Progressive News, Opinion, and Analysis
It was a first for Providence. The mayor’s office live tweeted Angel Taveras’ State of the City speech last night. To mark the occasion, I collected some of the more interesting tweets from the speech, both from the mayor and some of the people who were following along at home and in the audience.
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.
Everyone knows what the state of the city is. Providence Mayor Angel Taveras has already sounded the alarm loudly. But nonetheless, he’ll still deliver the annual speech tonight at 7 p.m. in the Council Chambers of City Hall.
The state of the city is, of course, disastrous. Rhode Island’s capital city is on the brink of bankruptcy and could literally run out of operating funds by June. Taveras, a progressive Democrat, has trimmed the deficit by shrinking the city staff and through tough contract negotiations with employees, but he’s still some $22 million in the hole.
Certainly in his speech tonight Taveras will reiterate that retired employees and tax-exempt non-profit landowners need to pony up in order for Providence to remain fiscally solvent, but it will be interesting to see which group he reserves the stronger rhetoric for.
To date, Taveras has had harsher words for the retirees, but there’s a reason for that. With them he has a lever by which he can compel the needed capital, namely receivership and the city’s new relationship with Bob ‘Scissor or Guillotine’ Flanders.
However, the real money is with the nonprofits.
Brown University already pays Providence more than $2.2 million a year. But the Ivy League school owns property that would be net $38 million if it weren’t exempt from paying property taxes and is sitting on an endowment of more than $2 billion and just approved another tuition increase. Brown can afford to pay the city more, and likely will. Same with Johnson and Wales. It’d be nice if RISD and PC would follow suit.
The hospitals, the other big tax exempt entities in the city, are another story. Together, the six profitable medical institutions in Providence own property that would be taxed at more than $44 million. They pay the city nothing.
And it’s not because they are hurting for cash. Lifespan, which runs four of those hospitals, paid its nine highest-earning executives more than $9 million in salary and bonuses. Their CEO alone made $2.9 million. And according to the nurses union at the hospitals, Lifespan has made $320 million in profits over the past six years.
Providence needs a share to share in the financial success of Brown and Lifespan. If it doesn’t, no matter how much Taveras and Flanders are able to wrestle away from retirees, it won’t make the state of the city any less ruinous.
Note: The mayor’s office plans to live tweet his speech. The mayor tweets using @angel_taveras and you can follow the tweets and add your own using the hashtag #pvdsotc.
