Moore: Elorza’s Budget Doesn’t Match His Rhetoric

Monday, May 02, 2016

Russell Moore GoLocal MINDSETTER™

 

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It's not all bad. 

Here's the good news. Providence Mayor Jorge Elorza finally seems to understand the extent of Providence's fiscal problems. His rhetoric, as of late, acknowledges them.

The bad news: Elorza's second budget proposal does little, if anything, to address those issues this year.

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That's problematic, because without a major corrective action plan, the city is going to amass  a $176 million dollar deficit over the next decade. 

A Sea of Red 

The budget raises more money from property taxes. It reduces the actual rate, but since property values rose in this year's revaluation, the city will ultimately collect 7 percent more in property taxes this year. The majority of people in the city will be paying more in property taxes if this budget gains city council approval without changes.

Yet the budget also, and commendably, decreases car taxes by increasing the exemption from $1,000 of value to $2,000. That's a boon, and folks with vehicles worth $2,000 or less won't have to pay taxes on their car. Yet make no mistake about it, taxes are going up.

Councilman Sam Zurier made an excellent point about raising taxes in GoLocal last week.

Taxes Going Up

“I think the case for the [tax increases] can only be made in the context of a broader plan of how the city is tackling its larger issues,” he said. “Can taxpayers see how this increase fits into a long term plan for sustainability for the city?  Does it justify the increases?”

Nobody wants to pay more. But reasonable Providence taxpayers will be much more understanding if they're made to feel like their additional taxes are part of a corrective action plan that sets the city on a path to financial security--not just something to get the city by until next year.

That's the problem. As of now, the city doesn't have a concrete plan to get its long-term financial house in order. Instead, the budget seems to be just another in of a string of budgets that just gets the city by until next year. They put off the difficult decisions for another year. That only makes the future pain worse.

According to a new  report released by the administration from the National Resource Network, that's not uncommon. 

Where's the Plan?

"Most cities try to manage their budget from year to year. The problem with that approach is that it makes it hard to understand the long-term costs and benefits of specific policy decisions recommends a long-approach of unceasing city revenue and budget cuts to save the city's financial future," the report states.

At least we're not alone.

The report goes on to recommend enhancing revenue and cutting expenses. The revenue enhancements include collecting closer to 100 percent of the taxes that the city is owed, creating a "pay as you throw" program for trash, and instituting a new parking tax. It also encourages the city to seek more financial assistance from the city's many non-profit agencies.

On the spending side of the equation, the report recommends that the city aim to save money by cutting back the fire department yet again--which, at this point, would make it seem like the administration is disproportionately picking on that one area of the budget. 

It also asks the administration to strike a "grand bargain" with the city to reform the pension system similar to what took place at the state level in 2011. Without real city-wide pension reform, the city will be sunk by the weight of its liabilities. 

A Grand Bargain?

Let's give Elorza some credit. He had the foresight to commission the report. And during his budget address, he made it a point to say that he plans to seek out new revenue streams, meet with unions to work on a solution to the city's massive pension problem, and seek to increase payments in lieu of taxes from non-profits in the city. While most of those things aren't reflected in the budget, it's nice to see the mayor at least talking about addressing the city's long-term financial woes. 

Yet it's frustrating that Providence is about 1.5 years into his mayoralty and we still haven't taken the concrete steps we need to fix the problem. That means two of his budgets are just "get me by" budgets. He only has four budget proposals until the next election. 

If you're from another town in Rhode Island and believe this doesn't impact you, think again. As Providence goes, so goes Rhode Island. We're really a city-state, at our essence. 

At least we're starting to face reality. 

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Russell J. 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 @russmoore713.

 

Related Slideshow: 10 Things to Know about Elorza’s Fiscal Year 2017 Budget Proposal

Providence Mayor Jorge Elorza introduced his Fiscal Year 2017 budget proposal for the city -- here are 10 things you should know. 

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Car Tax Exemption

Elorza's FY17 budget raises the car tax exemption from $1000 to $2000.  

The exemption had once been as high as $6,000 in the City of Providence, which has the highest car tax rate in the state.  

Elorza had pledged during his campaign to raise the examption up from $1000 -- which will have budgetary implications, but had been an issue of importance to Elorza due to its impace on lower-income residents. 

 

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