POSTED 12:05 p.m. ET
PROVIDENCE -- The capital city faces a $58.9 million budget deficit and
a $526 million unfunded pension liability that threatens to bankrupt the
city within 10 years unless drastic steps are taken, Mayor David N.
Cicilline said this morning.
The mayor pulled no punches at a press conference held to mark his first
100 days in office.
"This city's history is one of budgeting gimmicks, phony savings, lack
of real budgetary controls and fiscal discipline, and a pattern of
wasteful spending," he said. "We are now paying the price for
irresponsible management decisions of the past."
Cicilline, who submits his fiscal 2004 budget next month, pledged to
address the budget woes that have built up over years.
He outlined an action plan that will try to increase revenues through
such steps as increased parking ticket collections, an increased meal
tax and an increased share of the hotel tax.
The mayor said he is working to improve the efficiency of state
government, seeking concessions from union leaders and still working
with colleges to collect payments in lieu of taxes.
He pledged to avoid raising property taxes until he's exhausted every
other effort to solve the city's fiscal problems.
"That will be the very last place we go," Cicilline said. "The residents
of this city have paid high rates too long."
As examples of "one-time budget gimmicks," he cited the "selling street
lights to plug an $8 million budget hole, and then leasing the lights
back; or selling the Port of Providence as a $16 million budget Bandaid
-- and leasing it back for the same price plus interest."
To help address the problem, Cicilline has hired Public Financial
Management, a group that specializes in solving municipal financial
problems. The firm has worked with Cicilline's staff to develop a plan
improve the city's finances.
"The action plan is my effort to provide leadership, to manage the
resources of the city responsibly, to promote transparency in all our
work, and to regain the trust of the taxpayers and residents of the
city," Cicilline said.
"This is the single most critical area of our work -- city finances. It
is on the success of our work in this arena that all the city's programs
and activities depend," he said.
Here are some of the plan's proposals to raise revenues. Some of
Cicilline's plans would require legislative approval.
-- An increase from 6 to 13 percent in the tax on Providence hotels,
raising $584,000 annually.
-- Cameras that would photograph red light violators, enabling the city
to send them traffic citations and raising an estimated $1.9 million in
six months.
-- Parking permits and improved collection of ticket violations, which
would generate an additional $3 million in revenue.
-- Advertising fees on trash receptacles and vehicles that would raise
$80,000.
Cicilline says he has already saved money with a more efficient city
government. For example, the city is saving $400,000 by instituing the
use of purhase orders.
He has also instructed his department heads to review their operations
and suggest ways for cutting costs.
"Everyone realizes that this budget gap is everyone's responsibility and
cannot be closed without everyone's help," he said.
