state aid – RI Future

April 9, 2015April 12, 2015

Legislation would boost state aid to urban libraries

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Two Central Falls lawmakers authored a bill that would direct more state funding to libraries in the seven distressed urban cities in Rhode Island. The legislation, which will be heard by a Senate committee today, follows an RI Future investigation last year that showed affluent suburban libraries receive more state library aid per resident than poor urban communities.

library funding — RI Future analyzed state library aid in March of last year and found per resident the state offers the most financial aid to some of the most affluent communities in Rhode Island while the poorest communities receive the least state aid. Click on the image to read the post from March, 2014.

“It says right in Rhode Island state law that free public libraries are essential to the general enlightenment of citizens in a democracy and that they are an integral part of the educational system at all levels,” said Central Falls Rep. Shelby Maldonado, the sponsor of the bill in the House. “The law also says that it’s the responsibility of government to provide adequate financial support for all free public libraries. In order for that to be done fairly and effectively, it’s only right that the state should increase library aid to distressed communities to cover their annual assessments to Ocean State Libraries.”

The Central Falls library was shuttered for a time as the city went through bankruptcy. Sen. Betty Crowley, the Senate sponsor of the bill, said only because of a few large, high profile donations does Central Falls have a functioning library. “If it weren’t for people like Viola Davis and Alec Baldwin, they would still be closed,” she said.

In spite of their generosity, the library in Central Falls can’t afford to open on weekends, and closes at 6pm on weekdays. This is an acute issue for Central Falls, said Maldonado.

“A lot of families here still don’t have broad band and don’t even have the internet,” she said. “Our kids don’t have the support they need.”

Crowley said the additional state aid “could enable us to open up on Saturdays.”

The legislation would direct about $500,000 from the general fund to libraries in the seven distressed cities: Providence, $284,423; Pawtucket, $65,124; Woonsocket, $53,107; North Providence, $48,437; West Warwick, $40,321 and Central Falls, $18,566. The amounts are based on the contribution each community makes to the Ocean State Library consortium, the umbrella organization for local libraries in Rhode Island.

The new revenue would come from the general fund, Maldonado said, and thus wouldn’t affect state library funding in other communities. “Leadership is open to the idea and we continue to have ongoing conversations,” she said.

Rhode Island’s state library funding formula matches city and town investment, a regressive method that rewards affluence and punishes poverty. Last year the state gave $337,167 in library aid to Barrington and $26,046 to Central Falls.

An RI Future investigation last year showed per resident Rhode Island gives the most library aid to: Barrington, Jamestown, North Kingstown, East Greenwich and Cumberland. The communities to get the least state library aid per resident were: Central Falls, Pawtucket, Woonsocket, West Warwick and Providence.

Deborah Barchi, director of the Barrington library and a past president of the Ocean State Libraries consortium, told RI Future last year she thinks the state funding formula for local libraries is fair. “Each town makes those decisions based on what they value,” she said. “No matter what metric you use, there would be somebody who would feel they weren’t getting enough money.”

But Steve Larrick, the Central Falls planning director and a member of the city library’s board of directors disagreed.

“We think the state needs to play a role in our urban libraries,” he said at the time. “Barrington doesn’t need a library to have access to tremendous resources,” he said. “They have great access to broadband in their homes, and their schools are top notch. Their school library is probably better than our public library. A dollar spent there will not be as meaningful as a dollar spent on the Central Falls library.”

Even the very conservative Center for Freedom and Prosperity, in its spotlight on spending report last year, agreed the state library aid formula is highly regressive.

“It isn’t often that we get to agree with our progressive friends on a matter of government spending, but RIFuture editor Bob Plain noticed that the state gives extra library aid to some communities because they’re able to invest more in their own facilities,” according to its report. “Consequently, Barrington receives over $20 per resident to subsidize its gem of a library while urban residents receive less than $10.”

The Senate Finance Committee will consider the bill today after the full Senate convenes.

March 13, 2014March 14, 2014

State library funding rewards Barrington, punishes Central Falls

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There are several differences between the public library in Barrington and the one in Central Falls.

The Barrington library has more than 129,000 print items on its shelves and lent out 384,257 materials last year. The Central Falls library has about 34,000 print items on the shelves and lent out 14,994 materials last year. Barrington’s library is open seven days a week, and Monday through Thursday it’s open for 12 hours a day – 9 am to 9pm. Central Falls’ library is open six days a week; five hours a day on Saturdays and seven on weekdays. Barrington’s library employs 45 people, 15 of them full time, and Central Falls employs two full time and two part time people. The Barrington library’s annual budget is just over $1.5 million and the Central Falls library’s budget is $165,000.

