Chafee: State Aid Cuts Put Poor Towns in Peril

Governor Chafee said former Governor Don Carcieri and the General Assembly put struggling communities in peril when they cut some $195 million in state aid to cities and towns.

“It’s no wonder Providence is in trouble, it’s no wonder Pawtucket is having a trouble making payroll, it’s no wonder Central Falls went into bankruptcy,”  he said after speaking at a conference on the state’s economy at Bryant University today. “They just couldn’t sustain those kinds of cuts. There is no property tax base to transfer those kinds of cuts onto.”

Chafee said Carcieri and the General Assembly essentially balanced the state’s budget by taking money away from cities and towns – a move that he said the state’s wealthy communities could withstand but the poorer communities could not.

“I thought it was the path of least resistance,” he said. “That way they could go and say we didn’t raise taxes but at the same time they did raise taxes on the property tax payers of those communities. It was a little disingenuous to say we’re not raising taxes when you are passing it down to the property tax payers of the distressed communities.”

He said he would be unveiling a bill “later this week” that will help Rhode Island’s cities and towns. In addition to including enabling legislation that will allow cities and towns to rework annual pension increases as well as addition funding for local school districts. The additional school spending, he hopes, will be paid for by his proposed increase in the meals and beverage tax.

His bill will also include, he said, relief from state mandates for some of the state’s poorest communities, such as Providence, Pawtucket, Woonsocket and West Warwick. Other communities could be included as well, but he indicated it would not provide mandate relief for every community in the state.

He wouldn’t say which mandates would be included.

“It’s the usual suspects,” he said. “They are the ones that many of the town managers and mayors have been talking about for decades.”