PROVIDENCE – Mayor David N. Cicilline today laid out his plan for closing a $17 million hole in the city’s finances for the current fiscal year, which ends June 30.
In a news release that blamed the budget crisis on “the economic downturn and lack of sufficient funding from the state,” Cicilline’s office outlined a series of wage and benefit cuts that have been agreed to by the Laborers International Union of North America Local 1033, the largest union of city employees, and called on other unions to follow suit.
The mayor said he will send a revised budget for 2008-09 to the City Council on Friday, and said it would include the following provisions to balance the budget:
• Increase city employees’ health insurance co-pays by as much as 20 percent.
• Decrease annual cost-of-living adjustments for city pensions.
• Increase the retirement age for city employees to qualify for a pension.
• Reduce the maximum disability allowance for all city employees.
• Eliminate some vacation days.
• Eliminate 30 public safety positions.
The revised budget also will use money from the city’s public safety severance and rainy day funds, Cicilline’s office said. In order to save money, the mayor said he has ordered non-union employees to take furlough days and increased their health insurance co-pays to 20 percent as well.
In a shot across the bow to other city unions, Cicilline declared that “if additional savings are not implemented immediately, the city will be incapable of meeting its financial obligations in four to six months.” He said he has “been involved in discussions for several weeks with our City unions and they, too, are aware of the stakes.”
The mayor’s office did not specify how much of the savings outlined in his revised budget depend on union givebacks that have not yet been negotiated.
But Cicilline did say, “Unless we implement these structural reforms in every contract, every liquid asset would be spent down, our bond rating would be severely downgraded and we would be unable to meet payroll.”
The mayor’s office said Local 1033 had agreed to the following concessions:
• Immediate wage freeze.
• Increase union members’ health insurance up to 15 percent on a sliding scale, with the smallest increase for low-wage workers.
• Increase the retirement age and the required length of service for city employees to qualify for a pension.
• Reduce the disability pension allowance.
• Eliminate one paid holiday.
“The men and women of Local 1033 work incredibly hard to provide quality service to the residents of this city and they recognize that these are difficult financial times and are willing to do their part,” Donald Iannazzi, Local 1033’s business manager, said in a statement. “This is about protecting jobs and ensuring that the City of Providence is in the strongest financial position to weather one of the most challenging economic times in recent history.”
The mayor also praised Local 1033 for its cooperation.
“I want to thank the leadership of Local 1033 and the men and women who plow the streets, clean the parks and serve as clerks in City offices for doing their part so the residents they serve have a government they can afford,” Cicilline said. “They’ve taken this step for one reason, because they believe that if the residents of Providence are sacrificing in these tough economic times, they have an obligation to meet them halfway and sacrifice too.”
For more information on Providence’s city government, visit ProvidenceRI.com.
