Following a multi-year dispute over how to fund the Providence Public Schools while they are under state control, the City of Providence now faces a significant budget gap. In November 2024, the city signed a settlement agreement with the Rhode Island Department of Education that compels a $15 million payment from the city for Fiscal Years 2024 and 2025. The settlement also requires the city to meet a baseline school funding obligation of $147 million in Fiscal Year 2026, which begins on July 1, 2025.
City leaders must now determine how best to generate additional revenue to meet this increased obligation while avoiding painful cuts to necessary city services.
Today, the City Council Committee on Finance will consider amendments to the resolution, introduced by Councilwoman Jo-Ann Ryan (Ward 5), in support of state legislation which calls for collaboration and would allow the City of Providence to increase the state-mandated levy cap by up to 4% for the upcoming fiscal year, as an additional tool if necessary to deliver a balanced budget.
The resolution also calls on the Rhode Island General Assembly to work with the city to identify and pass enabling legislation necessary to allow for new revenue sources.
Ahead of tonight’s meeting, Council President Rachel Miller released the following statement:
“The financial challenges ahead of us are serious and will require some difficult decisions. But we cannot ask homeowners, working families, and those already struggling to make ends meet to bear this burden alone. Raising the levy above the 4% cap needs to be a last resort.
“As city leaders, we have a responsibility to protect essential services, meet our school funding obligation, and make decisions that support working families. Providence urgently needs new, sustainable sources of revenue that do not overwhelmingly rely on regressive property taxes. That is why we are working closely with the administration and members of the General Assembly to identify alternative revenue streams – solutions that strengthen city finances and support residents. I’m confident that this partnership will lead to creative and balanced solutions that address these challenges.”
