Smiley Will Ask Legislature to Remove Cap, Request Tax Hike of More Than 4%

Smiley Will Ask Legislature to Remove Cap, Request Tax Hike of More Than 4%

Providence is officially in a financial crisis.

Rhode Island law caps the amount cities and towns can raise property taxes in a single year at 4%.

Specifically, the law states, “In its fiscal year 2013 and in each fiscal year thereafter, a city or town may levy a tax in an amount not more than four percent (4%) in excess of the total amount levied and certified by that city or town for its previous fiscal year. 

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The purpose is to ensure communities responsibly budget and financially plan.

 

Financial Crisis

Only communities in a “financial crisis” can petition the legislature to exceed the cap.

Since the law was implemented, Providence has only sought to exceed the cap in fiscal year 2012.

In a text message to GoLocal from Providence Mayor Brett Smiley’s communications director, Josh Estrella, he confirmed the Mayor would be seeking to petition the General Assembly to gain approval of a tax increase in the Fiscal Year 2026 budget.

Estrella said Smiley would not seek a mid-year tax increase. On Wednesday, Smiley said he was considering it.

The last time the city finances were such a disaster was in 1981, during Vincent “Buddy” Cianci, Jr.’s first run in City Hall.

“Any tax increase will be in the next fiscal year. We plan to seek General Assembly approval to raise the levy to allow Providence to go over the cap one-time for the purpose of funding our schools,” said Estrella.

 

Smiley Tried to Cheat Paying the City's Share of the Schools

Smiley at a press conference on Wednesday said he was aware of the need to fund the schools for more than two years. He took no steps and now the city is getting hit with the bill — a bill of tens of millions of dollars.

The agreement between the City and the Rhode Island Department of Education released Friday requires the City’s taxpayers to pay more than $30 million.

As part of the agreement, the City of Providence will provide PPSD: 

An additional $4 million for Fiscal Year 2024, bringing the City’s total contribution for that fiscal year to $134 million; 
An additional $11 million for Fiscal Year 2025, bringing the City’s total contribution for that fiscal year to $146.5 million; 
A $147 million total contribution for Fiscal Year 2026 (which equates to an $11.5 million increase from the City’s initial allocation for Fiscal Year 2025 of $135.5 million); and 
A $147 million base contribution for Fiscal Year 2027, plus a percentage increase matching the percentage increase in total State educational aid in that fiscal year. 

 

SEE QUESTIONS ABOUT SMILEY MISLEADING VOTERS AND RATING AGENCY FITCH

Just three weeks earlier in a press release about the city’s bond rating, Smiley claimed the city was fiscally sound.

 

 

“We have worked diligently to balance our financial operations while making strategic investments in our city’s future. Our recent rating upgrades are a testament to our responsible fiscal management, positioning our city for long-term success and lower interest costs,” said Smiley. “We will continue to focus on making responsible investments that strengthen our  financial position and benefit all Providence community members, ensuring a stable and prosperous future for our city.”  

Three weeks later, Providence is in a financial crisis.