Providence’s financial options dwindling after major setbacks
February 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)
Tags: angel taveras, municipal, providence, providence financial crisis, raimondo-chafee, sarah taft-carter
Nesi's Notes covers politics and the economy in and around Rhode Island for WPRI.com. (Twitter: 
It is time for the city to take chapter 9. Break all the union contracts, cut the pensions by 50%, cut all the public sector employees pay by 25%, make all of these people pay 35% of the cost of their health insurance? The time has come to make it clear to these people they raped the taxpayers for too long. Now we want all the at money back. The taxes are too high the public sector employees compensation are too high. That includes the public school teachers. Too bad our elected officals think my tax dollars should be used to pay for special interests to get the vote out.
You beat me to it again Ed, good job!!! This is the death knell for the public employee union gravy train, finally.
Sorry Cosmo, My schedule allows me to go on to this site at strange times, all the time.
ED, if you will agree to taking the same cuts your reporting are good for them, maybe we have a starting point to talk. The city has yet to try and be anywhere close to reasonable talk. their position ,( to me ) seems to be our way or the hiway, thats why these things go to court all the time. Remember everytime these things go to court there are only losers because of high legal costs. You could not afford the cuts your recommending, but the “regular” retiree is getting something between 12-30 k per year, these 180 k pensions are single events that your and my elected officials let go thru so they can get the votes in election years. We don;t pay social security, thats the reason for the pension, . Let’s see where calmer heads take this before we cut the heads off evertone and then can.t think anymore,
Tell ya what Vinny, the day I can elect my own bosses I’ll agree to your reasoning so don’t hold your breath. Bankruptcy went real well in Central Fall, no reason why Mr. Flanders can’t work his magic once again. And as for calm heads, the kind of calm heads your talking about is what got Rhode Island into this mess to begin with.
Vinny I work in the PRIVATE SECTOR. I am an at will employee. When these contracts are up, these people can all be replaced. No one is guaranteed employment. It is time the public sector get with the real world.
Private sector is a gamble, day by day. People join unions to protect their unwillingness to gamble. The party is over. The Ponzi Scheme is collapsing. Get ready for the inevitable.
Yawn….
Close the doors send everyone home.Thank the bias union judge Taft-Carter and declare bankrutcy.
I think the judge is doing us a favor, setting a clear path toward bankruptcy, which is the only way this is going to be solved.
The MEDS and EDS need to pay their fair share. And the Retirees too, who are getting Blue Cross and 6% raises for life!!!
Lets not forget the man who made this bankruptcy possible David Cicilline
Vinny – you can not cure stupid. Let them rate all they want, makes the little children feel warm and fuzzy inside.
[...] Related: Providence’s financial options dwindling after major setbacks (Feb. 1) Tags: angel taveras, [...]
Another option is to call the past actions of elected and appointed officials
exactly what they were……CRIMINAL….Let the AG at them….
Unfortunately, they cannot just go Bankrupt. They must prove there are NO other alternatives. Which there are. Lay-offs?? Taxes?? Providence won’t be going bankrupt, sorry to disappoint the less than educated. Yes, Ed and Cosmo I mean you.
Oreo, They raise taxes and I give the keys of my house back to the bank. With 3,000 houses in foreclosure and short sales, I will live mortage free for years.
OREO you really think it’s going to be hard to prove no other alternative? Providence is at least as bad off as CF, in absolute numbers worse. I guess math isn’t one of your strong points, Mr. Ed u cation. But come to think of it, I can think of a way to resolve the crisis, the city can start selling what you’re smoking.
Thanks for proving my point Cosmo.
Where are Chafee’s appointed financial wizards. Time to bring Tavaras’s ego under control and let the state straighten out Providence finances. No more blowing off attempts to get their ship in order.
Tavares has been doing a great job, if he ever moves to Cranston I’ll vote for him for mayor in a New York second. God forbid Linc “dumb as a bag of hair” should get involved. Chafee should just stand out of the way, let it go to bankruptcy and get Mr. Flanders in there to clean up that mess. Whatever they’re paying that guy, he is so worth it.
you cant promise someone something then take it back
George I assume you mean that the promise made to the providence tax payers has also been exactly as was promised to be. Faulty argument my friend-the taxpayer’s burden has increased that was not the promise made to us either…
These retirees with 5 & 6% compounded cola’s are unbelievable ! they dont even care if the city goes broke. WHY is a ordinance not passed to not allow a retired member to not make any more $$ than an active member?????? as of today this is still the case..sad, these retired rich scammers are laughing at providence from Fla !
Hey George, is that kinda like when Cicilline “promised” he was gonna balance the budget,( or any other politician who promises to not raise taxes) when he was actually raping the rainy day fund and borrowing to balance the budget..at least Tavares is OPEN/HONEST about things I think hes doing a great job in a sinking ship called RI !!
RI is not a sinking ship, it’s a sunken ship. Maybe we can raise it from the bottom but probably not.