PROVIDENCE – City residents should expect a tax hike next year, following a multimillion- dollar school-funding settlement with the state education department, according to Mayor Brett P. Smiley.
“I don’t have any choice,” Smiley told WPRI-TV CBS 12.
Smiley won’t decide on the size of the tax hike he’ll recommend until a citywide property revaluation that’s wrapping up this month is completed. Property revaluations happen every three years. The last one led to significant increases in property values in the city’s West End and South Providence neighborhoods.
Smiley says he’ll also consider some spending cuts in the budget proposal he’ll send to the City Council early next spring.
“We’re going to try to balance the burden across various parties, including city government,” Smiley told WPRI-TV. “There will certainly be some other revenue things, like fines and fees, that we’re going to look for ways to generate additional revenue that doesn’t burden homeowners or renters.”
The city’s settlement with the state education department, which oversees Providence public schools, included additional payments totaling $15 million over this fiscal year and next.
An initial payment of $4 million, which covers the city school district’s deficit for fiscal 2024, has already been made. The remaining $11 million will be paid in monthly installments.
Smiley has also proposed using $4.4 million in remaining American Rescue Plan Act money to help pay for the settlement, including the last $3 million from the city’s COVID-19 Equities reparations program adopted in 2022.