Mayor Frank Picozzi has proposed a $380.3-million budget that if passed by the City Council would give most but not all of the $198.1 million the School Committee asked for and lower the tax rate, but increase the tax bills of most Warwick property owners.

A department-by-department summary of the budget and the notice of the proposed tax-rate change appears in a legal advertisement in today’s Beacon.

Although the numbers are down on paper, Picozzi said in an interview Tuesday, his biggest concern is what unknowns might still pop up in the School Department. He pointed out that, after completing its budget, the department discovered it had failed to take into account the expected spending of $2 million to $3 million in the personnel supplement.

As the proposed FY 2025-26 budget shows, the tax levy would increase from $238 million to $245.2 million, an increase of 3%.

As a result of the revaluation reflecting higher property values, the residential tax rate would drop from $14.47 to $13.34 per $1,000 of valuation.  And reflecting the relatively minor increase in commercial values, the commercial rate would increase from $25.32 to $25.45. The tangible personal property tax is capped at $37.40.

Final rates could be less

City Tax Assessor Neal Dupuis  explained Wednesday that the rates published in today’s paper are an estimate and the final rates, which he expects will be lower, won’t be set until the revaluation is certified and budget approved.  When all is said and done, he believes both the residential and commercial rates will be lower than the current rates.

Under the mayor’s budget proposal, schools would get $194.4 million, $3.9 million less than what they had asked for, which nonetheless represents a 3.7% increase in spending from the current budget. Most of the increase to schools is a result of the governor’s budget that shows Warwick receiving $49.3 million in state aid, an increase of $2.6 million.  The increase on the city side is $400,000.

Acting school superintendent William McCaffrey was highly appreciative of the state increase. He said yesterday he is looking forward to the city budget hearings and working with everyone, including the School Budget Commission.

“I think they understand,” Picozzi said of the School Committee, adding that the city couldn’t afford to give them what they requested. Troubling him is that schools don’t have a handle on their deficit or a plan to take them out of the red. The mayor is optimistic that the School Budget Commission that was scheduled to hold its third meeting yesterday afternoon will be able to get its arms around the deficits and develop a five-year plan to put the department on a positive financial footing. The commission heard last week that the deficit is $400K for FY 23 and $700K in FY 24. The projected deficit for FY25 is in the range of $7 million, making for a total of $8.1 million.

“There’s no way I can give them the $5 million to $6 million they want [to pay down the deficit],” the mayor said. Apart from needing to “right-size schools,” Picozzi said, the department can’t look at righting the ship in one year. 

Debt interest payments top $8 million

The largest single increase in city budget expenditures – a hike of 124.5% – is in debt interest payments totaling $8.7 million that is largely attributable to school improvement bonds. Picozzi is concerned by the impact and timing of issuing the full $350 million in bonds for the new high schools and said, “we’re not going to be borrowing all at once.”

Heeding forecasts that the $350 million wouldn’t be enough to complete the schools, the City Council is calling for General Assembly approval of a special election for an additional $50-million bond. Picozzi could not say when that is expected to be heard in committee, but he would like to hold the election as soon as possible. Then, with voter approval, the city would have the funds to complete the schools. If, on the other hand, voters fail to grant approval, Picozzi points out, there is no Plan B, as activist Barry Cook observed at a recent council meeting.

As for the city side of the budget, the mayor said he looked to “tighten the belt” without diminishing services or cutting personnel. He is not adding personnel, noting that the Department of Public Works, with a budget of $17.7 million, remains down 22 personnel from the staff it had in 2017. The DPW allocation is up 3.6%.

The Police Department is budgeted at $26.6 million, an increase of 6.5%, and the Fire Department is budgeted at $31 million, an increase of 7.5%.

Employee benefits are up 12.9% to $32.9 million.

The budget calls for a $3.7-million drawdown from city reserves, which are nearly $31 million.

The first of the budget hearings will be held Monday, May 19 at 4 p.m.