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House to take up supplemental tax bill

May 12, 2012

WOONSOCKET — 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 “a possible vote” 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 there’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 city’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 legislature’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 it’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 — 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 city’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.
Tuesday’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.

Comments

Put labor contracts and pensions at risk?

May 12, 2012 by Marcel (not verified), 2 years 24 weeks ago
Comment: 1290

Wow, what about the risk of bankrupting individuals who can't afford this supplemental tax bill? Property taxes have been raised a few times in the last decade and spending stayed at a steady pace.

Maybe it's time to cut city services to the real bone and ask those with pensions or working on pensions to make some concessions. City services that are absolutely necessary could be put up for bid to private entities for a few years. It's a small item but cafeteria monitors can again be teachers who rotate for the assignment or get a parents group formed to do the task. That's what a charter or private school would do to stay solvent.

The city officals should avoid this supplemental tax bill as much as they are trying to avoid bankruptcy. If it fails, bankruptcy would allow it to renegotiate items that are busting the budget.

I use to take pride in owning property in Woonsocket. Now it's become a cancer for my family.

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