It isn’t easy doing business in East Providence, says Allan Gilmore. He should know: His business has been there for 75 years.
He owns Gilmore’s Flower Shop, a family-operated concern on Taunton Avenue, opened by his father during the Great Depression in 1936. “City Hall has never had open arms when it comes to business. The problem in my case is the continuous increase of taxes puts a burden on my net profit at the end of the year. Any increase in my business goes to paying higher taxes,” he said. As an example, Gilmore said his parking lot was once assessed at $90,000. Within a three-year period that figure escalated to $214,000 last year.
Things are so bad that he’s started to hear rumors about some businesses investigating a five-year strategy to leave. “You hear about it in social circles, of people thinking of selling their business and property to get out of, not only East Providence, but the state,” he said.
With that in mind, he welcomes the financial commission appointed by Gov. Lincoln D. Chafee that’s taken on the task to straighten out the city’s budget and finances. “Someone has to come in here that isn’t obligated to special interests or by campaign promises and do what’s right. Tough decisions have to be made and no one in this city is willing to do it,” he said.
The city’s fiscal plight, which includes debt of more than $10 million in fiscal 2012, has clearly left many in the business community worried about their financial futures. But Gilmore and other business owners are hoping the commission can help the city follow the lead of Pawtucket and Central Falls, two other financially ailing communities working through budget woes.
In December, Moody’s downgraded East Providence’s general-obligation bond rating from Baa1 to Ba1, affecting approximately $22.4 million in outstanding debt. The downgrade reflects the recent appointment of a fiscal overseer and the budget commission by the state.
Conversely in Pawtucket, its neighbor to the north, Fitch Ratings upgraded the city’s outlook from “negative” to “stable,” last month, welcome news for city officials and business leaders.
Although the bond-ratings company did not raise the BBB- rating for the city’s $20 million in outstanding general-obligation bonds, Pawtucket is expected to have an operating surplus this fiscal year.
Like Fitch, Moody’s, another bond-rating company, had also given the city negative outlooks over the last two years. But now, with an affirmed bond rating and a stable outlook, city officials, businesses and community organizations hope it’s a sign of better days.
Estate and Corporate Income Taxes are changing next year, and business owners and executives should know the details. The PBN Summit on November 6th will provide those details and more - including how much Obamacare's Employer Mandate could cost.
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