2020 Budget Has First Passage
Providence City Council Votes to Pass the Fiscal Year 2020 Budget
Which Includes a Homestead Exemption to Protect Homeowners
Tonight, the Providence City Council convened for a special meeting for first passage of the 2020 FY budget which will benefit all residents. The City Charter requires there to be two passages before the budget can be formally adopted, and the second and final passage will happen next week.
The FY 2020 budget includes a tax levy ordinance that brings back a homestead exemption (in addition to other exemptions like senior, widow, veteran, etc.) The levy is a flat tax rate of $24.56/per thousand along with a homestead exemption of 40%. Below is the formula to find your proposed tax rate:
(Assessed Property Value – 40%) x $24.56 ÷1,000 = FY2020 Property Tax Bill
The FY 2020 budget will provide the actuarially required contribution to the City’s pension fund; will include funding for quality of life services, increases funding for the Providence School Department, and ensures that the City will meet all of its financial obligations and maintain its bond ratings.
“I am very proud of the work the Council’s Committee on Finance has done on this budget and their thoughtful approach to helping protect our most vulnerable homeowners,” stated City Council President Sabina Matos (Ward 15). “I am also happy that we were able to reach an agreement with Mayor Elorza and his administration. Our goals are the same, we want the best for the City of Providence and by working together we can make real change. We have a lot of work to do to improve quality of life, public safety, and most importantly – to make effective change in our public school system. And I firmly believe that is only going to happen by working together, and although this process took time, we have made great strides and I look forward to working with the Mayor and his team.”
“I have been at the negotiation table numerous times,” stated Chairman of the Committee on Finance Councilman John J. Igliozzi (Ward 7). “This budget season is no different than others – our goal has always been to promote quality of life issues and to protect the tax payer. We worked very hard to help mitigate the tax increases that many of our residents were faced with after their revaluations, and I strongly believe that bringing back the homestead exemption will help nearly every resident. I want to thank my fellow members of the Committee on Finance, my colleagues on the Council who provided spirited discourse and engaged in the process, the Council’s finance team, the City’s Finance Director Larry Mancini, and Mayor Elorza for their efforts in creating a budget that serves all.”
The City Council leadership team continued to meet with Mayor Elorza and members of his team for further negotiations after the budget passed out of the Committee on Finance which resulted in adjustments to the FY 2020 budget. The budget still calls for certain austerity measures, but will provide increased funding for Arts, Culture, & Tourism, reinstates funding for a Providence Fire Chief, and other minor adjustments.
Budget Initiatives Include:
- Fully funded the school department, and added an additional $1.5M to their budget to address immediate needs.
- Created a flat tax rate and provides homeowner tax relief by bringing back the homestead exemption.
- Removed all non-obligated pay raises.
- Removed all proposed non-obligated new jobs.
- Level funded almost all programs and departments.
- Increased funding for summer job programming by $1M, which puts our city’s youth to work to gain experience and provides pathways for future employment.
- Converted ten temporary assistant recreation director positions into full-time ones, in order to provide the wrap-around services that our students need to succeed.
- Froze the commercial and tangible tax rates, providing business owners with the certainty they need to prosper.
Vice-Chairwoman of the Committee on Finance and Council Majority Leader Jo-Ann Ryan (Ward 5) stated, “The City Council Leadership team has worked very hard to mitigate the adverse effects of the property revaluation that occurred earlier this year, and I am proud to have been part of the solution. I want to thank the hardworking members of the Council’s Committee on Finance and the Council’s finance team for helping craft a budget that is fiscally responsible, ensures the city is meeting its financial obligations, and provides for services that are important to a vibrant and culturally diverse city like Providence.”
The City Council will hold a special meeting on Tuesday, July 9, 2019 for the second and final passage of the FY 2020 budget.
