Providence: The Black Eye and the Black Hole

Providence: The Black Eye and the Black Hole

Providence Mayor Angel Taveras set the right tone in his State of the City address this week by combining a sense of urgency with toughness in stating his determination to resolve the city’s fiscal crisis by warningthat he will force agreements on all involved parties one way or another.

The intended audience for his remarks were the non-profit institutions in the city, for which Brown University has become the poster child; and the “lucky 600”, or that elite group of Providence police and firefighter retirees who were the recipients of the greatest political pay-off of all time, the “double your retirement every 13 years” scheme, doled out in the early 1990’s. The speech was short-sighted however as it missed including the third, and arguably, the most important segment of the audience which needed to know he and his Administration mean business. The real test of the true strength of the Taveras rallying cry will come when he projects it up at the General Assemblyin the coming days.

Spokespersons for the Mayor and Brown University President Ruth Simmons can exchange as many frosty statements as they want; the truth is the real work of resolving a good chunk of the city’s fiscal problems has a lot less to do with Brown, the other private colleges, and certainly not the hospitals, than what’s being portrayed.

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State Support

Governor Chafee’s presence at the Taveras speech sent the right signal as it helped to solidify his own Administration’s stated intentions to help cities and towns reform deep pension debt problems. But Chafee will have his work cut out for him as he goes to bat for Taverasin trying to get Assembly support from leadership,most notably from Senate President Teresa Pavia-Weed, for legislation to suspend COLA’s on local communities.

During the statewide pension reform battle last fall, it became evident that among the leadership, the Senate President does not warm to the notion. Furthermore, Chafee and Taveras will have to confront legislators from within the city’s own delegation to the State House, like Rep. John Carnevale, who have mixed motives. Carnevale, who is championing legislation that’s all about non-profits and not about COLA’s, is proposing non-profits be asked to pay 25% of what the true tax rate on them would be, and he may be able to attract substantial support for the bill in light of the city’s dilemma. It’s not completely off base for Carnevale and others in the Providence delegation to want to increase the non-profits’ contributions to the city, however, there needs to be a distinction made between non-profits like a university with a billion dollar-plus endowment, and a cash-strapped hospital group.

But it’s critical to understand the strategy that is unfolding here. Carnevale, and legislators who fit his profile as those who themselves are in the union benefit windfall club, are determined to change the conversation in both the city and at the Legislature about what is truly underneath the scope of the city’s fiscal problems. Making Brown, other private colleges and beleaguered hospitals the enemy of the city’s balance sheet is a grossly inaccurate but carefully calculated, union-driven move to change the focus away from pension reform for Providence.

It’s safe to assume that Carnevale, who is the recipient of a tax-free disability pension from the city police force, will not be lending the same intensity to legislation to suspend retiree COLA’s to the current battle he wants to wage on the non-profits. This is part of the tough road Taveras and Chafee will have to navigate to get the Legislature to do the hard work that will be required if there’s any hope to bring the city back from the brink. In other words, it will be up to the General Assembly to help erase the 1990s-generated black eye imposed on the city, if it has any hope to crawl out of the Black Hole.

Donna Perry is a Communications Consultant.

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