that his budget is unrealistic and instead proposing some grand plans — including selling the city’s water system and eliminating future tax breaks — to fix the city’s finances.

Mayor David N. Cicilline’s $625.9-million budget for the fiscal year beginning July 1 projects that the state will give Providence $7.5 million in direct state aid on top of the $7-million increase the city is slated to receive under the governor’s budget. It also banks on the General Assembly approving five new programs that would give Providence a total of $10.5 million in new revenue.

Lombardi said that these are “unrealizable expectations” and that the mayor should have known better, while noting that he has tried similar measures in the past.

“To put a budget of this kind together is foolhardy,” Lombardi said.
In the budget for the 2006 fiscal year, for instance, the mayor hoped to receive $11.3 million in additional state aid that was never realized, and, in that same year, the mayor banked on receiving $4.5 million in payments from the state for managing the Providence water system, a proposal that was rejected by the General Assembly. The mayor is again counting on that state payment in his proposed budget.

Lombardi said that when, as predicted, the General Assembly rejects these measures, it will force the council to enact a tax increase. “I can’t see how not. This budget was voodoo economics,” he said.

He says that there are measures the city could take to raise money.
It could minimize or eliminate future tax breaks given to developers. It could sell the Providence Water Supply Board, which would undoubtedly bring in hundreds of millions in cash.

It could modify its benefit structure with city employees, and it could switch to a biweekly payroll schedule, Lombardi said. He also promoted floating a pension obligation bond to pay off the debt to the city’s pension system.

“Everything needs to be put on the table,” he said.

Cicilline’s chief of administration, John Simmons, said that some of these ideas are already in motion — the pension obligation bond, for instance — and others, the city is trying to enact.

On selling the water board, he said that the city has “been in discussion on that for months, if not years. The question is, for what and to whom,” he said.

Any changes to employee benefits are subject to collective bargaining, which is under way, and he said that while switching to a biweekly payroll system wouldn’t hurt, it also wouldn’t save much.

Council Finance Chairman John J. Igliozzi agreed with some of Lombardi’s suggestions, but said that eliminating or publicly minimizing tax breaks is premature, and would rob the city of a valuable economic development tool.

“We shouldn’t shut the door on that economic development tool yet,” he said.

Igliozzi said that after several weeks of reviewing the mayor’s budget, he has found that there are places where the city can save — although it may have to focus on its core services and cut back on some popular but nonessential programs.

“I think the City of Providence… needs to refocus [its] efforts to going back to the basics, and providing all the basic things a city provides. Some of the boutique items in the budget that provide positive public relations for everybody may need to be looked at,” he said.

Some State Reps think it's a bad year to ask for more State aid:

Cicilline told this is a bad year to depend on state aid
01:00 AM EDT on Friday, May 4, 2007
By Daniel Barbarisi

Journal Staff Writer

PROVIDENCE — To balance his budget for the next fiscal year, Mayor David N. Cicilline counts on the General Assembly’s approving over $18 million in new financing for the city.

But the early word from members of Providence’s own delegation? Don’t count on it, Mayor.

“I commend the mayor for his advocacy, but surely we have told mayors across the state and town managers across the state to be extremely conservative in what they expect to get from the state this year,” said Rep. Steven M. Costantino, a Providence Democrat and chairman of the House Finance Committee.

Cicilline’s $625.9-million budget projects that the state will give Providence $7.5 million in direct state aid on top of the $7-million increase the city is slated to receive under the governor’s budget. It also banks on the Assembly’s approving five new programs that would give Providence a total of $10.5 million in new revenue.

But enabling legislation for several of the new programs that Cicilline is building his budget around has come before the Assembly in the past and met repeated defeat.

Cicilline’s budget, for instance, assumes that the state will pay Providence $5.2 million for owning and operating the Providence water-supply system, which is used by nearly 70 percent of the state.

