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Elorza Says Further Steps Needed to Stabilize Providence's Finances

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Providence Mayor Jorge Elorza said Thursday an independent analysis shows Rhode Island's capital city will face a stream of annual structural deficits...

Providence Mayor Jorge Elorza said Thursday an independent analysis shows Rhode Island's capital city will face a stream of annual structural deficits of between $11 million and $19 million, starting in July 2016, and he called for new steps to strengthen the city's financial standing.

Elorza pointed to plans to use his first budget to target $2 million in new parking revenue as part of the response. He said the city is immediately shifting the Providence Fire Department from four platoons to three, to cut overtime spending, and will seek a long-sought overhaul of the Providence Schools' central office. He said the change in the Fire Department will save about $5 million a year.

Elorza, who took office in January, said he was reacting to findings by Public Financial Management, with a baseline forecast and projections extending through fiscal 2021.

The Providence Firefighters' union reacted with a statement criticizing the platoon shift.

"We believe shift plans have always been a collective bargaining issue and there is a long history of both labor and management respecting that right regardless of recent judicial rulings,” said Paul Doughty, president of Providence Fire Fighters IAFF Local 799. “The mayor without negotiation or discussion has increased every fire fighters’ work week by fourteen hours without offering any details regarding compensation or how this will save taxpayers money. He also hasn’t said how this will increase public safety.”

A 2013 lawsuit filed by Local 799 claimed the city had violated the Fair Labor Standards Act. Mediation has  been ordered in the case. Doughty said the union considers Elorza's platoon change a form of retaliation: "It goes without saying fire fighting places both stressful and physical demands on our members. Today’s unilateral action by the mayor reduces critical time off for our members while increasing weekly hours by 33 percent, without additional compensation. We plan on fighting this decision.”

As he did during his budget address, Elorza said he wants to hold the line against commercial and residential tax increases.

While Providence doesn't face the dire fiscal straits that led Central Falls into bankruptcy, Elorza said, other steps are needed to prevent the city's financial condition from deteriorating.

“We are sounding the alarm," Elorza said. "If we do nothing, by 2021, we’re going to find ourselves in a very different position where we don’t have many options. That’s why we’re acting now, and I am committed to making sure that we not kick the can down the road any more. We have to act and we have to act now."

Elorza cited rising healthcare and pension costs, the loss of tens of millions in state aid, and limited growth in tax revenue as factors driving the city's built-in deficit in the years to come.

While the situation is less grave, Elorza's approach in drawing attention to the city's challenge was reminiscent of how his predecessor, Angel Taveras, warned of an unexpected "Category Five" fiscal hurricane after taking office in January 2011.

This post has been updated.

Elorza Says Further Steps Needed to Stabilize Providence's Finances
Elorza Says Further Steps Needed to Stabilize Providence's Finances