Budget Breakdown
Revenue Increases
$55,000.00 in additional dumpster fees
$250,000.00 in additional overnight parking permitting fees
$200,000.00 in Providence Place Mall PILOT payment
Total: $505,000.00
Spending Increases
$82,500.00 for Chief Financial Officer (Mayor’s Office)
$532,617.00 to make 10 temporary Assistant Recreation Directors permanent positions to provide wrap-around services that our students desperately need
$35,772.00 for an additional clerk in the Municipal Court
$3,705.00 for maintenance contracts in the City Clerk Departments
Total: $654,594.00
Spending Decreases
$25,000.00 removed for non-contractual pay increases in the Law Department
$82,500.00 was transferred to the Mayor’s office in support of the chief financial officer position, so the funds were removed from the Finance Department
$17,258.00 removed for the non-contractual pay increases for the city collector, deputy city collector, and assistant city collector
$5,250.00 removed the non-contractual pay increase to the deputy assessor
$171,586.00 removed the non-contractual increases to union and non-union members in the IT Department
$400,000.00 removed funding for nine police officers that could not be hired due to lack of a Police Academy in FY2020
$101,467.00 removed salary of director and new workforce development associate (both vacant)
$291,000.00 decrease in seasonal salaries as a result of hiring one full-time recreation center director
$8,200.00 removed the non-contractual increase to the director in the Human Relations Commission
$2,758.00 removed the non-contractual pay increase for the deputy director in Arts Culture and Tourism
$29,530.00 removed non-contractual increases in salaries in the City Council
$50,847.00 removed salary of the stenographic reporter (vacant)
$16,835.00 funded only 9-months of auditor school
Salary Review Commission Decreases
$20,016.00 removed due to not being approved by the Salary Review Commission (Finance Director)
$39,284.00 removed due to not being approved by the Salary Review Commission (Commissioner of Public Safety)
Operational and Technical Decreases
$200,000.00 removed from the police department for a training facility, and travel/training expenses
$100,000.00 removed from the fire department for training academy (not planned)
$225,000.00 was removed to keep advertisements, rentals, and contractual services level funded for the Arts Culture and Tourism department.
$75,000.00 was removed to keep level funding for consultants in the Planning Department (last year they only spent $65K or $200K on consultants)
$160,000.00 was removed to keep building repairs level funded in the Public Property Department
$17,500.00 was removed to keep training and miscellaneous materials level funded in the City Council
$60,000.00 decreased in miscellaneous expenses in the City Archives
$94,500.00 transferred expenses for five Speed Alert Radar Messages to the master lease
$80,016.00 transferred expenses for FATS Simulator to the master lease
$84,489.00 will be removed due to payroll tax associated with the salary decreases
Total: -$2,358,036.00
Bringing Back the Homestead
The City Council Leadership Team Announces Tax Levy to Benefit All Residents
In April of this year, Mayor Elorza presented to the City and the Council his 2020 budget which included a $15 Million increase from the last fiscal year. In his proposal and budget address, the Mayor failed to mention the severity of his tax levy increase and how it disproportionately burdens the City’s most vulnerable residents. Under his proposal, the City’s lowest-valued homes would see tax bills jump upwards of 20% while the City’s most valuable homes would see decreases in their tax bills.
As a Council, we find it unsettling to request a budget increase of $15 Million by asking our hardworking taxpayers to pay more. That’s why today, the City Council leadership team, introduced a tax levy proposal which includes a homestead exemption that more equitably distributes the burden of the costs of running our City across all of our residents.
“The plan that we are proposing would give a 40% exemption for the first $350K assessed value for homeowners, and then a 28% exemption on the assessed value after that,” stated Council President Sabina Matos. “This plan provides much-needed relief for those individuals who are on fixed incomes or are single parents and just trying to make ends meet. I think of people I know in our community, which with the revaluation saw massive increases in their assessed values. This plan would help mitigate that huge tax burden, and provide much-needed assistance to all residents in every neighborhood across Providence.”
Currently, our City is facing serious financial challenges like an unfunded billion dollar pension liability, skyrocketing infrastructure needs, and while the Council acknowledges these expenditures to be essential, we don’ t think they should be collected on the backs of our most vulnerable residents. We have been working through the budgeting process and feel that this plan helps to mitigate the imbalances in the Mayor’s proposal.
Chairman of the Committee on Finance, John J. Igliozzi stated, “There is not an endless source of money to keep our city running, and as one of the only cites in the state of Rhode Island that does not have a homestead exemption, it only makes sense that we explore this route.
As we move forward through this budgeting process, the Council hopes that we can come to an agreement with the Mayor and his administration that is equitable and fair for everyone.
Council President Pro Tempore Correia and Senior Deputy Majority Leader Narducci Host Luncheon for DPW Workers
In honor of the National Public Works Week Council President Pro Tempore Michael Correia, Chairman of the Committee on Public Works and his colleague Senior Deputy Majority Leader Nicholas Narducci Jr. hosted a luncheon in appreciation for the hard work of the men and women of the Providence Department of Public Works.
