WOONSOCKET — Despite an outpouring of protest, the City Council voted in favor of a 13 percent supplemental tax hike for 2011 that will cost homeowners and businesses hundreds of dollars, all in hopes of keeping the teetering city from going broke in the days ahead.
Although they had not done so as of press time, councilors were also expected to approve a companion measure that will allow the city to borrow up to $6.6 million against the anticipated collateral of the new tax receipts to bring a sorely needed infusion of cash into the city’s coffers. Judging from the rate of returns on supplemental tax bills in Central Falls, city officials guess they’ll collect 65 percent of the supplemental levy at best, or about $4.3 million. Bills are due by June 15.
But the city isn’t out of the water. The emergency tax is just one prong of Mayor Leo T. Fontaine’s plan to pull the city from the brink, but he still hasn’t secured another key element, a 10 percent wage concession from all city employees for the balance of the fiscal year. Without those concessions, state officials say some sort of financial intervention for the city is likely, perhaps the appointment of a budget commission with the power to take control of budget decisions.
“I want to take this opportunity to ask you to work hard, harder than you ever have,” Councilman Daniel Gendron said. “We need to put this together, and put this together fast.”
More than 100 residents attended the session in Harris Hall, a far cry from the turnout for a public hearing last week. While many continued to express strong opposition to the supplemental tax bill, there was a note a resignation in the voices of many who approached the lectern in Harris Hall.
Some, like Alethia Forcier, urged the council to explore future reforms that spread the tax burden around more fairly.
In a refrain heard again and again, Forcier said roughly a quarter of the city’s property-owning residents are footing the bill for all the rest.
“We’re hitting the same people over and over and over again,” said Forcier. “It has to be fair. These 10,000 people cannot support the whole city of Woonsocket…I think everybody knows we need to change the dynamic in the city. We just need someone with the gall to do it.”
Larry Fitzsimmons, a member of the Woonsocket Taxpayers Coalition, echoed those sentiments, saying the city needs to find another solution to its budget problems than raising taxes. The city floated a $90 million pension bond not long ago, but it has one of the most underfunded local pension systems in the state; it borrowed another $12 million last year to erase prior deficits, yet another nearly as large has ballooned within the School Department.
“The people of Woonsocket have been paying their fair share and more,” he said. “The effort to eliminate deficits in the city is not working. Taxing the people additionally won’t solve this problem because it’s not caused by lack of revenue.”
The frustration over the runaway costs of running the schools was often bluntly framed as a case of too few working people underwriting services for the poor.
As Brian Tanney put it, “It’s time to send the freeloaders packing and put up a sign that says Woonsocket is open for business.” The crowd reacted to his comments with a brisk round of cheers.
In supporting the measure, councilors said they disliked the idea of supplemental tax bills, but the alternatives of a budget commission or bankruptcy were even less palatable.
For Councilman Christopher Beauchamp, it is the likely loss of the city’s homestead exemption that frightens him most. Yes, said Beauchamp, the supplemental tax bill will probably be devastating to some residents, possibly forcing them to lose their homes. But a receiver would surely eliminate the generous homestead exemption and cause much more widespread pain.
“I you do the math and the receiver came in and took away a portion of that homestead exemption, it would be a much greater hit than the 13 percent, and I can’t afford that,” he said. “I thought bankruptcy was a great idea and then there’s conflicting information. I’m teetering, but I want to see what we can do first as opposed to somebody mandating what we have to do. We have a little more time to fight back.”
Another supporter, Councilman Albert G. Brien agreed, saying the council must do everything it can to keep the city afloat, or the city would surely face worse economic devastation.
“I’d love to have the luxury of not being able to support this legislation,” he said. “It’s either going to be a haircut, as Judge Flanders (the receiver in Central Falls) says, or it’s going to be a beheading.”
The only opponent was Councilman Roger Jalette, who championed state intervention as a way of forcing the city to solve the underlying financial problem that local leaders do not have the stomach for.
The vote sets the supplemental tax rate for residential property at $3.13 per thousand, which means the owner of a home worth $100,000 will pay another $313. The rate for business and commercial property is $4.51 per thousand; motor vehicles and trailers, $5.81. The combined revenue raised by the increases means the actual tax increase for 2011 was a whopping 17.16 percent.
It’s all part of Fontaine’s multi-faceted plan for stop the city from going broke this month after the discovery of a $10 million deficit in the School Department’s budget. In addition to supplemental taxes and a bank loan, Fontaine is negotiating with six city employees’ unions for a 10 percent pay cut for the balance of the fiscal year. As of last night, Fontaine said the unions are still not on board.
“Unfortunately, it’s not the sole answer,” Fontaine said of the supplemental bill. “And there’s no guarantee we won’t go into receivership. If the unions don’t come forward with concessions, that becomes a fail-point in this process.”
Many city officials have pointed the finger of blame for the crisis at former School Department Business Manager Stacey Busby and former Supt. Robert Gerardi. Some say Gerardi went on an unwarranted hiring binge before he took a new job last year, while Busby was fired last week for forecasting a small surplus in late 2011 before independent auditors discovered the staggering deficit.
Members of the School Committee opted against a criminal probe of the ex-school personnel last week, but now that very panel may be in the crosshairs of political annihilation. In a move spearheaded by Council President John F. Ward, the council also proposes to let voters decide whether the school committee should be seated by appointment instead of election.
The Charter Review Commission recommended the council adopt a similar proposal in 2011, but the council passed on the offer. Amid a new round of questions about accountability and oversight in the education department, the council appeared poised to approve a measure to resurrect the proposal, which would put it on the agenda for the Nov. 6 ballot.
If approved at the ballot box, the five members of the School Committee would no longer be seated by voters. Instead, the mayor – however it is – would appoint the chairperson of the school committee. The remaining four members would be appointed by a search panel seated by the mayor.
And the council isn’t apparently ready to let go of the notion that someone should be held criminally responsible for the financial debacle in the education department. In a rebuke to the School Committee’s 3-2 vote against a criminal probe last week, members of the City Council voted to initiate an inquiry into the matter.
Councilman Marc Dubois, who was chairman of the School Committee when the panel granted Busby was a controversial contract that made it difficult for her to be fired for any reason, declined to answer questions posed to him by a spectactor last night, on the advice of City Solicitor Joseph Carroll. Since he may be subpoenaed and asked to testify under oath about Busby’s contract, Carroll said he should not make any comment on the probe and recuse himself from voting on the measure to launch the inquiry.
But Dubois said he supports the probe and wants it to go forward.
“I was disappointed in the School Committee’s vote,” he said.
The panel was also expected to approve a plan to use its powers under the City Charter to query investigative targets and other potential witnesses under oath, summoning them to appear before the panel by subpoena. It’s happened previously as recently as 2008, when Fontaine, then council president, launched a probe into alleged misappropriation of funds in the former administration of Mayor Susan D. Menard. She challenged the council’s authority in court and managed to stifle probe into oblivion, though the courts eventually upheld the council’s authority to stage such an inquiry.
The last time the council may have initiated such an inquiry in earnest was in the early 1990s, when members questioned a former police chief in connection with the 1982 murder of Doreen C. Picard. The council was looking into allegations of a police coverup in the bludgeoning death of the 22-year-old from Bellingham. Raymond “Beaver” Tempest Jr., the son of a former Woonsocket police commander and former high sheriff for Providence County, is serving 85 years at the ACI for the crime.
The council has no powers to lodge a criminal complaint against anyone. But if it uncovers what it believes is probable cause of a crime, it can turn over its findings to the state police.