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Problems facing state, Providence, and Congressman Cicilline

March 8, 2011

(By JOHN HAZEN WHITE)

There are two types of political disfunction that harm the body politic. One is corruption, where elected officials engage in illegal activities, and the other is deception, where elected officials don't tell the truth.
The struggling City of Providence has been subject to both from its past two mayors. With a revealed deficit, thanks to an independent audit, showing the city's finances to be in total shambles to the tune of $70 million (this year) plus another $110 million for next , deception is proving to be just as harmful as corruption, and maybe more so.
That's why former Mayor David Cicilline probably wishes he was on the other side of the continent in Washington state and not just due south in Washington D.C. Though our freshman congressman denies hiding the facts about the true nature of the city's finances, obviously so they wouldn't have destroyed his chances of winning the house seat last fall, his fingerprints are all over the evidence. There were clear warnings about the city's true financial state made by the city's auditor back in 2009 and again late last year. At the time Cicilline denied it all and claimed that he had balanced the budget every fiscal year, as required, which he had if one didn't look too closely (unfortunately, the city council did not look too closely). What he had in fact done was raid the city's reserve (now down to a paltry $2 million from $17 million in 2009) and put up a smoke screen of phony figures. As of this writing he's still stonewalling, refusing to admit that anything was out of order or that any of it was his fault.
Out of order the city's finances certainly are. Angel Taveras, the new mayor, provided full disclosure last week on what he called a "category 5" hurricane situation. He's already fired all the city's teachers and will only hire back as many as the city can afford after it closes a number of schools. Other city employees will lose their jobs. The sheer magnitude of the problem will force union concessions on pay and benefits. Home and business owners will probably see another property tax increase, even as their properties continue to lose assessed value. The city, which has already borrowed $40 million, and its going to have a hard time borrowing the other $29 million it presently needs to close its budget shortfall. And its unfunded pension and healthcare liabilities for retirees are out of sight, with Taveras already saying that benefits will have to be cut.
In Cicilline's and the city's defense, the recession and the loss of a large chunk of state aid to education, plus the state's car tax pullback, affected the city's ability to keep pace. So too the drying up of federal stimulus funds. But that's why we elect mayors or appoint city managers in the first place; to steer the ship. In Providence's case, the charge now being made that Cicilline was not paying attention and then did a cover-up of the facts is supported by the simple truth that he was running for higher office. Coming clean on the true state of Providence's finances was not going to get him elected to Congress. But how did he think he could outrun the consequences?
Now he's already a lame duck less than three full months into his two-year term. He has no credibility. A passel of Democrats and John Loughlin, his Republican opponent, are already sharpening their knives for 2012.
Providence's problems add another dead weight to the state's situation, dire enough in itself. Whether Providence will eventually need to be taken into receivership, like Central Falls, is now an open question. Governor Chafee certainly has his hands full, and we await his own call to reckoning this week as his unveils his budget proposal. Hold onto your seat.
John Hazen White Jr. is president and CEO of Taco, Inc. in Cranston. He blogs at www.lookoutri.com.

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