Councilwoman Jo-Ann Ryan: Providence Needs to Move Forward
When a majority of the City Council came together to vote “Yes” for a zoning change that would allow a new $300-million development to go forward in our city, generating an estimated $4 million in annual tax revenues, it was an important sign that we understood the need to move Providence forward.
For too long, the city has been seen as fostering an anti-development culture. Instead of looking at economic development opportunities as a chance to get things done and generate vital revenue for Providence, some city officials appear to be more interested in imposing unreasonable demands on those who are willing to invest in the city. The fact is, we should be welcoming those who see promise in Providence and are willing to spend money to do business here.
It’s no secret that our city faces significant challenges, among them staggering pension liabilities that threaten to plunge us into possible bankruptcy. Many of the city’s schools are struggling and we received word this week that Rhode Island’s schools as a whole are underperforming, with a Dec. 2 Providence Journal editorial noting that “Rhode Island’s public education system is woefully bad” and that the situation “presents a direct threat to the state’s chances of rebuilding its economy.”
The disturbing results of the Rhode Island Comprehensive Assessment raised a serious alarm. We are lagging behind Massachusetts, because our neighbors to the north made a commitment to improving their schools as part of a broad approach to economic development and job growth. We can do the same, but the only way to get on the road to making that kind of meaningful, sustained commitment is to take advantage of significant opportunities when they present themselves. That is how we get on a path to making things better.
In this environment, rejecting a proposal like the Hope Point Tower is not just reckless and irresponsible — it does a disservice to our taxpayers. It ignores the need to get things moving in our city, to show some signs of progress with the I-195 redevelopment zone, an area that was created for the expressed purpose of generating new development and jobs. But it isn’t just about reshaping our city’s skyline … it’s about sending a message that Providence is serious about getting its economy on track and taking the bold action necessary to revitalize our city.
The Providence Journal implored Mayor Jorge Elorza not to stand in the way of this project. The speaker of the House and Senate president rightly called on him to act and reminded him that this was a chance to change the perception that the city was “mired in the same bureaucratic delays and barriers that have held it back in the past.” And the City Council gave him the chance to green-light this vital project and create a new sense of energy in Providence.
Unfortunately, the mayor missed an opportunity to lead. I hope my colleagues on the City Council will come together to recognize that our city deserves better. We need to take action now to change the culture and show that Providence can effectively promote and support economic development. We can do it as part of a comprehensive approach to building a strong community where businesses and individuals work in concert to help rebuild our schools, create affordable housing opportunities and make this a vibrant city that is a destination for those seeking a strong quality of life.
It starts with vision, the ability to see that a zoning change can represent a change in attitude, a shift in perspective, and a willingness to do things differently. By letting the Hope Point Tower go forward, we can finally begin to make good on the promise of the I-195 redevelopment zone, approving a signature project that will spark further development, while creating desperately-needed jobs and generating essential tax revenue.
*Originally published by The Providence Journal on December 4, 2018
Statement on Hope Point Tower from Councilman Terrence M. Hassett
I am encouraged by the support shown for the Hope Point Tower project by my colleagues in the Rhode Island General Assembly, most notably Senate President Dominick J. Ruggerio and Speaker of the House Nicholas A. Mattiello. I also believe that Mayor Jorge O. Elorza has been thoughtful in regards to this project and am hopeful that he will work with the developer, Jason Fane, to resolve any differences.
The Hope Point Tower represents a $300 million private investment in our City at a time when we face serious financial challenges from our pension liability and aging infrastructure. In addition to that private investment, the development will generate an estimated $4 million in tax revenue annually and will create 1,500 high-wage earning construction jobs over the next three years. This investment increases our tax base, and the economic impact of this project will be felt in all sectors of Providence.
By moving this project forward, Providence is poised to embark on one of the largest economic development plans since Providence Place Mall and the Renaissance Hotel. Like Hope Point Tower, these projects also faced criticism, and many said they could not be done. But with collaboration between the developers, city planners, and the City Council we were able to bring these projects to fruition and they are now part of the very fabric that makes our City unique and vibrant.
Over my 21-year career on the City Council, I am most proud of projects like the Hope Point Tower. Creating jobs, revitalizing neighborhoods, and making the City I love a great place to live and visit is a remarkable gift. During this time of Thanksgiving, I am thankful for the opportunity to have served, and I look forward to seeing Providence continue to grow.
—Terrence M. Hassett, Senior Deputy Majority Leader, Councilman Ward 12