Providence just released it's $734 million budget and there won't be any property tax increases in Providence because Mayor Elorza expects his bills to be paid for by everyone else. That's what a "progressive" budget looks like.
Elorza asks for $241 million in district/school state aid in addition to another $74 million in state aid (separate from school aid) for everything else. He also increases the school budget by $3.65 million. Part of that aid would go to help fund a new school for refugees and recent immigrants while the city's retiree pensions are funded at 23%. Priorities...
That's a total of $315 million that Providence is requesting in state aid !
The City of Cranston came out of the 2017-2018 budget gate with a property tax increase of .49cents/per $1000 assessed value, and blamed the tax hike on city retiree pension and healthcare cost increases. That's a budget increase of $10.1 million. Cranston schools asked for $1.7 million more and Fung countered with $700K.
Warwick's 2017-2018 should be out any day now.
To re-cap Warwick's FY 2016-2017 budget: $137,592,835 went to municipal services and $161,135,284 went to the schools. The school budget increased by $1.6 million and the city by $3 million. This was a property re-val year and if it wasn't, property tax increases would have been much higher.
*It's important to note that all of the new local tax dollar that came revenue went to the city budget, and the schools relied solely on state and federal funding increases.
Warwick schools healthcare costs increased by 8% this year and the schools will be asking the city for an additional $1 million in funding just to cover the increased healthcare costs.
Warwick schools will be requesting a total of $4.7 million more from the city to balance their budget this upcoming fiscal year.
Of the $137.5 million that was allocated to the city side of business, $120.5 million of it went to fund retired & active city employee expenses and debt payments. That's about 87% of the city side of the budget going to pay for the city employees that currently work or used to work for the city, along with debt service payments.. with only $17 million left over for everything else.
How much more will the city side of business need in property tax increases this year to balance the budget?
Expect another tax increase punch to the gut.
The pie chart below shows how our current 2016-2017 budget was divvied up. Almost 87% of our entire budget funds debt, and all active and retired employee expenses and just over $17 million of the $137.5 million is allocated to pay for everything else. Providence allocates 23% of its budget to cover retiree expenses...it's 34% for Warwick and Warwick sets aside NOTHING for retiree healthcare, unlike Providence-- we just pay as we go.
The city's healthcare actuary stated two years ago and reiterated it again last month that if Warwick was his business, he would have run away from it a long time ago and that- we are already at the breaking point.
The elephant in the room is retiree employee benefits and the only solution to the problem is to seriously reform it to reduce expenses. The city must do this because every time taxes are increased, all of those new tax dollars go to feed that elephant.
Everyone always asks: "Where is all of the money going?"
In the last 10 years, of the new tax dollars that came in to the city (from increasing property taxes), $12.2 million of it went to fund city retiree expenses and $12.7 million went to fund active city worker expenses (healthcare, salaries, raises, promotions, new hires, COLAs, step increases, OT, sick time, unused sick time, RX copays, FICA, Medicare, dental, retiree lifetime healthcare, accident insurance, etc..).
That's almost $25 million of new tax dollars collected going to pay for active and retired city employee benefits. Every other line item in the budget was cut by $600K to cover these active and retired employee expenses! That means every time taxes go up, the people see no improvements to a community.. only continuous degradation, i.e. to our roads, our schools buildings, our senior centers, our social services and our environment.
When the city administration continues to state -there really isn't a problem- when there clearly is, it results in the Warwick city unions not willing to make any concessions because they are repeatedly misinformed.
Will Mayor Avedisian ever have the guts to tackle the hardest issues? I don't think so.. and that's why he's been the Mayor of Warwick for so long.
In the meantime, prepare yourselves for continues tax increases for as far as the eye can see.