Providence’s financial options dwindling after major setbacksFebruary 1st, 2012 at 9:22 pm by Ted Nesi under Nesi's Notes, On the Main Site
• New: Providence is facing bankruptcy, Taveras says (Feb. 2)
Why did Mayor Taveras just call a press conference for tomorrow morning to discuss Providence’s fiscal crisis?
City Hall and State House sources were saying nothing Wednesday night. But it doesn’t take a rocket scientist to figure out that the mayor’s message will almost certainly be grim. Depending on the severity of the situation, Taveras may warn that putting the capital city into receivership – at least – is a growing possibility.
That sounds dramatic. But 11 months after Taveras declared “a category five,” so is Providence’s financial crisis. With the end of its fiscal year just five months away and cash-flow problems looming, the clock is ticking.
Taveras made significant progress last spring and summer in his effort to close a $110 million shortfall in the city budget for 2011-12. But since then he’s been hit with a string of major setbacks.
The first came in November, when the Senate and Treasurer Gina Raimondo blocked Governor Chafee’s push to include language in the pension law giving cities and towns a green light to suspend cost-of-living adjustments, which compound at 6% a year for some in Providence.
The next came in December, when Brown University refused to make $4 million in additional annual payments to the city, countering with an offer of $2 million that Taveras rejected. There’s been little sign of progress since then with Brown or the other nonprofits.
The latest defeat came on Monday, when Superior Court Judge Sarah Taft-Carter sided with retirees and blocked the city from forcing its retired police and firefighters to sign up for Medicare. Taft-Carter dismissed the $6 million cost of her decision as “alleged savings” that “would not save the city from financial ruin.”
For Providence, there are more troubling implications to the ruling by Taft-Carter, who’s been deciding all the big public-sector benefit cases. If she won’t let Providence change retirees’ health insurance, why would she let the city suspend their COLAs? And if the city appeals, how much time – and money – will it spend waiting for a final decision?
Facing that landscape, it’s no wonder the mood in and around City Hall is bleak tonight. The question is what cards the mayor has left to play on Thursday morning, and whether it’s enough to keep Providence afloat.
(photo: Ted Nesi/WPRI)