PROVIDENCE — Decision-makers are beginning to digest the budget proposed by Mayor David N. Cicilline last week and they are raising concerns that the budget is balanced on proposals that might not generate the kind of cash the mayor predicts.

The $636.3-million budget Mayor David N. Cicilline proposed last week represents a 3-percent increase over the current fiscal year’s $616.7 million budget and includes a 3.75-percent increase on the tax levy.

The budget covers the fiscal year starting July 1 and does not include money for salary increases for any of the city’s unionized employees, all of which are working under expired contracts.

Cicilline’s budget counts on raising cash through fines on trash collection and fees on sewer lines and fire hydrants, among other measures.

But some of these proposals have been met with raised eyebrows and doubts that they will generate as much revenue as the mayor expects.

“We can’t hope for things. We’ve got to come up with legitimate proposals that we can actually do,” said council Finance Committee Chairman John J. Igliozzi.

Cicilline’s proposed 3.75-percent increase to the tax levy will not equal an exact 3.75-percent increase in the tax rate. The levy represents the total amount of taxable property in the city and has not yet been calculated for the coming 2009 fiscal year.

But based on the 2008 levy figures, rough tax-rate increases can be calculated. Cicilline’s 3.75-percent increase would raise the residential tax rate from $22.84 per $1,000 dollar of assessed valuation to $23.76 per $1,000, minus a 50-percent reduction from the city’s homestead exemption.

Those figures would change if the City Council passes a working family tax credit also proposed in Cicilline’s budget. That would increase the size of the homestead exemption for property owners who own single-family homes worth less than $200,000 and those who own multifamily, owner-occupied properties valued at under $250,000. If those roughly 6,400 property owners receive the tax credit, it would be partially balanced by a slight increase to the rates for the rest of the city, to $23.91 per $1,000.

Those figures would all change slightly once the tax levy is computed and set for the next fiscal year, usually in July.

Igliozzi said the working family credit is an interesting proposal.

“I’m intrigued by the idea. Potentially this levels the playing field a little and gives tax relief to the individuals in the city who need it the most,” he said.

The city is also looking to introduce fees on fire hydrants and sewer lines, which would allow Providence to spread the cost of those services to the universities and hospitals as well, rather than just on the property taxpayers. Providence is counting on $2 million in its budget from the two items.

The sewer line fees can be enacted by the council, but the hydrant fee must be approved by the General Assembly, which has rejected it many times before. Igliozzi had his doubts that this year would be any different.

“The city has been submitting that legislation for 20 years. They haven’t budged in 20 years. I don’t see why they would now,” Igliozzi said.

And council Majority Leader Terrence M. Hassett was hesitant to add new fees on top of the property tax increase. “We’re already paying high taxes. I want to avoid any additional fees,” he said.

The lion’s share of the skepticism was reserved for Cicilline’s plan to fine residents who throw out more trash than their 95-gallon Big Green trash receptacles can handle.

Cicilline argues that Providence, with a state-worst recycling rate of 10.6 percent, is suffering from heavy tipping fees at the state landfill and damaging the environment when it should be leading the way in recycling. To change residents’ behavior, he wants to introduce fines.

But council leaders scoffed at the financial windfall he budgeted from just a half-year of the fines: $5.5 million.

“$5.5 million? You’re going to be lucky if you get half a million,” Hassett said.

The budget also includes assumptions that the city would be able to convince hospitals in Providence to pay for some of the services the city provides, as the universities now do.

If the council reduces those funding assumptions, it will have to make serious cuts to balance the changes. Igliozzi said that everything is on the table, even layoffs.

The budget makes several consolidations among city and school departments, including merging the police watchdog agency, the Providence External Review Authority, with the Human Relations Commission, the municipal court staff with the housing court staff, and some school and city purchasing and human resource operations.

“Difficult decisions had to be made. We didn’t want to have to make those decisions,” said Cicilline’s chief of administration, Richard I. Kerbel.

But the council seemed to support the consolidations.

In Cicilline’s budget, the School Department would see an increase of $5.6 million, to $319.9 million, which school officials say is $6.7 million less than they need to pay for all their programs.

Cicilline plans to make up some of that money by restructuring the city’s crossing guard program, bringing the costs in line with what the city would pay if it hired a private firm to run guard services — or actually hiring a firm if the city can’t negotiate changes with the union representing the crossing guards.

“If we can’t do that, then the alternative is to replace them with a private contractor,” Cicilline said.

As it stands now, the guards are divided into two major salary and benefit groups: those hired before April 2005 and those hired after.

Cicilline negotiated a new contract with the guards in 2005 that cut the salary and benefit levels extensively. The roughly 40 guards hired after April 2005 make $12 an hour, can’t collect unemployment over the summer, must work four hours daily, don’t get paid holidays and can’t claim family health benefits. The roughly 70 guards who were hired before 2005 are paid $20 hourly and receive those perks.

The guards are represented by Local 1033 of the Laborers International Union of North America. Donald S. Iannazzi, business manager of the union, said he and Cicilline discussed the mayor’s proposals before the mayor’s budget address last week.

“I told the mayor that we will meet and confer about that or any other issue that he wants to meet and confer about,” he said.

He said the union is ready to make alterations that would mean a savings of 22 percent on the city’s cost of employing the nearly 120 crossing guards.

But Iannazzi said that he wants to deal with Cicilline himself — not the mayor’s staff.

“There is nobody in the leadership position in the city or in the School Department who can take something beyond conception and bring it to fruition,” Iannazzi said.

“We could immediately take action that would result in a 22-percent savings. My concern is that there’s nobody to address it with. Unfortunately, labor relations in Providence are at an all-time low,” he said.

Iannazzi said that he’s not worried that this will become a “Cranston situation,” where the guards were laid off in 2003, leading to a series of messy court battles that are still not settled.

And he said he’s not particularly worried about Cicilline’s statements that the mayor will make major layoffs among the guards, when Cicilline has recently granted some of his top personnel, such as the police chief and the school superintendent, contractually mandated raises. “I’m not overly concerned with sound bites when the city is handing out raises,” Iannazzi said.

Iannazzi said he will meet with the crossing guards next week and discuss what comes next.

“We are not at a point of panic. There’s nothing happening tomorrow. We hope that the mayor can find time to get personally engaged, because then we can do some business,” Iannazzi said.

dbarbari@projo.com