Another difference is the amount each will get in state aid this year. Governor Chafee’s proposed budget would give $341,488 to Barrington and $17,569 to Central Falls. That’s because state library aid is appropriated based on a library’s budget rather than its need.

Here’s the law: “For each city or town, the state’s share to support local public library services shall be equal to at least twenty-five percent (25%) of both the amount appropriated and expended in the second preceding fiscal year by the city or town from local tax revenues and funds from the public library’s private endowment that supplement the municipal appropriation.”

As such, state taxpayers generally send more dollars per resident to suburban libraries than to urban libraries.

Deborah Barchi, director of the Barrington library and a past president of the Ocean State Libraries consortium, thinks the state funding formula for local libraries is fair.

“Each town makes those decisions based on what they value,” she said. “No matter what metric you use, there would be somebody who would feel they weren’t getting enough money.”

But Steve Larrick, the president of the Central Falls Public Library Board, disagrees.

“We think the state needs to play a role in our urban libraries,” he said. Rhode Island “needs to do a better job of thinking about these social determinants.”

Larrick, who is also the town planning director in Central Falls, explained what he meant about social determinants.

“Barrington doesn’t need a library to have access to tremendous resources,” he said. “They have great access to broadband in their homes, and their schools are top notch. Their school library is probably better than our public library. A dollar spent there will not be as meaningful as a dollar spent on the Central Falls library.”

Central Falls almost lost its library when the city filed for bankruptcy two years ago. Receiver Bob Flanders closed the library and a grassroots community effort aided by New York Times coverage and a $10,000 donation from Alec Baldwin, kept the doors open. But operating expenses were decimated, and because the funding formula uses budget numbers from two years ago it is hitting them in state funding this year.

“For this year and next year, the average is really down because of the bankruptcy,” Larrick said.

I asked Governor Chafee to comment on the disparity in funding between the Barrington and Central Falls libraries. Spokeswoman Faye Zuckerman sent this:

“As Governor, a former mayor and city councilor, Governor Chafee has been an advocate for Rhode Island’s cities and towns. Throughout his years in office, he has been working to reverse the damage done by the past administration to municipalities and the Rhode Island property taxpayer.”

January 3, 2013

Community Inequality Is Biggest Economic Obstacle in RI

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grebien chafee copy — Pawtucket Mayor Don Grebien pleads with the members of the Senate Finance Committee to pass legislation that would have helped struggling cities in Rhode Island as Gov. Chafee looks on. (Photo by Bob Plain)

The biggest problem affecting Rhode Island’s economy is not high taxes, pension benefits or special interests. Not even close. It’s the income inequality that exists between the affluent suburbs and the depressed urban areas.

An extremely important post in Pacific Standard today highlights this, in part, by pointing out that while Providence is closing schools and libraries Barrington is increasing funding for both.

In Providence, where I live, the median household income is about $37,000. In Barrington, it is more than $90,000. Housing values mirror the money residents have at their disposal, and as a result Barrington can afford to invest heavily in all sorts of programs that benefit residents and the local (and national) economy. Providence, on the other hand, is facing a dire revenue shortfall and has taken drastic measures to save money, providing only basic services to those in need.

But wealthy or poor, people always seem to think that governments serving poor populations are somehow screwing up; few recognize that communities that are poor or have significant economic inequality (like Providence) are simply being screwed.

I made a similar sort of comparison last year in noting that East Greenwich, the other educationally superior affluent suburb, is considering getting iPads for all of its high school students while in Central Falls, Woonsocket and Pawtucket many students are sharing textbooks.

Much of this inequality is due to Rhode Island’s over-reliance on regressive property taxes and years of using a failed education funding formula. But the problem was inextricably exacerbated when former Gov. Don Carcieri cut state aid to cities and towns in his 2008 budget proposal. It’s literally bankrupting the state’s most struggling communities.

Sam Bell did an excellent seven-part series that dealt a lot with this dynamic in December, and Tom Sgouros has frequently touched upon this issue in RI Future posts. Last year, Libby Kimzey did a public presentation about it. Even RIPEC alluded to it in a report released in April:

Policy choices made by the state – specifically without accompanying mandate relief, and a provision for increasing state intervention for fiscally-stressed communities – increased the responsibility of municipalities to make changes to their fiscal structure. In some cases, municipalities were able to effectively balance their budgets despite cuts to local aid. In other cases, however, municipalities made policy decisions to bridge budgetary gaps that did not result in long-term structural change.

