exports during debates on the campaign trail.  What policy moves will Elorza unveil to make this prophecy a reality?  And where will Providence see the jobs?

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School success?

Central to Elorza's education plan is the concept of community schools, so that the buildings are utilized long after the school day for increased learning and recreation opportunities for the surrounding neighborhoods.

Elorza has called for less emphasis on standardized learning, and has proposed an investment in technology in the classrooms.  Where will Elorza find the money to achieve these goals -- and will they translate into academic success?

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One Providence?

In the next two weeks, Elorza will be making staffing decisions that will set the tone for the new administration.  Elorza won overwhelmingly on the East Side -- will he cull his talent from the 02906, or will he reach out to leaders across the city to comprise an administration reflective of the entire city's population?  How will Elorza achieve the vision of "One Providence?"

 
 

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