But legislation to require that payment has been rejected repeatedly in recent years, and Providence Democrat and House Majority Leader Gordon Fox said that it’s always going to be hard to pass because it essentially taxes the rest of the state to find money for Providence.

“The mayor’s office knows what an uphill battle that will be,” Fox said. “The political reality on that one is that it’s very difficult to get people to vote against the interests of their constituents.”
Democratic Rep. David Segal of Providence said he expected that it would be a similarly tough fight this year.

“It will be tough. It will be very difficult,” he said.

Another Cicilline plan would impose a “franchise fee” on the state’s cable provider, Cox Communications, and spread the proceeds out among Rhode Island municipalities. Cicilline built $1.4 million into his budget from the plan. But Costantino said the Assembly had seen proposed bills dealing with that issue before — and never had the desire to require Cox to make the payment.

“That’s an old proposal, been kicking around for years,” he said. “We have not had the willingness — there’s never been a willingness to do it. I don’t know if this bill is different somehow.”

Fox said that the bill would mean a hard fight between two well-entrenched sides.

“They want it, Cox Communications opposes it, we’ll see if they could ever meet in the middle,” Fox said.

A third bill would eliminate the rental charges that cities and towns must pay for the use of fire hydrants, saving Providence $934,000. But Costantino said the Assembly had also seen that before, and rejected it, although its defeat may have been tied to other issues, he said.

Cicilline would also need legislative approval for plans to impose a transfer fee of $500 on the sale of residential property and $1,000 on the sale of commercial property, and for a plan to move the maintenance costs for fire-alarm call boxes from the city to private property owners. Together these bills account for an additional $3 million in revenue in Cicilline’s budget.

Costantino said the delegation has been very frank from the start with the mayor about not counting on much additional money from the Assembly this year. The state is facing its own budgetary problems.

“I think the mayor understands the situation the state is in. I don’t think we’ve been shy about it,” Costantino said.

Fox and Costantino said the delegation respected Cicilline and had an excellent relationship with him, and would fight for his bills and make sure they got full hearings.

But if they prove as tough to pass as expected, then the delegation will be coming to him soon to tell him that he needs to look in another direction, Fox said.

Cicilline, a former House member, said yesterday afternoon that he knew that some of these items would face significant opposition.

“I certainly recognize that this will be a very difficult budget year.

The General Assembly has some very difficult decisions to make,” he said.

But he said that the difference between this year and past years was that most of these bills — the water bill excluded — would bring in revenue for most cities and towns, and not just Providence. Because of that, they should have broader support, he said.

“What I think is different this year is that this is legislation that will actually assist all the cities and towns, and have statewide impact in terms of reducing the reliance on property taxes,” he said.
“It’s my hope that as all cities and towns are struggling with meeting the cost of local government, the assembly will look at this package” as another type of solution, Cicilline said.

Cicilline said that every other state has a cable “franchise fee,” and Rhode Island is lagging.

“That only happens in Rhode Island, and it shouldn’t be that way,” he said.

He also said that the $7.5 million in additional state aid was “not a number we just made up” — the figure comes directly from the governor’s five-year financial plan, he said.

But Cicilline also said he recognized that just because the aid is in the plan does not make it a reality. And if the state-aid numbers do not change, and some of his proposals prove as difficult to pass as his delegation predicts, “we will have to make further reductions in spending or try to generate additional revenue by raising taxes.”

“I think the mayor understands the situation the state is in. I don’t think we’ve been shy about it.”

Rep. Steven M. Costantino

“I certainly recognize that this will be a very difficult budget year. The General Assembly has some very difficult decisions to make.”

Mayor David N. Cicilline

But the reviews have been decidedly mixed: at least it looks like they range from "unrealistic" to "Unlikely":

Proposed city budget getting mixed reviews

01:00 AM EDT on Thursday, May 3, 2007

By Daniel Barbarisi

Journal Staff Writer

PROVIDENCE — Reaction to Mayor David N. Cicilline’s $635.9-million budget proposal for the next fiscal year was mixed, with some quarters saying they were happy that it did not greatly increase spending, and others worrying about its heavy reliance on state aid and General Assembly approval of new revenues.

