Property Tax Rates Don't Matter

Reading this article, I thought it worth reminding everybody once again that, given the way local budgeting is done, property tax rates don't really matter:

After voting to take court action against Mayor Charles A. Lombardi's vetoes, the Town Council changed its tune Wednesday night and voted unanimously to set the tax rate for residential property at $24.15 per $1,000 of assessed value.

This was the same rate proposed by Lombardi. For his part, he rescinded his previous veto of the $23.35 tax rate voted by the Town Council, showing a measure of deference to the council’s authority as the town’s tax-setting authority.

The tax rates might matter if cities and towns assessed the value of the property in their towns, applied the tax rate to it, and then figured out how much money they have to run local government. That's not how it works. In practice, the government calculates how much it needs, typically based on projected increases from the previous year, divides that number by the total value of property in the town, and figures out what the rate turns out to be per $1,000 of value.

Assuming that everybody's property increases or decreases at roughly the same rate, the actual dollar amount that every household pays in taxes will increase by the same percentage that the town's budget increases. In other words, it's more of an ownership fee based on the portion of the town's value that the family owns.

One consequence of this method is that you can't really compare property taxes from town to town, because a town with lower property values will have higher tax rates. Another, more central, consequence is that the town has no real incentive to attract additional property owners or try to get homeowners to invest in their own homes.

Democratic Sweep in North Providence

Democrats won all three seats in the North Providence special election for town council (AP report via WJAR-TV (NBC 10) available here). A quick perusal of the campaign finance reports reveals that...

• Not only Democrats, but establishment Democrats had a good night. Dino Autiello, winner in District 3, received $1500 in total from 4 Democratic State Reps (Arthur Corvese, Dominick Ruggerio, Gregory Schadone, and John Tassoni). He also received $1000 each from the "RI Laborer's Public Employee PAC" and the "RI Public Employee Education PAC". (Rep. Schadone, it should be noted, was one of the challengers to Gordon Fox for the House speakership, so there are multiple layers of political alliances in play here.)
• On the other side of the Democratic-establishment-money complex, at-large winner Alice Brady received $918 from Rep. Corvese, but no money from any other state Reps. In between, Kristen Catanzaro, also running in District 3 (there are two councilors per district in NP), received a total of $600 from Reps. Corvese, Ruggerio and Schadone.
• Interestingly, especially given the tense relationship between North Providence Democratic Mayor Charles Lombardi and the North Providence firefighters, Brady returned a $150 contribution from the NP Firefighters union, though this may be a straightforward matter of principle, as her campaign finance report states "did not realize it was a union PAC check" in the "purpose of expenditure" section of her campaign finance report. Autiello and Catanzaro each accepted $150 donations from the firefighters union. Neither Catanaro or Brady received any other PAC money.

Is this a bellwether warning of business-as-usual in Rhode Island politics? A warning for reformers that nothing can be taken for granted? Or a case of a unique situation in a unique community?

Insights from people on the ground in North Providence are most welcome.

Revelation of Another (Alleged) Political Stick Up in North Providence

No frog march, though; unlike the other (alleged) stick up, this one failed.

With some ... er, coaxing by Buddy Cianci, Mayor Charles Lombardi alleges (link currently broken) on ABC6 On the Record, to air this Sunday morning, that the RI Senate quashed the city's request for a supplemental tax increase - an increase approved by the House and the Auditor General - because the mayor refused to re-appoint former Senate President Joseph Montalbano to a municipal judgeship.

Now, as it would be highly unusual if North Providence's need for a supplemental tax did not arise out of decades of bad expenditure decisions at budget time (as opposed to a shortfall of revenue), I'm not going to pretend to be disappointed that North Providence taxpayers didn't get a supplemental tax bill. At the same time, the levying of such a tax should not be ensnarled in completely unrelated (alleged) political extortion.

Additionally, how do North Providence municipal workers feel about their wages - okay, more accurately, their possible raises - being suppressed by (alleged) dirty work to benefit the former Senate president? I don't claim to be a major ally of public labor but the Senate president purportedly was. Is this putting the working man first? It sounds more like maybe he was put second to a bigwig trying to keep a good gig.

Addendum

Mike Stanton at the ProJo interviewed Mayor Lombardi today during which we learn that the current Senate president knows nothing (nothing) about what may have transpired between the mayor and a member of the body which she leads. We also gain a little insight as to why the former Senate president may have been anxious to be re-appointed to the North Providence municipal judgeship.

I was told that the general consensus down there (at the Senate) was that if Joe was reappointed, it would look good for his chances to become a state judge.

A North Providence Coincidence?

Last year, as reported upon by Mark Reynolds of the Projo, the concerned public servants of the North Providence Town Council approved a forensic audit of their town's school system...