Gov. Chafee is one of the few Rhode Island politicians to pay much attention to this systemic failure. In March, he told me, “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. They just couldn’t sustain those kinds of cuts. There is no property tax base to transfer those kinds of cuts onto.”

Last year, he wanted to address the issue by giving struggling cities exemptions from some state mandates. This year, I suspect he will try to affect this problem in a different, more comprehensive manner.

Additionally, it seems to me that state legislators from urban areas could easily form a pretty powerful caucus to advocate for their shared self interest, which in this case amounts to a little less inequality.

April 2, 2012April 2, 2012

RIPEC Report: State Cuts Strangled Struggling Cities

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ripec report state aid — Chart courtesy of RIPEC

A new report from the Rhode Island Public Expenditure Council confirms an idea that RI Future has been reporting on for a month now, namely that state cuts to cities and towns are a big factor in the state’s struggling cities inabilities to balance their budgets.

Since 2008, says the report, state aid to cities and towns has been slashed by more than $175 million, a reduction of 72.6 percent.

“Policy choices made by the state – specifically without accompanying mandate relief, and a provision for increasing state intervention for fiscally-stressed communities – increased the responsibility of municipalities to make changes to their fiscal structure,” reads the report. “In some cases, municipalities were able to effectively balance their budgets despite cuts to local aid. In other cases, however, municipalities made policy decisions to bridge budgetary gaps that did not result in long-term structural change.”

Ted Nesi reports this morning that the report backs up what RI Future has been reporting since early March.

“It lends credence to the argument made by Governor Chafee and others that much of the immediate crisis stemmed from the 73% reduction in non-education aid to cities and towns the General Assembly approved between 2007 and 2011.”

We first reported on this dynamic on March 5. A little more than a week later, we asked Governor Chafee about it, and he confirmed our theory. Here’s an excerpt from that story:

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.”

But no one put it more bluntly than RI Future’s Libby Kimzey, who is running for a seat in the House of Representatives to represent Providence. At a Pecha Kucha event in February said, “Right now the State of Rhode Island is being a jerk to Providence. Those are decisions that state lawmakers have made that put the city in the position of closing schools and we’re having this whole conversation about cutting retirees benefits and it just gets me really worked up.”

Here’s the video from that:

For too long in Rhode Island, we’ve allowed the right-wing to portray struggling cities’ budget problems as exclusively the result of unfunded pension liabilities. The reality is top-own cuts from the state are far more a factor in why cash-strapped municipalities are having a hard time paying their bills.

March 28, 2012March 28, 2012

Department of Education Posts Funny Numbers

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Woonsocket High School (photo courtesy of Woonsocket School District)

What do you think about our state’s shiny new education funding formula? Neither Woonsocket nor Pawtucket are big fans and they are headed to a court date next month with the RI Department of Education (RIDE) over it.

Using measures that used to be part of the funding formula, these two cities are taxed more heavily than any other city or town in the state, save only Providence and Central Falls. But RIDE only suggests they raise taxes more instead of counting on state aid.

To great fanfare in 2010, the legislature enacted a new funding formula to dictate how much state money is shared with the state’s cities and towns. The new funding formula was widely praised for taking the uncertainty out of education funding for the state’s school districts. There are a couple of problems, though.

The first, and biggest is simply that the funding formula does not provide enough money to the places that need it the most. The school committees of Woonsocket and Pawtucket have filed a suit against the state over the adequacy of the funding for education. In a fairly catty reply to press coverage of the suit, RIDE put out a packet of graphs showing that over the past 10 years, Providence tax collections have risen repeatedly while Pawtucket and Woonsocket have not. RIDE calculated that if Woonsocket and Pawtucket had increased their tax levy by as much as Providence had, Pawtucket would have $2000 per student more to pay for education, and Woonsocket $1240 more.

The clear message: Providence has done what it takes, and raised taxes substantially over the past 15 years and Woonsocket and Pawtucket have not. What a bunch of slackers, right? Maybe the supplemental tax under consideration in Woonsocket to fill their budget hole is just catching up for a decade of bad behavior?

Of course the problem with the RIDE data is that Woonsocket and Pawtucket were already heavily taxed 15 years ago. All this data shows is what the increase in taxes has been. How heavy are the taxes in those cities? Has that changed in the last 20 years?

