September 30, 2014
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Undaunted, Chafee pushes bills to address city pensions
NOTHING TO SMILE ABOUT: Cranston Mayor Allan Fung and Warwick Mayor Scott Avedisian prepare to testify last Thursday before the Senate Finance Committee on the legislative package the governor is offering to help municipalities.

Lincoln Chafee didn’t take it as a kick in the teeth, although some saw the advice coming out of the treasurer’s office as aimed directly at the governor’s efforts to give municipalities the legislative tools to avert bankruptcy.

Tuesday, at the end of a three-hour pension workshop at the Knight Campus of CCRI, the treasurer’s lawyer told the assembly of municipal finance officials to remember two words, “legislation last.”

The comment from Mark Dingley comes at a time when Chafee is pushing his legislative package lifting state mandates and giving distressed municipalities the ability to suspend cost of living increases that threaten bankruptcy. Thursday evening, Chafee, followed by a lineup of mayors, appeared before the Senate Finance Committee to underscore the severity of the situation and the need to do something now. After testifying, Chafee was asked about Dingley’s comment and whether he thought it would hurt chances for passage of the legislative package.

“I don’t think Mark understands the magnitude of the deficits facing municipalities,” Chafee said. The governor emphasized that his bills would give municipalities the ability to choose what they think best, letting local leaders make the decisions. Chafee didn’t offer a view on the chances of the package being approved.

Daniel Beardsley, president of the Rhode Island League of Cities and Towns, feels legislators are already questioning the governor’s package and Dingley’s comments give them more reason to back away from the governor’s proposal. Without the legislation, Beardsley predicted three or four municipalities would file for bankruptcy, sending shivers through the state economy and scaring businesses that might otherwise come to the state and bring new jobs with them. A spokeswoman for Gina Raimondo said yesterday the treasurer favors the governor’s legislation and that Dingley urged municipalities to thoroughly examine options before taking legislative action. “The treasurer is fully committed to working with the municipalities on ailing plans,” said Joy Fox from Raimondo’s office. Cranston Mayor Allan Fung thinks the legislation is vital, although he thinks most municipalities will use only a few of the tools. “It gives them the flexibility to manage their budget,” he said. As for Cranston, Fung is looking for the power to suspend cost of living increases in the city closed fire and police pension. That pension fund is 15.8 percent funded.

Thursday’s Senate Finance Committee hearing had the feel of an impending storm. Scores of firefighters, who oppose many of Chafee’s measures because it would negate benefits they feel they properly won in negotiations, wearing black T-shirts, filled virtually every spectator seat in the room. Camera crews and reporters leaned against walls and, with bright lights casting dark shadows, videotaped proceedings. The door to the room was blocked with people looking to get in.

Tempers were in check and there was no jeering, or for that matter, cheering.

In somber tones, and referring to a chart showing cuts in state aid to Providence, Pawtucket, Woonsocket and West Warwick in recent years, Chafee illustrated how municipalities will have no alternative but dramatic increases in taxes to avert bankruptcy.

Fung told the committee municipal employees have helped Cranston address its budget but urged passage of the legislation to provide the “leverage” needed to make additional adjustments.

Mayor Scott Avedisian said Warwick is particularly interested in two of the governor’s seven bills. He cited the school spending accountability act and a waiver to the maintenance of effort for municipal funding. He urged for a uniform budgeting process so that municipalities can draft a comprehensive budget without getting a school budget late in the process or not at all. He also pointed out if a school department runs a deficit, as has happened in Warwick, what the department spent, including the deficit that must be made up by the municipality, becomes the starting point for the next budget and the maintenance of effort. Chafee’s waiver would put an end to such “windfalls.”

Chafee said his legislative package is the result of asking mayors and town managers what they want and need to avert bankruptcy and improve financial stability. He called it “a bottoms up” effort, adding, “what we don’t want are radical decisions by un-elected people.”

Pawtucket Mayor Donald Grebien said he is working with the unions and looking to address the issues cooperatively.

“Give us those tools,” he said. “We’re not going to circumvent the process.”


Comments
3 comments on this item

Scottie....it is not the school dept that needs the audit...it is city government. For the last few years all the incresed tax dollars have gone for salary and benefit increases to city workers.

Scottie...you have put the city on the path to bankruptcy. Your legacy will be the same as Cillicene was in Prov....catered to the unions and bankrupted Warwick. How much is our unfunded liabilities for pension and healthcare? You are a disgrace.

Who is responsible for new property and car taxes in the city of Warwick for the past few years- IS IT CITY OR SCHOOL SPENDING?

Take a look at the local tax dollars allocated to the city and school budgets since 2007 for the answer:

LOCAL TAX DOLLARS TO SUPPORT THE CITY BUDGET OVER THE LAST 5 YEARS

2007 - $63,926,230

2008 - $67,056,675

2009 - $76,149,571

2010 - $78,525,638

2011 - $89,324,368

2012 - $96,387,946

LOCAL TAX DOLLARS TO SUPPORT THE SCHOOL BUDGET OVER THE LAST 5 YEARS

2007 - $113,126,355

2008 - $118,064,827

2009 - $118,064,827

2010 - $123,968,468

2011 - $117,769,632

2012 - $117,769,632

CONCLUSION#1: Since 2007 city spending of local tax dollars has increased over 50%

CONCLUSION#2: City spending is at an all time high

CONCLUSION#3: School spending of local tax dollars is below 2008 levels.

GRAND CONCLUSION: CITY SPENDING IS RESPONSIBLE FOR 100% OF NEW TAXES ACCESSED IN WARWICK FOR THE PAST YEARS.

Both City & School spending in Warwick are out of line; student enrollment has been dropping. The Warwick School Budget should be on par with the City of Cranston-the School Dept. & School Committee need to accept that. Both communities are similar in size & enrollment. I know that the prior funding method shortchanged Warwick compared to some other RI cities & towns, but it's time to move on! In the very foreseable future, Warwick can expect a decrease in funding from the new formula based on the forthcoming continued drop in student enrollment. The time is now to plan to make the changes needed. Otherwise, there will be some very painful cuts/choices down the road.The municipal budget is no better; the city can't continue to provide all services & pay the types of salaries & benefits as it does currently-the City will have a new unfunded pension problem & it won't have the tax base to finance/amortize its way out of it.

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