November 29, 2011

Economy

Whoops! Providence Budget Still Under Water

Patrick Laverty

Well, I don't like to say "I told you so" but an article in GoLocalProv yesterday about the state of Providence's budget wasn't really a surprise. According to the article, almost halfway through the current budget year, the budget still is not only not balanced, but it's about $24 million in the red.

Some of the reasons:

Savings of up to $6 million hinged on 30 officers taking advantage of an early retirement incentive. Only 16 did.
We asked about this one back in June when the agreement was made to avoid the layoffs. What if the department can't find 30 officers to retire? What then? Will there be layoffs now? Should there have been a clause in the agreement that if the 30 retirements weren't met that there'd be automatic layoffs to meet the expected numbers? Was this even considered?
Taveras hoped to save $11 million by switching retirees over to Medicare. But most of those savings got wiped out when the federal government slapped the city with an $8 million penalty
Wait, what? You figure out that you can switch your retirees over to the federal Medicare plan for the cost savings and you missed that part about the penalty? I'm sorry, but if I cost my boss $8 million, I'm not sure I'd still have a job. Plus, there's this:
Worse yet, it is not a one-time fee. Instead, the penalty will be assessed annually for the foreseeable future.
I guess the only silver lining in this is the city won't expect an $11 million savings each year, now they know to only expect a $3 million savings.

Lastly, am I the only one who remembers then-Mayor, then-Congressional candidate David Cicilline telling us that he was leaving Providence in excellent financial shape? Hmm, well there's also this:

The city ended the 2011 fiscal year in June with a higher-than-expected $4.9 million deficit, city records show—and that is not counting approximately $30 million that was borrowed to help close the gap.
$30 million to close a gap in a city that is in excellent financial shape?

I do wonder if Mayor Taveras referred to the situation he inherited as a "Category 5" hurricane, only because we don't have a Category 6.

3:47 PM | TrackBack (0)
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Idiocy, thy name is "progressive".

Posted by: Tommy Cranston at November 29, 2011 6:45 PM

Providence and my own city of Pawtucket are in REALLY BAD shape. I'm not sure exactly how things will go over the next few years.

I've heard that things in PVD are getting crazy to the point where the real story 'behind the scenes' is a horror show.

Example (and totally hearsay):

We all know that the city workers made concessions to avoid layoffs, but now they don't have enough money for supplies. Basically, what's the point of 'keeping everyone on' in DPW if they don't have asphalt to pour?

It's a similar story in the schools, there was school consolidation, but no staff reductions. Now we have a ridiculous student:teacher ratio, which SHOULD mean small classes, but management of scheduling is so bad that we have overcrowded classrooms AND idle teachers at the same time. Also, the facilities are falling apart and supplies are dwindling.

Add to that the latest Hummel Report that basically shows that most of the new businesses we've seen sprout up here in the past few years have actually been running on taxpayer-funded, staggeringly irresponsible loans.

And why the heck is there some big-but-totally-ineffective 'viral' anti-tobacco billboard/web campaign while Rome is burning?

I really think Taveras should bring Buddy in as a consultant. Even if he has to do it quietly.

Between the bad loans, the federal money creating perverse incentives, the votes tied to city workers, and the 'youth' of the faces in the Mayor's office, I think we're in trouble. It's time for Mr. Mayor to sit down and decide on a list of priorities (even if it's just roads, sidewalks, and schools), then focus on them until they're moving in the right direction. Put the other stuff aside, it's distracting.

Posted by: mangeek at November 29, 2011 7:08 PM

"I'm not sure exactly how things will go over the next few years"

I am.

Posted by: Tommy Cranston at November 30, 2011 9:05 AM
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