Smiley’s Potential Mid-Year Tax Hike Would Be the First Since Cianci

Smiley’s Potential Mid-Year Tax Hike Would Be the First Since Cianci

Providence Mayor Brett Smiley and his predecessor Jorge Elorza tried to avoid having the city of Providence pay its share of the Providence School Department bill, but they got caught.

Now, Smiley faces a budget crisis and admits that the city may have to implement a mid-year tax increase to address the financial shortfall.

This would be the first mid-year tax hike since the late Vincent “Buddy” Cianci, Jr. was Mayor of Providence — the first time before he was convicted of his first felony — since 1981.

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Neither Rhode Island’s near depression-like credit union crisis of the early 1990s nor the financial crisis Mayor Angel Taveras found after David Cicilline left City Hall for Congress in 2011 caused the city to implement a mid-year tax increase. 

The New York Times reported in April of 2012, “Taveras had been in office for two months last year when he announced that this capital city was in dire financial shape — not the Category 3 hurricane he had expected, he said at the time, but a full-on Category 5.”

Now, a lawsuit by the Rhode Island Department of Education is forcing the city of Providence to pay its share of the cost of the Providence Public School Department (PPSD), and the recent decision by Superior Court Judge Jeffrey Lanphear has forced Smiley to settle the case and pay up.

The settlement unveils the disturbingly fragile city finances and undercuts Smiley’s management claims. Just three weeks ago, Smiley declared he had put the city in a strong financial position. 

“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.”   

In April of 2024, Smiley posted to social media, proclaiming that Providence was the best-run city in America.

“Looking to join the best-run city in the country? We're always hiring! Find more information about what positions are open and where you may fit here,” wrote Smiley.

 

Tax Hike, Rent Increases, and Questions of Management

At Wednesday’s press conference, Smiley was forced to be blunt when he announced that the settlement that his administration was now forced to sign to resolve the PPSD lawsuit would trigger a tax increase and cuts to city services.

“We think that a tax increase is inevitable. A midyear tax increase might be avoided; however, the taxpayers of Providence, in order to properly fund their schools, are going to have to help contribute to that, said Smiley.

“But my plan is not to put all of the burden on the taxpayers, and there will still be cuts and sacrifices in city government. We know that families and businesses and Providence are strained, and additional taxes only add to the cost of housing, the cost of rent, the cost of doing business here in Providence,” said Smiley.

“So it is inevitable that there will be a tax increase, but know, our taxpayers should know, that city government is doing its part to tighten its belt as well. Our hope is that we can avoid a midyear tax increase but instead increase it to be able to raise taxes by around $15 million next year,” added Smiley.

Smiley said he will release the details on the agreement with the state and the total financial cost relating to school funding on Friday.

 

EDITORIAL NOTE: The last mid-year tax increase in Providence was in 1981. An earlier version said the 1970s.