Elorza’s 2020 Budget: Millions in New Spending — No Plan for $1.3B in Unfunded Pension Obligation

Elorza’s 2020 Budget: Millions in New Spending — No Plan for $1.3B in Unfunded Pension Obligation

Providence Mayor Jorge Elorza unveiled his $772 million Fiscal Year 2020 budget proposal on Tuesday, a 3.1% increase over the current year.

The budget leverages the spike in real estate value and the recent residential property revaluation —   the city expects to collect $12.2 million in additional residential tax revenue.

Elorza’s budget, titled “Investing in Our Future By Investing in Our People,” includes new spending for the following programs, in addition to increases in existing programs.  New program funding includes:

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* Doula supports: $50,000 (Doulas are professionals trained in childbirth who promote emotional and physical support to a mother who is expecting, experiencing labor, or has recently given birth). 
* Washing machines in school: $50,000
* Comprehensive student health plan: $20,000 
* New marketing campaign: $125,000
* New affordable housing strategy: $75,000
* Farmers market voucher program: $4,000
* Expanding the number of public pre-kindergarten classrooms in the state: $750,000"

What we have in Providence is a city on the rise and future that hasn’t been this bright in a long time," said Elorza. 

What Elorza is not proposing maybe more important:

Elorza’s budget includes a pension payment of $86,723,404 to the pension fund — an increase over the current year’s payment of $83,357,367 — with the rate of return pegged at 8% at what General Treasurer Seth Magaziner called “unrealistic” is his recently released report putting the Providence pension fund in critical status, and unfunded by more than $1.356 billion. 

And while the city touts fulling funding the annual required contribution (ARC) — recently redefined as the actuarial defined contribution (ADC) — lowering the expected rate of return, currently in the highest in the state, would mean millions more in payments

Residential Tax Rates, Education, Speed Cameras, and More

Following the residential revaluation, the non-occupied rate was decreased by 18.35% to $15.35/1000, and the non-owner occupied rate was decreased by 23.15% to $24.56/1000.

With the increased valuation and maximum 4% levy, the city expects to realize an increase of $12.2 million in revenue. 

The commercial and tangible tax rate remained unchanged at $36.70/1000 (commercial) and $55.80/1000 (tangible). 

Elorza’s budget proposes an increase of $1.5 million in the city’s contribution to the Providence schools to a total of $130,046,611.

According to city officials, there are no plans for any budget increases from parking meters, speed cameras, or stoplight cameras.