PROVIDENCE – When Providence Mayor Angel Taveras delivered his State of the City address this time last year, the city was $22 million short of closing a $110 million deficit, and it needed to find a way to spend less on its unsustainable pension system, and draw more from the city’s large, tax-exempt institutions.
“As I stood before you on Feb. 13, 2012, Providence was running out of cash, and running out of time,” Taveras said during this year’s address, held Tuesday evening (an embargoed copy of the text was released prior to the event).
“Today it is my privilege to deliver a much more hopeful report on the state of our city: Providence is recovering,” he said.
Taveras said the city’s $110 million structural deficit has been all but eliminated, and he expects to end 2013 with a balanced budget. One of the reasons for that result is that after months of actuarial analysis, public testimony, and negotiations with unions and retirees, the city has arrived at a post-employment benefit reform plan that will cap pensions, eliminate 5 and 6 percent compounded cost of living allowances, and move retirees older than 65 into Medicare. Tavares said these changes will reduce Providence’s unfunded liability by an estimated $200 million.
And, he reported, the city’s major tax-exempt institutions have committed more than $48 million in new contributions to the city during the next 11 years. Taveras expressed gratitude to Brown University, Care New England, CharterCare, Johnson & Wales University, Lifespan, Providence College and Rhode Island School of Design, and thanked the General Assembly and Gov. Lincoln D. Chafee for their support in helping to reach agreements with these institutions.
“Make no mistake; we expect to face challenges in the months ahead. But every day, I am reminded that Providence is truly the beating heart of our state,” Taveras said.
“Signs of hope,” he added, are on the horizon, noting a reduced unemployment rate and a decline in foreclosure filings.
“We are already seeing signs of economic recovery. Projects representing tens of millions of investment are underway in the heart of our capital city, including the revival of the historic Arcade – America’s first indoor mall – into a mixed-use development of retail shops and micro-lofts; a project transforming the former Providence Gas buildings into residences; Johnson & Wales University’s construction of a new parking garage and physician assistant building; and the creation of six new retail shops on the ground floor of the Biltmore Garage on Washington Street,” Tavares said.
Also addressed in Tuesday’s address was the $40 million roads bond that was approved in November with nearly 90 percent support. The city will move forward with repaving more than 62 miles of roadway in the coming months and years, Tavares said. He also mentioned the city’s efforts to bring cargo cranes into Providence, a piece of the puzzle that he hopes will turn Providence’s working waterfront into a hub of the state’s economy.