The Providence City Council is one vote away from blocking a major tax increase a critical step that Mayor Angel Taveras says is necessary to reach a balanced budget next year and avoid an even worse financial crisis.
In his budget address this week, Taveras said he would seek a 5.25 percent increase in the amount of money the city raises in taxes next year—one percent above what is normally allowed by state law. Underreported has been the process for how he could get the higher increase. State Law does say that communities first have to appeal to the state Auditor General to certify the “existence or anticipated existence” of a financial emergency.
But Taveras would still need the approval of a four-fifths supermajority of the 15-member City Council, meaning that just four members could block the move.
Councilman: Constituents ‘actually begging’ me to oppose tax hike
At least three council members told GoLocalProv that they outright oppose tax increases—Sabina Matos, Michael Correia, and Wilbur Jennings.
“I don’t think there should be any tax increase in Providence under any condition,” Correia said.
“To me, to vote for a tax increase right now, it’s a no a definite no,” said Jennings.
Both councilmen said the residents in their wards were already too burdened by the recession to absorb a tax hike. Jennings said he has been getting phone calls from constituents who are unemployed and facing foreclosure. They have told him they worry they could lose their homes if they have to pay more in taxes.
“I’m getting hammered by my constituents. They’re really fed up,” Jennings said. “People are actually begging.”
Amounts to a 13.6 percent increase
Under the proposed budget, the residential tax rate would go from $30.38 per $1,000 in property value to $34.50. Taking into account the homestead exemption, the effective rate would jump from $15.19 to $17.25. That means that the owner of a home valued at $400,000 would be paying $824 more in taxes seeing their tax bills go from $6,076 in the current year to $6,900 next year, according to Gary Sasse, the fiscal advisor to the City Council.
That amounts to a 13.6 percent increase in residential taxes on owner-occupied homes, Sasse said.
Correia said he knew of mothers and fathers in his ward who are working two jobs each just to keep up with their mortgage payments and expenses like skyrocketing gas prices. “Families are struggling,” Correia said. “We just can’t do it to them. I can’t do it to them and I won’t.”
Matos said the increase is not fair. “I’m not in agreement with the proposed increase for the property taxes,” Matos said. “I don’t think it’s fair to go back to the residents to foot the bill.”
Nine councilmen: Only as a last resort
Nine other council members—a solid majorityaren’t too happy with the tax increases either, but they said given the dire financial situation the city is facing they could not rule it out as an option they might support as a last resort.
“Nobody likes tax increases. I look at it as probably the last resort,” Council President Michael Solomon (pictured left) told GoLocalProv. “If there’s a way to avoid a tax increase, I’m all for it. If there’s no way we can avoid it, absolutely we’d have to support it.”
Taveras spokesman David Ortiz said the city already has exhausted all of its options and is looking at the tax increase as a last resort. “This is a budget of last resort. We are doing everything we can to close an unprecedented structural budget shortfall and put Providence back on solid ground,” Ortiz said.
He added: “We all want the same thing, which is to deliver Providence from this very real crisis. We can’t do this work without the council.”
One city hall source estimates that roughly three fourths of the $110 million structural deficit is being eliminated through spending cuts the remainder depends on increased revenues. “This is not a tax-and-spend budget,” the source told GoLocalProv.
‘We can’t have our city implode that wouldn’t help anybody’
Other councilmen agreed with Solomon, saying they are struggling with the issue.
“At the appropriate time, I would vote for it. I think that time would be after we have pursued revenues from the General Assembly and exhausted the issue of the tax exempts and their impact on the tax base,” said Luis Aponte. “It’s a difficult vote to take because I don’t think it’s a popular vote.”
“It’s not something that I would jump on right away until I can really digest the whole thing,” said Miguel Luna. “It’s too soon to take a position to be in favor of or against.”
Bryan Principe said he is keeping all options on the table. “People are hurting and I share in that,” Principe conceded. But, he added: “We can’t have our city implode. That wouldn’t help anybody.”
Terry Hassett, the President Pro Tempore, said the council supports Taveras. He said that Taveras’ honesty and straightforward-manner had personally earned his support for the mayor. But, as to the specific tax proposal, he said the council would still need to study it before it took a position.
Councilman proposes eliminating police and fire chiefs
In his budget address, Taveras said all of the measures he was proposing were necessary to avert financial disaster. But Correia and Jennings said they weren’t convinced there isn’t room to trim more spending.
Correia suggested even more drastic cuts. For example, he says the city should think about eliminating the police and fire chief positions. “With a public safety commissioner do we really need a police chief and a fire chief?” Correia said, noting that the Police Department would still have a deputy chief in place. “We can save that astronomical salary of $200,000 that we’re paying Colonel Esserman,” he said.
Likewise, he said the city is paying $25,000 each year to have trash picked up from the public safety complex. “Why are we paying a contractor $25,000 to pick up trash?” he said. “We can’t do that in house?”
He ticked off a number of other cuts and cost-saving measures: eliminating tens of thousands of dollars in longevity payments, privatizing the forestry division, and ending mounted police patrols. “I don’t think it’s going to jeopardize public safety if we got rid of the horses,” Correia said.