After 9-month delay, Providence City Council greenlights $511M FY21 budget

THE PROVIDENCE CITY COUNCIL on Thursday gave initial approval to a $511 million, amended fiscal year 2021 budget. / PBN FILE PHOTO/CHRIS BERGENHEIM

PROVIDENCE – The City Council on Thursday gave initial approval to a $511 million spending plan for fiscal year 2021 after a nine-month delay due to uncertainties caused by the COVID-19 pandemic.

The 9-3 vote came after several council members expressed concern with a lack of transparency in the city budget process. Not only did the amended spending plan receive preliminary approval from the city Finance Committee without public documents on the changes, but the only public hearing occurred last summer and only pertained to Mayor Jorge O. Elorza’s original $506.8 million budget proposal. Council members Helen Anthony, Nirva LaFortune and John Goncalves all cast votes in opposition. 

“It is critical for us as council leaders to ensure taxpayers understand decisions being made as it relates to the budget,” LaFortune said.

While Councilwoman Jo-Ann Ryan defended the process, noting the difficulties the pandemic has posed over the last year, Councilman David Salvatore said transparency has been a problem with the city budget process long before COVID-19. Salvatore called upon the city to release more detailed accounts of line item spending, as it has in previous years.

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The $4.1 million increase in net spending over what Elorza put forth last spring reflects several changes, the largest of which is the city’s $25.6 million share of federal coronavirus relief funds. This funding helped to offset pandemic-driven revenue losses such as collections from court fines and fees, parking meters and hotel taxes. As a whole, the hit to tax revenue was not as severe as feared – property tax revenue is on track to come in $2 million over the original allocation – thanks to a 94% collection rate, said Lawrence J. Mancini, the city’s chief financial officer.

The revenue boost helped to fund higher-than-anticipated expenses, including $4 million in overtime for police and fire and a $2.8 million bump for the newly approved, four-year police union contract. Efforts to limit hiring of open positions to only essential workers helped to cut class A salary costs by $2 million over the original proposal.

The new budget also adds $400,000 to create a “crisis diversionary program,” run by Family Service of Rhode Island to respond to city emergencies that do not require law enforcement. The funding comes in response to the nine hours of public testimony over the original budget proposal last summer in which many residents and advocacy groups called for reduced funding or alternative options to police presence, echoing national campaigns to defund the police.

The amended budget also adds a small $100,000 allocation to the city’s rainy day fund, bringing the balance to $15 million.

Key tenets of Elorza’s original spending plan still in place include the full $73.5 million payment to the city pension plan and a separate $130 million allocation to the Providence Public School District, which is under state control.

Tax rates, all of which remained unchanged from the prior year, were already set under a $358 million tax levy approved before the start of the fiscal year. The city delayed passing a full spending plan prior to the start of the fiscal year due to the pandemic, including its impact on tax collection and state aid.

Council President Sabina A. Matos, whose nomination as lieutenant governor was confirmed by the Senate Judiciary Committee earlier Thursday, as well as council members Kat Kerwin and Rachel Miller, were absent from the meeting.  

The spending plan requires a second vote before heading to Elorza for final approval.

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.

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