There is a better way to look at this. A number called “Tax Capacity” measures the relative wealth of cities and towns, and another number called “Tax Effort” measures the amount of that wealth that is actually taxed. These numbers used to be part of the funding formula — the version that was ignored during the last 15 years — and their definition is in state law (16-7.1-6). RIDE publishes these numbers on their Infoworks web site, but they use the 2008 data, and several of the values are wrong, possibly typographical errors. (The errors have been brought to RIDE’s attention, but they have neither defended the numbers nor changed them.)

But with the formula laid out in state law, anyone can calculate tax capacity and tax effort, so here they are, using 2010 and 1990 data, ranked by 2010 tax effort.

Municipality	Tax Capacity	Tax Effort	1990 Capacity	1990 Effort
Providence	31.99	266.69	52.25	199.42
Central Falls	14.18	227.04	22.56	255.17
Woonsocket	27.95	218.75	46.46	163.61
Pawtucket	32.14	199.99	56.36	134.54
North Providence	57.96	173.82	82.36	109.62
West Warwick	59.25	148.32	76.11	105.27
Cranston	74.85	143.92	98.90	101.32
Johnston	89.71	127.47	98.16	100.01
East Providence	74.46	124.05	94.45	102.59
Warwick	105.71	118.28	114.16	111.69
Glocester	100.74	105.64	100.72	103.42
West Greenwich	136.97	103.69	127.14	98.71
Tiverton	100.89	103.34	119.27	77.35
Hopkinton	102.63	103.34	93.73	88.76
North Smithfield	109.08	102.47	128.73	75.36
Warren	100.79	97.88	87.90	105.25
Foster	118.45	97.65	113.93	106.14
Richmond	105.32	91.88	90.36	103.55
Lincoln	137.63	89.19	129.73	90.57
Coventry	90.97	88.62	86.32	91.72
Smithfield	127.90	87.08	119.00	84.65
Burrillville	84.58	86.34	75.99	95.80
Scituate	144.76	82.21	141.15	70.86
Middletown	155.20	79.26	104.08	83.13
Cumberland	105.12	76.54	111.39	80.11
North Kingstown	162.68	75.52	147.41	79.21
East Greenwich	223.05	72.81	226.97	63.86
Barrington	232.53	70.32	208.23	67.09
Exeter	141.01	67.07	96.87	85.42
South Kingstown	158.75	66.63	123.55	80.64
Bristol	118.14	62.62	95.31	79.72
Newport	195.41	62.52	136.90	91.27
Westerly	223.38	61.82	175.68	62.07
Portsmouth	217.32	57.84	149.34	72.72
Narragansett	257.28	53.30	212.11	60.18
Charlestown	298.42	44.52	247.45	52.99
Jamestown	384.86	43.61	306.80	43.23
New Shoreham	1670.44	22.17	1062.39	35.24
Little Compton	648.51	21.52	346.28	37.87

(The 1990 data is from the 1992 “Annual State Report on Local Government and Finance” put out by what was to become the Office of Municipal Finance. The 2010 levy data was provided to me by OMA and the assessment data is at muni-info.ri.gov. I also used census data from 1990 and 2010.)

What you see from this table is that Woonsocket and Pawtucket were already among the most heavily taxed towns in the state in 1990.

These are relative numbers, where 100 is the state average in each column, so you can’t compare the 1990 to the 2010 numbers directly, but you can look at the growth of the indicators behind them.

Between 1990 and 2010, the assessed value of property in Woonsocket, equalized and weighted according to another formula in state law so one town can be compared with another despite differences in assessment calendars and practice (it’s called EWAV, and it includes an adjustment for the town’s median income) rose more slowly in Pawtucket and Woonsocket than in any other municipality in the state, an annual rate of 3.8% for Pawtucket and 3.86% for Woonsocket. Over those same 20 years, the EWAV values in Providence rose an average of 4.8% each year. By comparison, Warwick saw growth of 6.3% per year, and Portsmouth saw 9.0%.