The Town Council wants to develop a formal proposal for a forensic audit of the school district's finances.

Councilmen also want the School Department to provide access to three years of checks and other financial records.

In a 6-to-0 vote Tuesday night, the council ordered the preparation of bid specifications for a forensic audit.

At the time it may have seemed to be a minor detail, but on the same August 4 evening on which the Council approved the school system audit, they also took a vote on extending it to the municipal side of government...

Councilman Manfredi requests discussion concerning meeting and forensic audit.

Councilman Manfredi spoke stating that after looking over things and speaking to Bob Civetti from Braver and Associates (the auditing firm for the town), he believes that the School Department problems are not criminal but mismanagement of funds instead. He does not believe that we need a forensic audit right now because the School Department was open to all changes and he believes that we should give them the opportunity to respond and correct the way the money is being managed. Douglas spoke stating that he did not believe that there was criminal activity going on, but instead mismanagement and the school department employees learning to use the new MUNIS system. There was much discussion amongst the council members regarding going out to bid for a forensic audit for the school department and a resident spoke.

...and in light of events that occurred this week, the breakdown of the vote NOT to audit the municipal side of North Providence government can't help but be eye-catching...

1) MOTION FAILED: (Caranci made a motion, seconded by Giusti we should include the municipal side in the audit. Upon a roll call vote of 3 ayes (Caranci, Giusti and Manfredi) and 3 nays (Zambarano, Douglas and Burchfield) THE MOTION FAILED.)

It is reasonable to ask if the votes on either side of this issue were driven more by a general sense that an audit of North Providence might turn up something unusual -- or if there were concerns and suspicions about specific items that might be revealed.

The Frog March Parade Moves to Municipalities

My delay in posting this news derives from the swamp of low-grade political shenanigans through which I've been fighting local pro-tax forces in Tiverton, but it's worth noting some FBI arrests of North Providence Town Council members, President Joseph Burchfield, John Zambarano, and Raymond Douglas for alleged full-on extortion:

First Burchfield, then Councilman John A. Zambarano, and, last, Councilman Raymond L. Douglas III, were charged with the extortion of another person and receiving a bribe of more than $5,000.

The case involves a proposal to build a Stop & Shop supermarket on a former junkyard across from the North Providence High School, according to an FBI affidavit and a press release from U.S. Atty. Peter F. Neronha.

"We Can't Afford the Government that We Have"

So said Mayor Lombardi yesterday morning on the John DePetro Show. While the comment might also apply to our state and federal governments, in actuality, it referred to the status of the town of North Providence.

Indeed, one has to wonder what the town's options are at this point to deal with a $10 million shortfall for the fiscal year that ends next month.

It turns out that town officials have no easy way to cut expenditures by re-opening contracts, not even if they hand the town over to the state.

[Auditor General Ernest A.] Almonte told [Council President Joseph Burchfield] that state officials would have no special advantages, such as an ability to reopen contracts, if they take control of North Providence’s finances.

In recent days, Burchfield and others, including Mayor Charles A. Lombardi, have wondered if a takeover could be one way to cut spending that’s contractually protected or required by state mandates.

And they can't increase revenue enough to cover those contracts. An earlier request by the town to bust the cap and increase property taxes was nixed by the Senate.

While one sympathizes, one also has to wonder about the reasoning process that led North Providence solons, current and prior, to execute contracts that placed the town in this untenable position.

Supplemental Tax Bill? Mayor Lombardi Will Name Names

In his editorial today, Valley Breeze publisher Tom Ward writes

You've got to love that Mayor Charlie Lombardi, unless you hate him, of course. This week he's telling hometown state legislators that if they approve the state supplemental budget, the one with huge cuts in state aid to North Providence and other communities, he'll be forced to send out an extra tax bill to residents.

On it, he'll name the names of legislators who made the extra bill possible.

Of course, they might complain that it's Lombardi, Town Council and School Committee members who are to blame for years of overspending, but Lombardi counters that pro-union state mandates, like the ones that force minimum manning on fire engines, balloon the budget. Lift those mandates, as Gov. Donald Carcieri has suggested, and Lombardi can balance the budget and avoid large tax hikes.

Lombardi Beats the Path

In dealing with his town's unions in series, North Providence Mayor Charles Lombardi is imparting a lesson:

Mayor Charles A. Lombardi dismissed 20 town workers last night after their unions failed to meet a 7 p.m. deadline for accepting deep cuts in wages and benefits.

In all, 10 municipal workers and 10 public works employees lost their jobs. Lombardi also plans to lay off 30 firefighters following a Superior Court hearing tomorrow.