“There’s a lot of ‘if’s’ there. But that’s been the case with every budget I’ve been involved with,” City Council President Peter S. Mancini said. “He’s hoping for more state aid, I don’t know how realistic that is.”

Cicilline on Tuesday presented his budget for the fiscal year beginning July 1. The budget would not raise taxes, and it would increase the city’s budget by only 2.6 percent, but it includes no money for salary increases for the more than 5,000 city employees. Contracts with all city employees will have expired by June 30, and at some point when new deals are reached, the city will need to finance the salary increases.

The budget plan counts on the General Assembly to increase state aid by an additional $7.5 million on top of the $7-million increase already included in the governor’s budget.

It also assumes that the General Assembly will pass a number of bills giving Providence $10.5 million in new revenue — for instance, a franchise fee imposed on the state’s cable-TV provider, and introduction of a flat state payment to Providence for operating the Providence water system.

If that state financing doesn’t come through, Mancini said, it may mean a tax increase, after all.

“If we don’t get the added revenue from either the state or the Assembly fees, maybe a slight increase might be necessary.”

The budget plan also includes savings generated by sweeping changes proposed for the city’s retiree pension plans. But Paul Doughty, president of Local 799 of the International Association of Fire Fighters, said that putting those savings in would be putting the cart before the horse — if the city tries to make changes by ordinance, it may end up locked in arbitration.

“To do it by ordinance is a mistake that’s going to end up costing them,” he said. “I don’t think it’s realistic.”

One group was happy with the budget projections — the School Department. The schools asked for a 3.5-percent increase, and Cicilline’s budget gave them 3 percent.

“Given the difficult financial environment that encompasses the entire state, the mayor’s budget clearly demonstrates his firm commitment to Providence schools and Realizing the Dream, our comprehensive plan for accelerating student achievement,” Supt. Donnie Evans said.

“While we have significant needs to support the strategies in Realizing the Dream, we’ll continue to operate in a cost-effective manner to stretch every dollar and reprioritize funds to maximize returns for student achievement. We will also continue to support the mayor in advocating for a fair and equitable funding formula from the state,” Evans said.

But another group did not think the increase it received was nearly enough. Cicilline earmarked $3.3 million for the Providence Public Library, a 10-percent jump over its current allocation.

The libraries released a statement today saying that the city’s allocation would mean layoffs and potentially a reduction in services across the library system, because it would take a $5-million contribution from the city to run the libraries at the current level of service.

“Mayor Cicilline’s $3.3-million allocation for library services in his proposed city budget indicates that he agrees with the library that there is a great value in providing municipal library services in the neighborhoods. It also indicates that the city understands it cannot fully fund the existing system and level of services,” the statement reads.

“We are hopeful the Providence city administration and City Council may ultimately decide to fully fund the current municipal system through a contract with PPL to operate and manage its municipal libraries. PPL had proposed a cost of approximately $5 million to continue to provide level services, including reinstating full services at Washington Park. If the city has less than this, then obviously it has some hard decisions to make regarding the level and scope of services. We already knew it would involve some reduction in staff,” it said.

But the city and the libraries are in the midst of separate negotiations on a permanent contract, so library financing may actually be decided in that forum, instead of during budget discussions.

The city’s Republican Party also weighed in.

City party Chairman David Talan said he liked Cicilline’s statements that when negotiating with the city’s teachers, he intended to push for a teachers contract that puts the children first — unlike, Talan said, the previous contract the administration negotiated.

“If he does that, good for him; if he doesn’t, he’ll be hearing from us,” Talan said.

And here is the report on the Mayor's budget presentation:

Cicilline’s budget holds line on taxes

01:00 AM EDT on Wednesday, May 2, 2007

By Daniel Barbarisi

Journal Staff Writer

Mayor David N. Cicilline yesterday announces his proposed budget for the fiscal year beginning July 1.

