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Scott MacKay Commentary: Where Are The Providence Pols On City Financial Woes?

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Once again, an independent agency has questioned Providence city government’s financial direction. RIPR political analyst Scott MacKay wonders why...

Once again, an independent agency has questioned Providence city government’s financial direction. RIPR political analyst Scott MacKay wonders why Mayor Jorge Elorza and the city council aren’t taking this more seriously.

Providence’s financial condition is too much like that old movie Groundhog Day, where the past gets repeated over and over.

The latest warning flag was waved last week by Moody’s Investors Service, which tracks the credit worthiness of cities and states. The ratings agency trimmed the city’s outlook to negative, citing weak cash flow and the city’s pension and health-care liabilities.

The Moody’s analysis came on the heels of a state auditor’s report in October that raised more concerns about Providence’s finances, noting that the city has run deficits in five of the last seven years despite the state law that requires balanced budgets.

Sadly, not much is new here. Our capital is a storied American city, steeped in a history that harkens to colonial times. Providence has some of the New England’s top hospitals, colleges, parks,  museums  and houses of worship.

All of these grand non-profit institutions draw thousands to the city every day. They provide well-paying jobs and generate income and sales taxes that flow into state coffers. What they don’t yield is property taxes and payments in lieu of taxes at anywhere near the rates levied on homeowners and businesses. And don’t even start a conversation with a Providence resident about car taxes unless you are ready for an earful.

Providence isn’t, of course, all pretty campuses and fancy downtown office buildings. Abandoned houses and buildings litter our poorer neighborhoods. An iconic downtown building, the Industrial National Building known locally as the Superman, stands empty, a glaring reminder of what was once New England’s tallest skyscraper.

Rhode Island’s largest city is also host to crime-pocked neighborhoods, potholed streets and poorly performing schools. And the city’s finances have been precarious for years; former Mayor Angel Taveras and the city council not so long ago seriously pondered a Detroit-style municipal bankruptcy.

This isn’t the fault of either Elorza, who hasn’t been mayor for even a year, or the council. Providence’s difficulties have piled up over the years and were known to any serious student of the city’s politics. Moody’s referenced a stark fact – that one in four dollars spent in operating funds went to the legacy costs of debt payments, pension contributions and retiree health benefits.

A budget built on such a flimsy foundation is not sustainable. Everybody with a stake in the city’s future knows this. So where is the urgency?

Elorza has been a sincere champion of the arts and education. He has been on trade missions and speaks often of growing the economy. And he has been involved in negotiations over moving the Pawtucket Red Sox to the city.

The mayor and city council president, Luis Aponte, also floated plans for a new trolley system that would run from the East Side to the South Side. And the mayor has become  ensnarled in a bitter joust with the firefighters’ union, a process blemished by confrontation instead of negotiation.

What’s needed at City Hall now is a sharp focus on the city’s finances. Elorza owes it to his city and state to publicly and loudly address these challenges.  The mayor is trained as an accountant and lawyer, so he knows they are few routes to solvency.

City Hall either has to cut expenses, raise taxes or harvest more money in state aid from Smith Hill or in payments-in-lieu of taxes from the non-profits.

So far, there hasn’t been much public explanation from either the mayor or the council on how to stanch budget red ink.  The mayor’s spokesman, Evan England, says Elorza is working on an `action plan’ to be released after the holidays.

Aponte talks about better financial management, but he and his council colleagues go their merry way, loading up the city payroll while neglecting fiscal prudence. Exhibit A: The recent hiring of a former city councilwoman to a $60,000 a year job as liaison from the city clerk’s office to the city council. And, of course, the hiring of Buddy’s Cianci’s campaign manager to be the council’s chief of staff.

Ballparks, trolleys, arts festivals and improving the economy may be great goals. But without the money to pay the tab, none of these things are ever going to happen. What business wants to move to a city perpetually on the brink of insolvency?

It’s well past the time for the mayor and the council to get working on a plan to improve the city’s finances. There really is no alternative for our glorious, struggling capital.

Scott MacKay’s commentary can be heard every Monday at 6:40 and 8:40 on Morning Edition and at 5:44 on All Things Considered. You can also follow his political reporting and analysis at our `On Politics’ blog at RIPR.org

Scott MacKay Commentary: Where Are The Providence Pols On City Financial Woes?
Scott MacKay Commentary: Where Are The Providence Pols On City Financial Woes?