Here’s the data (EWAV is in thousands):

Municipality	2010 EWAV	1990 EWAV	Growth Rate
Pawtucket	$3,013,403	$1,427,388	3.80%
Woonsocket	1,516,559	710,634	3.86
Providence	7,505,015	2927,949	4.81
Central Falls	362,161	138,758	4.91
North Providence	2,449,538	921,354	5.01
East Providence	4,614,434	1,658,822	5.24
West Warwick	2,278,583	776,596	5.52
Cranston	7,927,256	2,622,321	5.68
Warwick	11,513,435	3,399,716	6.28
Tiverton	2,097,388	595,065	6.50
North Smithfield	1,719,858	471,040	6.68
Johnston	3,400,091	908,254	6.82
STATEWIDE	138,666,859	34,979,107	7.12
Glocester	1,293,518	323,974	7.16
Warren	1,409,088	348,860	7.22
Scituate	1,969,910	482,021	7.29
East Greenwich	3,862,957	938,751	7.32
Cumberland	4,640,261	1,127,569	7.32
Burrillville	1,777,974	429,962	7.35
Foster	,718,814	171,410	7.43
Barrington	4,996,527	1,150,455	7.61
Coventry	4,196,466	935,387	7.79
Smithfield	3,610,988	794,954	7.86
North Kingstown	5,676,661	1,222,312	7.98
Middletown	3,302,183	706,047	8.01
Lincoln	3,826,882	816,075	8.03
Newport	6,351,713	1,347,027	8.06
Narragansett	5,378,526	1,108,006	8.21
Hopkinton	1,107,157	224,583	8.30
Bristol	3,572,581	718,532	8.34
Westerly	6,706,033	1,323,097	8.45
Jamestown	2,740,490	534,634	8.51
Charlestown	3,077,225	558,787	8.90
Portsmouth	4,978,614	877,550	9.06
South Kingstown	6,408,042	1,060,821	9.40
Richmond	1,069,497	168,553	9.67
Exeter	1,193,592	184,403	9.78
West Greenwich	1,107,062	154,772	10.33
Little Compton	2,983,453	403,052	10.52
New Shoreham	2,312,906	309,597	10.57

In other words, not only were Pawtucket and Woonsocket among the most heavily taxed communities in the state in 1990, but over the last two decades they had less growth in their capacity to levy taxes than any other town in the state — including Central Falls. Providence raised more money over the last two decades than either town, but they also saw substantially higher growth in their capacity to do so.

It’s easy to cluck one’s tongue about the slackers in Woonsocket and Pawtucket, but the evidence is that those city governments may have known something about their cities that the data crunchers at RIDE don’t.

March 14, 2012March 16, 2012

Lawsuit vs. State Could Cut Woonsocket Deficit in Half

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Woonsocket may be taking heat for saying it might have to close schools, but the School District has a mighty strong hand in its negotiations with the state on how to close the budget deficit.

The Department of Education plans to pay Woonsocket $4.3 million in state aid that the cash-strapped city didn’t receive under the previous school funding formula, said Elliot Krieger, a spokesperson with RIDE.

“Woonsocket was one of the underfunded districts,” Krieger said.

Under the new formula, designed in part to re-compensate the money that some districts didn’t receive under the previous formula, the $4.3 million is to be “phased in” over the next seven years, he said.

“It would too much of a shock to the system to do it all in one year,” Krieger said.

But Woonsocket and Pawtucket are suing the state in Superior Court, contending that spreading the payments out over seven years is unfair to them given their fiscal constraints.

“The problem is with the funding formula,” said education lawyer Stephen Robinson, who is bringing the suit against the state. He represents school districts in Portsmouth, Pawtucket, Central Falls and Tiverton. “It’s not fair to the poor urban districts. The reality is Woonsocket does not have fiscal capacity to fund [education].”

While even if Robinson wins the case and Woonsocket gets all the money it is owed it still wouldn’t close the school district’s deficit of $10 million, the city does hold another ace in its hand. In Rhode Island, the state has ultimate responsibility over public education.

“It’s in Article 12 of the state Constitution,” said Tim Duffy, executive director of the Rhode Island Association of School Committees. “The state and federal government have now articulated standards that schools need to meet. In order to meet those standards they need to have funds to meet them.”

Duffy said the state could ask Woonsocket to implement a supplemental tax increase. But given that Governor Chafee said yesterday that state aid cuts to cities and towns disproportionately hurt poor urban communities like Woonsocket, it might not be the way he chooses to handle the matter.

Christine Hunsinger, a spokesperson for Chafee said Rosemary Booth Gallogly is working with Woonsocket Mayor Leo Fontaine and the city council to “better understand what potential options are out there.”

According to Chris Celeste, Woonsocket’s tax assessor, the city has raised property taxes in each of the last three years.In 2008-09, property taxes went up 4.75 percent, which was the maximum increase under state law. In 2009-10, the maximum increase was 4.5 percent and taxes went up “right about that,” he said. In 2010-11, property taxes went up 4.16 percent with the maximum increase being 4.25 percent.