If the firefighters don't get the message, then perhaps unions in other Rhode Island cities and towns will. The money tree has wilted; there will be no more temporary fixes that worsen our predicament; you can divvy what remains or take your brethren's unemployment, and the municipalities' lost services on your shoulders.

Personally, I think it would be more helpful in the long run for the unions to continue to fight and to reveal their nature. But beginning to change their nature would work, as well.

A Warning-Response Disconnect in North Providence (for One)

North Providence Mayor Charles Lombardi has issued twenty layoff notices to public works and municipal employees that will go into effect unless their unions accept a five percent cut in salary and a fifteen percent health insurance contribution. The mayor's had mixed results, thus far, with the police union coming up with $200,000 and the firefighters' union going to court. It's the argument of the latter — put forward elsewhere, recently — that strikes a discordant tone:

On Thursday night, the entire membership of the firefighters' union voted against the cuts, according to the union's president, John Silva.

The firefighters, who number about 100, voted for a package of concessions that would save the town about $85,000 between now and June 30, and about $390,000 over the next 15 months, Silva said.

But Lombardi said the town needs about $240,000 in concessions from the firefighters in the current budget year, which ends June 30.

The firefighters union secured a restraining order that would provide some level of layoff protection until Judge Mark A. Pfeiffer takes up the issue Tuesday morning.

Silva said the order would prevent the layoffs. Lombardi said the restraining order allows him to lay off as many as 22 firefighters.

Following the lead of Woonsocket firefighters, the union is arguing that the threatened layoffs would jeopardize their safety and that of the public.

"It's a third of our force," Silva said.

We should heed the advice of professional firefighters when it comes to the necessary provisions for our safety, of course, but there's something that justifiably restrains public judgment. If firefighter and civilian safety is so terribly threatened by layoffs, then how can it not be worth a small cut in pay and reasonable healthcare contributions to prevent them?

Unionists would say that public safety workers would be in a disadvantageous negotiating position if underfunding were always leveraged against their conscience, and that's a valid argument to be worked out through the give and take of politics and negotiations. But in the current circumstances, the disadvantage is too dramatically skewed the other way; the North Providence union can refuse the concession and turn to the court to stop detrimental cuts in staffing and services.

Cuts or Layoffs, City by City, Town by Town

It's going to become impossible to catalog all such stories, but a couple came with today's paper. In Woonsocket:

Woonsocket officials warned the city's two public safety unions yesterday that if they don't agree to substantive concessions on pay or benefits, they will lay off about 40 of the community's 101 police officers and 55 to 60 of its 135 firefighters, possibly by the end of the week.

They did so after a Superior Court judge, ruling on a request by both unions, scuttled the 5 percent pay cuts and 15 percent health coverage contributions that the city unilaterally imposed on both unions two weeks ago in an effort to cut current-year spending by more than $1.2 million.

In North Providence:

In a series of open and closed sessions in the library of North Providence High School, the mayor gave leaders of the police, firefighters, public works and municipal workers unions until 10 p.m. Sunday to accept his demand that they accede to 5 percent wage cuts and start contributing 15 percent of the cost of their health care.

Also, he put the School Committee on notice that the Town Council would unilaterally cut its budget unless the board secures similar concessions from the School Department's unions.

Those developments, against the backdrop of a current-year deficit that threatens to hit $13 million, came out of a meeting at which state Auditor General Ernest A. Almonte warned officials and union leaders that failure to achieve a balanced budget could lead to a state takeover that he said would be painful.

And as the editors of the Sakonnet Times describe:

It happened in New Bedford where the all-but-broke city asked police and firefighters to accept a 10 percent pay cut or else dozens of their own would be let go. Ten percent is a significant loss but with many of the rank and file earning $100,000 or more with overtime and enjoying world-class benefits, the loss seems bearable given what’s going on all around.

When, as promised, the city followed through with layoffs, those same workers who had refused to compromise voiced outrage that the city would put its citizens at risk by cutting police and firefighters.

Faced with similar options, teachers' unions have been just as rigid. Teachers in East Providence have taken the city to court rather than concede the pay and benefit changes asked of them. Since the city simply doesn't have the money to pay what the contract dictates, the price of victory for teachers will surely be the loss of many of their own. They need only look to West Warwick or Central Falls if they think otherwise.

And in Tiverton, teachers celebrated retroactive raises finally won after a long fight with their town. Almost going unnoticed was the school committee’s next act — the elimination of a half-dozen teacher assistants.

One-time fixes will not last forever. Public-sector unionists would do well to do some reading:

God forbade it indeede, but Faustus hath done it:
for vaine pleasure of 24. yeares, hath Faustus lost eternall
ioy and felicitie, I writ them a bill with mine owne bloud,
the date is expired, the time wil come, and he wil fetch mee.