Elorza proposes $745M fiscal 2019 budget for Providence

PROVIDENCE – Holding the line on taxes, Providence Mayor Jorge O. Elorza on Tuesday proposed increasing the city and school budget 1.1 percent to $745 million for the upcoming fiscal year.

Elorza, who took office in 2015, unveiled the fiscal 2019 budget proposal at the Providence City Council. The budget, which looks largely similar to the current budget, doesn’t raise taxes for the fourth consecutive year.

“We’re thinking big about Providence’s potential in the new economy,” Elorza said.

Total city revenue is expected to increase $8.2 million to $745 million thanks largely to a projected $6 million boost in state aid to education, according to the budget. City revenue alone is expected to increase about $2.1 million thanks to department fees, licenses and permits and about $1.8 million more in property taxes.

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Elorza said he plans to pay $7 million toward the city’s cumulative deficit before the end of the current fiscal year. He also proposed moving $3.6 million to the city’s general fund for fiscal 2019, which exceeds the $3.5 million allocated during fiscal 2018, according to the city.

The city budget calls for level funding for schools, but Elorza has proposed issuing $20 million in bonds through the Providence Public Building Authority to pay for school infrastructure improvements. The budget shows about $3.3 million in debt coming off the books. Debt payments are expected to total $61.8 million in fiscal 2019.

State lawmakers are currently mulling separately whether to approve a $250 million bond referendum for school repairs proposed by Gov. Gina M. Raimondo. The state funds, if approved by lawmakers and voters, could help leverage how much the city pays toward school repairs.

“Three and a half years ago, we stood together and made a commitment to our children. Since then, we’ve invested in a cradle-to-career approach so that our kids are on the path to reach middle class by middle age,” Elorza said.

The proposed budget, which now goes to the City Council for consideration, does not include much in terms of economic-development-related investments, although Elorza did note the widespread development seen throughout the city. He said he’s committed to improving the way business is done at City Hall through streamlining municipal services.

The city’s finances continue to be dragged down by unfunded pension and other retirement benefits, including health insurance. The unfunded pension obligations for city workers exceeded $1 billion during fiscal 2017, which demands more money each year from the operating budget.

A recent report on the city’s pension system showed an annual contribution of $78 million to the pension system could increase to $116 million in the next decade.

“The future impacts on city services will cause real harm to peoples’ lives,” according to the report.

In his budget, Elorza highlighted the fact that the city has made 100 percent of its required pension payment for the fourth consecutive year, an area of finance where some of his predecessors struggled. But it’s clear the current and future costs are making it difficult for city officials to spend money on other initiatives.

“The unfunded pension liability is Providence’s version of the global warming crisis, an existential threat looming on the medium-term horizon that becomes more difficult to solve with each successive year of inaction,” according to the report.

The report was done by a group of city council members and Melissa Malone, Elorza’s outgoing chief operating officer.

Despite the fiscal challenges, Elorza is nonetheless bullish about the city’s future, and is proposing level funding in various community and art-related programs, including $350,000 for PVDFest, an arts festival he started four years ago.

“While some people are coming for our incredible restaurants or our world-class architecture, thousands are coming this June for our fourth year of PVDFest,” Elorza said. “As our signature arts festival, PVDFest transforms downtown and converts streets into stages, public space into public art and it fills the ordinary with spectacle and wonder.”

­Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman.