WOONSOCKET â€” In a hearing that may, for better or for worse, chart a course for the financial future of the city, the House Finance Committee will take up enabling legislation Tuesday that could clear the way for a 13 percent supplemental tax bill.
In a statement, Larry Berman, communications director for the House, said â€śa possible voteâ€ť on the bill could come after the hearing, scheduled for 2 p.m. in Room 35, located in the sublevel of the State House. But State Rep. Jon D. Brien told radio station WNRI Friday that thereâ€™s no guarantee the committee will act favorably upon the bill or that the full House will pass the measure if it reaches the floor.
The Senate has already passed the measure, which Mayor Leo T. Fontaine says is an essential component of the cityâ€™s plan to keep from going broke.
The hearing, Fontaine said this week, already comes two days after the city had planned to issue the supplemental tax bills, based upon the legislatureâ€™s okay.
At issue is a $10 million deficit in the School Department, which could run out of money before the end of the school year without an infusion of cash. Durham School Services, the business contractor, has agreed to continue busing students for the remainder of the school year even though itâ€™s owned more than $1 million, but other unpaid contractors are threatening legal action, officials say.
Fontaine said the city has already cut a deal to borrow $3.2 million from Citizens Bank on condition lawmakers pass the enabling legislation to pass supplemental taxes â€” the collateral for the loan. The funding would provide six weeks of vital bridge financing to keep money in city coffers until revenue from the supplemental tax bills begins arriving.
Concessions from labor, departmental consolidations and other cuts are also essential components of his budget-balancing plan, according to Fontaine, who is also hoping the legislature provides some relief from various state mandates that are driving up local education costs.
Despite the cityâ€™s precarious fiscal position, state officials have refrained from intervening in its fiscal affairs, as they have in Central Falls and East Providence. Under the Fiscal Stability Act of 2010, the state can appoint an overseer, a budget commission or a receiver to intervene in the management of fiscally distressed municipalities. Each option comes with progressively more sweeping decision-making powers including, as a last resort, the authority to file for bankruptcy. That would put labor contracts and pensions at risk.
A budget commission, which some see as the most likely alternative for the city if the supplemental tax plan falters, could cut the salaries of elected officials (but not union employees, at least not without collective bargaining), consolidate departments and shut down programs, like library services.
Tuesdayâ€™s hearing will be televised live by Capitol Television, which can be seen on Channel 15 by Cox and Full Channel subscribers, and on Channel 34 by Verizon customers.