Elorza proposes $773M FY20 budget, denounces ‘extremism’ in national politics

PROVIDENCE – Mayor Jorge O. Elorza on Tuesday announced a proposed $772.6 million fiscal 2020 city budget, with a 3.2% spending increase above the city’s current $748.7 million annual budget.

Elorza used the occasion to denounce the state of national politics, which he said has increasingly left cities such as Providence to fend for themselves.

“As municipal leaders, we don’t have the luxury to pontificate or point partisan fingers like the pundits on TV,” the mayor said in a transcript of his budget speech. “Our job is to solve problems regardless of where they come from. Whether it’s immigration, infrastructure, substance abuse, or otherwise, we at the local level suffer the consequences of broken systems, so it doesn’t help to complain, point fingers, or wish for a different world. Instead, we roll up our sleeves, dive into the challenges and get stuff done for our constituents.

“We’ve all watched our national politics become a sideshow where a lot is said and little is done,” the mayor continued. “We hear cries of young people who feel disconnected and of seniors who feel isolated. We hear the cries of people of color who feel forgotten and of a working class that feels left behind. Our sense of community is being threatened.”

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The mayor’s budget proposal includes more money for city infrastructure projects, the city’s employee pension fund, public school programs, the city’s “rainy day” reserve fund, and numerous smaller spending increases for various social service-oriented initiatives.

Elorza’s plan also calls for double-digit decreases in the city’s tax rates on residential properties, though the decreases are being proposed to keep tax bills relatively stable amid generally higher property values being set by the city’s latest property valuation. The mayor’s plan calls for no change to the city’s commercial and tangible tax rates.

“The increase in commercial value [from the new property valuation] is not as significant as [increases in residential property values from the valuation] and it was deemed unnecessary to adjust [the commercial] rate this year,” Elorza spokeswoman Emily Crowell explained Thursday.

“Commercial property is subject to long-term leases, so there is very little change in commercial values from one year to the next,” she added. “Additionally, if the commercial rate had been adjusted [downward], that would potentially shift the burden to other categories of real estate that are already [seeing] increases in values.”

Overall, the city would collect an additional $12.2 million in tax revenue in fiscal 2020, which begins July 1, compared with the current fiscal year, for a 4% increase, according to the mayor’s staff, who briefed the news media on the mayor’s proposal prior to his budget speech. The presentation did not include a department-by-department breakdown of the budget.

The mayor’s plan calls for tax rates of $15.35 per $1,000 of valuation for owner-occupied dwellings (an 18.3% decrease) and $24.56 per $1,000 of valuation for non-owner-occupied dwellings (a 23.1% decrease). The tax rate on commercial properties would stay the same at $36.70 per $1,000, as would the tax rate on tangible property at $55.80 per $1,000.

The city is committed to helping startup companies and small-business owners, according to Elorza.

“Our city believes in this approach and we also believe in investing directly in people,” the mayor said in the transcript. “Initiatives such as PVD Self Employment and the Design Catalyst program are supporting our entrepreneurs that then repay their community by expanding their businesses and hiring our residents.”

The mayor’s proposed budget calls for a net increase of 20 city employee positions, according to Elorza’s staff. However, figures were not immediately available on how his proposed budget would impact staffing levels in specific departments, such as police and fire.

The mayor’s budget proposal is expected to go before the City Council this week for initial review. The proposed $772.6 million spending package consists of a municipal budget of about $508.5 million and a school budget of about $394.2 million. That includes a $130 million city contribution to the School Department, an increase of $1.5 million from the current budget.

The city’s school budget contribution includes $659,000 for technology, down from $1.7 million in the current budget, as the School Department has achieved a “1-to-1 ratio” between students and Chromebook laptop computers. The school contribution also includes a new expenditure of $750,000 to increase the number of prekindergarten classrooms in Providence to expand access to early-learning programs, and an additional $200,000 for the city’s summer jobs and internships program for Providence youths.

The mayor’s school package includes $50,000 for a pilot program to install washing machines in schools so students can wash their dirty laundry – a step to mitigate chronic student absenteeism.

“It’s no secret that 85% of our kids qualify for free or reduced lunch. But in this country, being poor should not be a life sentence to remain poor,” Elorza said. “We want our kids to have the same opportunities as kids from upper-middle class families; we also want our kids to go to the best preschools, the best summer programs, and have the best internships.”

The mayor’s budget calls for borrowing $70 million in fiscal 2020 and fiscal 2021 for projects in the city’s five-year capital improvements program. That would be an increase from $58.5 million for such projects in fiscal 2018 and fiscal 2019.

“Great infrastructure draws people together and this budget helps us build the great community that we all want,” Elorza said. “From traditional roads to off-road trails; from public buildings to public parks; and from engaging artworks to transit networks.”

The mayor’s budget calls for setting aside $86.7 million in fiscal 2020 for payment into the city’s employee pension system. That would be an increase from about $83.4 million for the current fiscal year. It would be the fifth consecutive year the city would meet 100% of its pension obligation payments, according to the mayor’s office.

The proposed budget calls for nearly $3.8 million for the city’s “rainy day” fund. That would be an increase from more than $3.6 million for the current fiscal year.

In addition, the mayor’s spending package calls for $125,000 for a new marketing campaign, promoting Providence as a regional destination.

“This budget calls for a regional campaign to change Rhode Islanders’ impression of their capital city,” the mayor said. “Let’s invite them to visit our neighborhoods, support our local businesses, and see all that our amazing city has to offer.”

In his speech, the mayor said Providence has seen “significant” increases in property values and rents in every part of the city in the past three years. That has included the renovation of more than 500 abandoned houses citywide over the past five years.

Elorza said cities such as Providence must take care of themselves amid a faltering federal government.

“I, too, am concerned about partisanship, and now extremism, in national politics,” he said. “But as Washington has descended deeper into disarray, cities throughout the country have stepped up to fill the leadership void. Today, almost all of the innovative, forward-thinking work in government is happening at the local level.”

After the mayor’s speech, City Council President Sabina Matos issued a statement, saying the council’s Committee on Finance will review “every aspect” of Elorza’s proposed budget in the coming weeks, including its potential impacts on “our constituents from tax levies to services provided.”

She said: “I look forward to working with Mayor Elorza and our teams to come up with a budget that addresses the serious issues we face head-on. I hope together we can address the concerns of our constituents, including infrastructure needs; and further economic development across the city; and other quality-of-life issues that affect every corner of Providence.”

Scott Blake is PBN staff writer. Email him at Blake@PBN.com.