The Providence Journal / Ruben W. Perez Ruben W. Perez

PROVIDENCE — Mayor David N. Cicilline presented a $625.9-million city budget for the 2008 fiscal year that does not raise taxes and gives the schools nearly all the money they are asking for, but is built on the assumption that the General Assembly will give Providence more money and will allow the city to levy several new fees.

Cicilline said this budget reflects a new Providence of stability and government held in check.

“Our skyline has certainly changed some in the last four years, but that is nothing compared to our bottom line. From a financial perspective, Providence is a whole new city.”

The budget is only $15 million higher than the current fiscal year’s $610-million budget. But that is largely because Cicilline’s plan does not include financing for salary increases for any city employees next year, a number that could be in the tens of millions when more than 5,000 city and school employees are taken into account.

The contracts of every major city union will expire by July 1, and when new contracts are reached, the city will have to find money to pay for the salary increases that are sure to come with them. But there is no money set aside in the budget, and city officials refused to discuss where this money would come from.

“I would prefer not to answer that,” said John Simmons, the city’s chief of administration, citing a desire not to tip his hand in negotiations with the city’s four major public employee unions.

The budget also banks on the General Assembly approving several new fees, and on additional state aid on top of what the governor’s budget recommends. Almost half of the revenue increases Providence is counting on to balance its budget require Assembly action.

Cicilline presented his plan last night in a budget address that was only partially about the budget itself — much of it attacked state leadership and dealt with state economic policy and education financing formulas.

“As you know, I have tried to ring the alarm bell for several years now that Rhode Island critically under-funds its schools, despite the increased effort of Providence and other cities and towns,” Cicilline said, sounding familiar themes about the need to rethink education financing formulas, and the danger of freezing state taxes and passing the tax burden on to cities and towns.

In his address, Cicilline boasted that the city’s tax rate would actually drop, perhaps giving the impression that residents would be paying less in taxes. That is not the case. Because of the ongoing property revaluation, the tax rate will be reduced to balance out the rise in property values in the three years since the last property revaluation. But the amount that most citizens pay in taxes will remain the same.

This budget relies far less on one-time revenues than does the current budget. In the current fiscal year, the city sold several buildings to generate revenue, ending up with $23 million in one-time income sources. This year, it counts on only $10 million in one-time revenue.

But it does count on the General Assembly approving a number of new revenue sources for Providence, totaling $10.5 million. It also expects that the state will approve aid on top of the $7 million in the governor’s budget, increasing Providence’s share by an additional $7.5 million.

The budget assumes that the legislature will allow Providence to charge a new fee of $500 to anyone who sells residential property, and $1,000 for commercial property. Half of the money would go into an affordable-housing fund, and the other half to help balance the budget — $2.1 million worth.

Cicilline also proposes imposing a franchise fee on Cox Communications, the cable provider serving Rhode Island. The city says that Cox brings in $300 million in receipts from Rhode Island, and that the state should charge a franchise fee that would be split among every Rhode Island city and town. Providence would get $1.4 million.

The city also wants the state to pay Providence $5.1 million for owning and operating the Providence Water system, which is used by 70 percent of the state.

On the schools, the school department asked for a 3.5-percent increase to its $311-million allocation. Cicilline said he will give them 3 percent, which would increase the city’s payment by $9 million.

Cicilline also committed to giving the Providence Public Library $3.3 million, an increase of 10 percent over its current allocation, but less than the $5 million library officials said was needed.

He also noted that the amount of new development in Providence in recent years has brought more than $75 million in new taxable property onto the rolls this year — increasing tax revenue by $2.5 million. The budget also reflects savings from pension reforms Cicilline hopes to enact in the next few months.

The City Council will now spend the next two months reviewing the budget, and normally passes its modified version close to the July 1 start of the fiscal year.

You be the judge.