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Elorza Unveils $696 Million Budget Proposal: Fee Hikes, But NoTax Increases

Providence Mayor Jorge Elorza on Wednesday touted his proposed $696 million budget for the fiscal year starting July 1 as a way to continue the capital...

Providence Mayor Jorge Elorza on Wednesday touted his proposed $696 million budget for the fiscal year starting July 1 as a way to continue the capital city's financial recovery while making it more business-friendly.

The spending plan, which represents a 2 percent increase over the current year, contains no broad-based tax increases, although it raises the cost of building permits and city licenses by 10 percent each and plans for $2 million in additional parking meter revenue, possibly by boosting meter rates to $5 to $10 an hour for spots near the Civic Center and PPAC during events.

The budget has money to add new cadet classes of 32 police officers and 52 firefighters. After a bruising winter in which City Hall's snow-removal efforts came under heavy criticism, it also increases funding for the Department of Public Works.

"The $696 million budget that I present to you this evening sets Providence on a firm path for the future," Elorza said while speaking for about 32 minutes in City Council chambers on the third floor of City Hall. "It includes new investments in innovation, city services, public safety, school leadership and improving our quality of life. It relies on strong management to keep us moving forward and on fiscal discipline as we work to eliminate both the cumulative and structural deficits that I inherited. This budget hits the reset button and plants the seeds for a new Providence."

You can read the mayor's prepared remarks here.

Elorza's spending plan includes no money for raises for city workers, despite how contracts are expiring for more than half of the municipal workforce. The mayor acknowledged while speaking to reporters later in his office that including money for raises would have been "like negotiating against yourself. But rest assured, once we sit down and negotiate, I'm not going to sign a contract that we just can't afford."

City Council President Luis Aponte reacted generally favorably to the mayor's budget proposal, although he said the council remains committed to supporting a landlord tax break worth $6 million that was eliminated in Elorza's budget. “I think there’s broad support across the council, " Aponte said. "The matter was vetoed and overridden," during the tenure of former mayor Angel Taveras, "so there at least 10 members who still support it.”

Aponte said the council might be more amendable to phasing out the landlord tax break over time.

Elorza's budget also relies on the restoration of a $2.5 million cut in state payment in lieu of taxes, known as PILOT, and an expectation that the state will expand Providence's PILOT money by a similar amount.

City Hall said the budget wipes out a deficit that was between $10 million and $15 million when Elorza came into office in January, after defeating Buddy Cianci in November, in part by changes to healthcare expenses, eliminating some positions, and other changes.

Elorza said his spending plan marks the fourth consecutive year without an increase in the commercial tax rate. He said creating a business concierge position in the city's Economic Development office will help clear away red tape.

“This person will work directly with developers along with small business owners who are looking to invest in our city, so that they have an advocate in the city to shepherd them through the permit process," the mayor said. "This has been talked about for many years, but we are finally doing it.”

Elorza says the city is also planning a customer service initiative to make city employees more helpful to citizens.

With a Reaganesque flourish, Elorza highlighted a formerly homeless family in the City Hall audience, the Reyes, who, he said, found a more stable footing with help from the city and others. "We pledged to stay on the case and we did," Elorza said. "I can't help but believe that if Providence were an easier place to do business, we would have more job opportunities for people like Mr. Reyes."

Other highlights from the mayor's budget:

-- The spending plan books $650,000 in savings initially, and more than $1 million a year after that, by buying the city's streetlights from National Grid and operating them at a lesser cost.

-- The budget fully funds the city's annual required pension payment.

-- While Elorza called the former I-195 land in the city a once in a lifetime opportunity for economic development, he made no references during his budget address to the PawSox' proposal for a Providence stadium. He said later the topic wasn't germane to the budget.

-- Through increased state aid, the budget increases education spending by $7.2 million.

The council has roughly two months to consider Elorza's spending plan before passing it.

Elorza is set to begin stumping for his budget immediately. He's staging a Thursday news conference on community policing, two top aides to the mayor are set to give the council a detailed briefing on the spending plan later in the day.

Elorza Unveils $696 Million Budget Proposal: Fee Hikes, But NoTax Increases
Elorza Unveils $696 Million Budget Proposal: Fee Hikes, But NoTax Increases