News

Jun 21, 2013

House Budget


The Woonsocket Budget Commission has been in place for a year now, working to solve our problems in a balanced way that will fairly distribute the burdens among all of the affected groups. There has been much pressure to go straight to a receiver and the Governor, state administrators, and budget commission members have done their utmost to avoid that outcome because of the significant negative affects it will have on the community.

Category: News Room
Posted by: Craig

The Woonsocket Budget Commission has been in place for a year now, working to solve our problems in a balanced way that will fairly distribute the burdens among all of the affected groups. There has been much pressure to go straight to a receiver and the Governor, state administrators, and budget commission members have done their utmost to avoid that outcome because of the significant negative affects it will have on the community.

To date, a five-year financial recovery plan has been developed and considerable work has been done to stabilize our financial activities and improve reporting within the school department. Plans have been developed that will freeze the local pension plan COLA, the five-year plan depends on considerable sacrifice by the taxpayers, asking them to contribute 4% more each year after adding $2.5 million to our tax base, pay $1 million more in trash collection fees to raise needed funds above what is allowed in the tax cap and pay for a $2.5 million supplemental tax bill. Ongoing negotiations are taking place with all unions to cut costs through a reduction in health benefits and higher payments by employees and retirees along with permanent staffing reductions in public safety. Enactment resolutions have been approved to assure the necessary savings in the event that negotiations fail.

Proposals to update our elderly tax exemption has been approved locally to help those on fixed incomes cope with the phase-out of the homestead exemption and legislation has been drafted to re-amortize our unfunded pension obligation to make it affordable within our five-year financial recovery plan.

Now comes the House Finance Committee approved budget for next year and it is time to assess our status in this enormous undertaking.

While the budget commission has done its job in formulating a plan that can succeed for Woonsocket, and the employees are working with us to make our staffing for services more affordable, and retirees are stepping up to accept reduced benefits, and the taxpayers are going to be significantly burdened with higher taxes and fees; how has our General Assembly acted in holding up their end of the bargain?

CHAPTER 45-9 Budget Commissions § 45-9-1 Declaration of policy and legal standard. – It shall be the policy of the state to provide a mechanism for the state to work with cities and towns undergoing financial distress that threatens the fiscal well-being, public safety and welfare of such cities and towns…”

  • ·       The needed $2.5 million supplemental tax bills necessary to support our FY2013 budget and essential to the base tax levy for FY2014 and into the future years as part of our five year recovery are languishing and appear to be dead.
  • ·       There has been no movement on the re-amortization of the pension shortfall.
  • ·       There has been no movement on the elderly tax credits to offset the impact of the reductions in the homestead exemption.
  • ·       The House Finance Committee budget proposal shorts our anticipated revenue by around $1 million.

So, what do we do now in anticipation of the real possibility that no solutions are provided by the General Assembly?

In light of the fact that there is no provision in the law for the city to exceed the tax levy cap, nor should we have to consider it, I submit what I consider to be the last possible solution within our authority as a budget commission.

Please have a calculation made of the across-the-board pay cuts to be applied to all classes of employees to take effect July 1 and placed into an enactment to be considered by the budget commission such that it will close the budget gap created by all of the failed or failing factors mentioned above and created by the dismal failure of the General Assembly and our local delegation to support the City of Woonsocket.

Failing that, I am prepared to vote to turn the city over to a receiver in accordance with the apparent wishes of the General Assembly and its leadership. We have done our job, they have failed us.

John F. Ward, CPA

President

Woonsocket City Council