Solutions Offered for Providence’s Financial Problems are Too Revenue Heavy

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Well, one thing’s for certain: it’s getting pretty serious in Providence financially judging by the study commissioned by Mayor Elorza and the solutions it contains.

Providence should consider implementing new taxes, selling assets and closing fire stations as part of its effort to reduce a projected structural deficit that could balloon to $37 million over the next decade, according to a study released Monday by the Elorza administration.

The problem, unless WPRI’s Dan McGowan left significant chunks of the study out of his report (quite unlikely), is that the study offers way more suggestions for raising revenue – sell assets, raise PILOT payments, create new taxes and fees – than for reducing spending. The proposal to “transfer city janitorial services to a prisoner reentry program” is welcome – but only seven FTE’s would be affected. Where is the proposal to look at compensation levels across the entire city payroll? Yes, the study suggests broadening the suspension of the pension COLA – but doesn’t mention the pensions themselves. This would clearly be inadequate as the city’s pension fund is at best 30% funded.

Tax rates in Providence, residential and commercial, are already among the highest in the country. When are Providence officials going to start taking steps to live within a budget that TAXPAYERS can afford rather than continuing to take the easy steps of only nibbling around the edges of expenses and continuing the inexorable increase of taxes and fees?



  • D. S. Crockett

    Providence is Chicago of the East! Welcome to Chicago, progressive heaven.

  • Guest

    Providence and every city and town (except Block Island because they are exempt) plus the state of Rhode Island must raise taxes to balance the fiscal budgets. According to a study commissioned by National Grid it is estimated when Deepwater Wind demonstration windfarm comes on line 2016/2017 pumping electric power into the National Grid South County main power trunk line at 24.4 cents/kWh (over twice the national average rate) state of Rhode Island and 38 cites and town municipalities will collectively see approximately $250,000 in higher cost electric rates which will be passed on to taxpayers in higher taxes.

    The Deepwater Wind and National Grid power purchase price agreement has a built-in cost of living annual compounding adjustment of 3.5% for 20 years which means every year State of RI and 38 cities and towns will
    have to raise taxes by minimum of 3.5% to offset increased electric rates. The $250,000 will grow to almost $7,000,000 in extra taxes by end of 20 years. Deepwater Wind has a built-in financial guarantee of $900 million plus another $100 million in Federal tax credits paid for by RI ratepayers according to Forbes Magazine.

    Because state and municipalities will have to raise taxes all businesses remaining in RI will have to raise price of goods and services to pass on cost of higher taxes and higher electric rates. RI residential ratepayers
    will be forced to pay higher state and municipal taxes, higher electric rates
    and higher prices for cost of goods and services from any business still doing business in RI. A $10 basic hot dog or New York System hot wiener could become a real reality in RI! RI will have some of the highest taxes and definitely the highest electric rates in the nation higher than any state still burning imported oil.

    Deepwater Wind could become the straw that broke the camel’s back due to Chief of Naval Operations written mandate that all Navy facilities
    reduce energy usage and cost of doing business. U.S. Navy in east bay is a skeleton of what it used to be in RI. With Deepwater Wind forcing taxes, cost of doing business and electric rates up in RI the Naval War College and Naval Undersea Warfare Center both could fall under base realignment and closure and be moved south out of RI. All support companies would follow devastating east bay economy.

    The good news is RI would still be the first state in nation to have the first offshore windfarm brought to the people by the same governor that brought RI Capco Steel, Providence loan default, Providence Fruit & Produce Warehouse debacle costing the state close to $14.1 million and 38
    Studios loan default.

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