Nesi: Tavares/1033 Deal “saves” 11%
The wages, benefits and other provisions outlined in Local 1033′s contract were projected to cost Providence’s city government about $60 million per year, adding up to $240 million over four years, according to calculations by Director of Administration Michael D’Amico sent along by spokesman David Ortiz. (For context, the entire city budget is somewhere around $638 million this year.)
So the $26 million in concessions approved by Local 1033 this week will decrease the contract’s estimated cost from $240 million to $214 million, a reduction of just under 11%.
At $60 million, the 1033 contract was about 9.4% of Providence’s total budget this year. According to previous reports, this deal saves $2.2 million this year. Providence has a structural deficit of $69.6 million, with $28.6 million of that debt that needs to be paid for by July 1. The savings from this deal covered 7.7% of that cost. If we equate budget share with share of the deficit, then 1033’s deal fell a little short of pulling “their fair share” (to use a familiar trope) when it comes to closing the budget gap this year. Incidentally, next year the 1033 “cuts” of $4.6 million will make up for about 4% of the total projected deficit for 2012. More work needs to be done.