State of the City: Employees, retirees give first

Providence Mayor Angel Taveras delivers the annual State of the City address.

As expected, Mayor Angel Taveras said the state of the city is not so good.

“Providence is in peril,” said the mayor of the capital city to lead into the annual State of the City speech. And, as he reiterated throughout his 20 minute address, it’s up to retirees and tax-exempt landowners to save it.

The city is still $22.5 million short of being fiscally solvent this year and – short of raising property taxes, which Taveras said was an option of absolute last resort – the only place left to turn is retiree benefits and the colleges and hospitals in the city. The retirees already pay taxes, the hospitals and colleges don’t.

Brown University is willing to pay more than the $2 million they already give to the city, and perhaps the big news of the speech was that a deal with Johnson and Wales is imminent.

“I am hopeful that this week we will announce a new agreement with Johnson & Wales University, reaffirming the University’s strong commitment to our city,” Taveras said.

No word on whether or not the six hospitals in the city are willing to step up.

“Our tax-exempts cannot stand quietly on the sidelines any longer,” he said. “If they refuse to compromise, we will hold them accountable by other means.”

The “other means” may be the legislative package the city prepared for the General Assembly. After his speech. Senator Rhoda Perry said the Providence caucus will begin to consider the package later this week.

Still, Taveras is looking for more from the retirees than he is from the tax-exempt institutions in the city. He is hoping to get $7.1 million from the nonprofits and promised to get at least twice that from retirees.

“This must stop now,” Taveras intoned. In the written version of his speech, distributed to members of the media, there was an exclamation mark, to drive the point home.

He was speaking about retirees who receive 5 and 6 percent annual increases to their pension benefits. We hear a lot about the unsustainable 5 and 6 percent increases, but what you rarely hear is that this accounts for only about 20 percent of retirees.

That said, the vast majority of the mayor’s speech was dedicated to thanking the municipal workers who have already sacrificed for the city. When Taveras inherited Providence’s fiscal woes, there was a $110 million structural deficit. He cut it to a fraction of that, in part, by shrinking the size of city payroll by some 200 employees.

We owe a debt of gratitude to our city workers from Laborers Local 1033 who keep this city running every day and were the first to agree to significant concessions to help the City,” Taveras said. He also thanked the police and fire unions, who made significant concessions in their contract negotiations.

While employees, retirees and nonprofits are being asked to help, there is one constituent group the mayor said he would like to avoid tapping into: the taxpayer. While he didn’t say a tax increase was off the table, he did call it “untenable.”

Update: An earlier version of this story indicated that Taveras wants retirees to contribute $8 million to help the city out of its deficit. In fact, that is only the health care portion of retiree benefits that Taveras hopes to save.

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