Smiley Projects $85M Deficit Over 5 Years, Prov Council Committee OKs 8% Tax Increase Resolution
GoLocalProv News Team
Smiley Projects $85M Deficit Over 5 Years, Prov Council Committee OKs 8% Tax Increase Resolution
The Providence City Council Finance Committee on Thursday night voted to approve a resolution that asks the Rhode Island General Assembly to remove the 4% cap on Providence can increase taxes and requests the power for an additional 4% increase — allowing for a total of an 8% tax increase for the coming fiscal year.
For taxpayers and renters, this is tough news.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe resolution now must go to the full City Council, and the next meeting of the body is scheduled for Thursday, March 20.
If the Council approves the resolution, then the Rhode Island General Assembly will consider the massive tax hike.
Councilman Jim Taylor said, “February went by, now March - we’re a little behind the eight-ball. We’ve got the school budget that we’ve got to pay - we’re behind on the school payments - plus Elorza never raised taxes, so we’re down on money.”
Deficit of $85 Million Over Next 5 Years
That was not the only sobering news.
A memo from Mayor Brett Smiley’s chief financial officer, Lawrence Mancini, to the chair of the City Council’s Finance Committee, Helen Anthony, states that over the next five years, the city anticipates a deficit of $84,979,990.
“The projected year-end positions of the Municipal (General Fund) Budget are as follows: FY 2026 deficit $10,017,525, FY 2027 deficit $18,749,759, FY 2028 deficit $22,909,615, FY 2029 deficit $16,139,903 and FY 2030 deficit $17,163,788,” states the Smiley administration’s memo.
Last Saturday, GoLocal unveiled a city document that outlined the significant increase in the assessed value of Providence properties. READ MORE
The memo from Mancini makes some bold assumptions, including that state aid to the City of Providence will remain constant. The state is facing a budget deficit of more than $200 million this year.
Further, the Smiley administration makes no mention of the potential loss of federal funds during President Donald Trump’s tenure.
Presently, the city receives more than $174 million of Providence’s budget comes from federal funding, according to the City of Providence.
Before Donald Trump was sworn into office, the City of Providence was already in a fiscal crisis.
The majority of the federal funding to Providence is for education. A big unknown is the implication of President Trump’s promise to eliminate the U.S. Department of Education and what will happen to those federal funds that have historically come to prop up the Providence Schools.
Falling Apart Quickly
In November of 2024, Smiley claimed the city was "fiscally sound."
