The highlights for the fiscal 2018 budget for Providence, at least according to City Council, include no tax increase and the inclusion of a set-aside for a rainy day fund. While nice, neither of these address the single biggest issue the city faces – unfunded long-term liabilities.
For those who don’t remember, the numbers are mind boggling. At the end of fiscal 2016, Providence’s unfunded pension liability stood at $985 million. Based on this figure, the pension fund is 25.3 percent funded.
As for other post-employment benefits, the city has no assets set aside, and its most recent calculation in 2014 showed a $981 million unfunded liability.
At what point do these two numbers rise to the level of extraordinary action? When the city cannot meet its payroll and is forced into bankruptcy?
There are many who think that this last course of action is the only responsible one to take. That is not clear.
But what is clear is that not addressing the issue is irresponsible. City Council and Mayor Jorge O. Elorza need to develop a plan now before the city comes crashing down on itself.
