Inflation and increased costs, the likelihood of a recession and pandemic-era federal funds drying up are just some of the challenges facing Providence and nearly every other city in America. And while fiscal responsibility and long-term planning aren’t always popular in the short term, I am confident that if we make tough but responsible choices today, we can avoid paying up big tomorrow.
This is why a few weeks ago, I proposed a budget that rebalances our tax structure and keeps funding critical city services for the residents, businesses and visitors who depend on them. When we started this budget process, we were faced with a $22 million deficit that will grow even larger if we do not make any structural changes. We were able to cut our dependence on federal funds in half and reduce nonessential expenditures to close this gap. Next year, there will be no federal funds to rely on.
So, we did what we felt was responsible and necessary – we proposed a residential tax rate increase to help cover the deficit, pay for current city services and keep Providence competitive with other Rhode Island communities. Even with this modest rate increase, the first in over a decade, Providence will have the 11th-lowest owner-occupied residential tax rate in the state of all 39 cities and towns. These funds will help us keep doing the things our residents and businesses care about most – removing graffiti, filling potholes, repairing sidewalks, and improving the quality of life in our city so that it is safe and welcoming to all.
I have also proposed lowering the commercial property tax rate, which stands as one of the highest in the country and has impacted our small businesses and renters in commercial buildings. By lowering the rate by $1.30 per $1,000, buildings of six or more units will see an average cost savings of $1,900 and our small businesses will feel some relief in tax bills that have significantly increased over recent years.
No one wants to raise taxes. But as mayor, it is my responsibility to create a budget that sets up Providence to succeed over the long term. Relying on one-time federal funds and irresponsibly low tax rates is not how we move forward. If we don’t rebalance our tax rates now, we will certainly be forced to do so next year and the year after. And the longer we wait, the more dramatic the action will have to be.
Even with these limitations, I am proud that this budget reflects the priorities of our community members. We are investing in our constituent services system, investing in education and after-school learning programs, cleaning our parks, supporting programs in our recreation centers, hiring more police, and tackling big issues on the local level such as the housing crisis.
This is the focused agenda Providence needs.
Brett P. Smiley is the mayor of Providence. He began his first term in January.
