Providence Mayor Jorge Elorza described a $772 million budget proposal he unveiled Tuesday as a way to strengthen Rhode Island’s capital city.
Yet Elorza steered clear of mentioning the city’s massive unfunded long-term pension obligations. And a key city councilor indicated that some of the mayor’s new initiatives may need to be cut to mitigate the effect of a recent property tax revaluation.
Elorza struck a positive note in his 25-minute budget address, speaking to an audience of city employees and well-wishers in council chambers at City Hall. He called Providence “a city on the rise” and said communities across the U.S. offer a kind of answer to the dysfunction associated with Washington politics.
“And regardless of the issue, from climate change to compassion and kindness, Providence is part of a large network of cities that is stepping up to meet the needs of our constituents,” Elorza said. “We are lowering crime, providing summer jobs, investing in infrastructure, supporting our people and encouraging development. All the while, we are delivering on what we’ve been elected to do.”
The spending plan unveiled by the mayor marks about a three percent increase from the city’s current budget.
On education, Elorza’s plan increases the city’s contribution to schools by $1.5 million, to $130 million. It includes $750,000 to support “culture coordinators” at Providence’s seven middle schools. Other education spending includes a $75,000 increase, to $350,000, for the Providence After School Alliance; $425 for the early intervention program Providence Talks; and $1.2 million, an increase of $200,000, to provide summer jobs for youths.
“We want our kids and our families to know that we have their back,” Elorza said. “Just last year, voters overwhelmingly approved a school infrastructure investment and we will now begin $400 million worth of improvements to our school buildings over the next decade.”
The mayor’s budget includes almost $400,000 for his signature cultural festival, PVDFest.
It also calls for the development of an affordable housing strategy, would direct $50,000 for a pilot program to discourage absenteeism by putting washing machines in schools, and steer $20,000 for a separate pilot program to pay for doulas, professionals trained in childbirth, to seek better healthcare outcomes, particularly for women of color.
Elorza’s budget continues a trend of making a full payment toward the city’s pension fund, of $86.7 million. It also directs a proposed $3.7 million to Providence’s rainy day fund.
But the mayor did not mention during his budget address how Providence has less than 30 percent of the money needed to meet its long-term pension obligations. As a result, pension payments are consuming a steadily larger amount of money from the city.
Speaking with reporters in his office afterward, Elorza, borrowing an analogy from former councilor Sam Zurier, likened the pension time bomb to global warming, as an approaching problem that defies an easy solution. He also defended his handling of city finances.
“We’re also managing our finances so that we’re staying within budget, we’re budgeting responsibly,” Elorza said. “We built up a rainy day fund. We have had our credit rating upgraded and we’re investing in infrastructure. It’s all part of the same pool.”
John Igliozzi, chairman of the City Council’s Finance Committee, did not have an immediate opportunity to review all of the details of the city’s budget. But Igliozzi said he expects the council to try to mitigate the effect of higher property taxes being caused for some residents due to how a recent revaluation revealed high property values.
“We have to make sure the basic things worked and they’re funded correctly,” Igliozzi said. “Then when you come to the rest of the other items that are funded through the city budget, which are sometimes discretionary, you have to start looking at those things. By looking at those you can then hopefully make some adjustments on the tax rates that are going to impact the people who are in those economically challenged areas.”
The council will spend the coming weeks reviewing Elorza’s budget. The city’s next fiscal year starts July 1.
