The Newport City Council gave final approval on May 27 to a $134 million budget for the fiscal year that began July 1, closing a monthslong process that ended with a property tax levy increase nearly double what the city administration originally proposed — and concentrated largely on owners of non-owner-occupied properties.
The council voted 6-1 to adopt the spending plan, with Councilor David Carlin casting the lone dissenting vote. Carlin said he disagreed with how the administration handled oversight and communication throughout the budget process, according to Newport This Week.
The budget's most consequential late change came from Councilor Xay Khamsyvoravong, who proposed raising the tax levy increase from an initial 1.9 percent to 3.9 percent. The levy is the total amount of property tax revenue a municipality collects; state law generally caps its year-over-year growth at 4 percent unless the General Assembly grants an exception. Under Khamsyvoravong's amendment, full-time residents enrolled in the city's tiered residential tax program would see roughly a $100 decrease in their property tax bills, while part-time residents would see bills rise by about $1,100 on average, according to Newport This Week's reporting. Newport has divided its residential tax rate into full-time and part-time classifications since 2023.
Khamsyvoravong defended the approach publicly, saying the city "needs to keep funding basic infrastructure" and that the council had been "forcing ourselves into a zero-sum equation as if we are cash poor when that is not the situation." The exact per-$1,000 tax rates adopted for FY2027 were not independently verifiable in city records reviewed for this story; only the percentage change in the overall levy and the estimated dollar impact on residents have been confirmed through local reporting.
The budget season began, per a city news release dated March 17, with a first public workshop on March 30 focused on police, fire and harbor spending, followed by an April 1 session on alternative funding sources, including a possible new stormwater utility.
That process unfolded alongside a worsening financial picture at Newport Public Schools. Superintendent Colleen Burns Jermain told the School Committee in March that the district anticipated a $1.8 million shortfall for the remainder of the school year, plus an additional $1.1 million deficit forecast for 2026-27 — figures that shifted repeatedly as the process continued. By April, the estimate had narrowed to roughly $2 million; by May, Jermain reported a $3.8 million deficit for the coming school year alongside a separate $2.8 million shortfall in the current fiscal year, the latter triggering a state requirement that Newport file a deficit reduction plan with the Rhode Island Auditor General.
City Manager Colin Kennedy said in the spring that fully funding the school district's original budget request without other changes would have pushed the tax levy increase to 4.4 percent — above the state's 4 percent cap and requiring approval from the Rhode Island General Assembly. Covering the gap through other parts of the city budget, he said, would keep the increase under that threshold.
The School Committee, including Chair James Dring, voted against the district's proposed budget on April 14, objecting to a planned 13 percent increase in local school funding meant to close what was then estimated as a roughly $5 million shortfall.
By late May, the district had notified 17 teachers of layoffs. Jermain said the City Council and administration "have been very supportive and are trying to work with us." The deficit reduction plan filed with the state auditor general includes, according to What'sUpNewp's reporting, potential cost-saving measures such as closing Thompson Middle School and consolidating grade levels between Pell Elementary and Rogers High School — described as a potential measure within the plan, not a finalized decision.
By late June, with a proposed state loan option no longer available, the district still faced a roughly $2 million shortfall heading into the new fiscal year. Jermain, whose last day in the role was June 30 after 12 and a half years, said she expected to recall at least six of the 17 teachers who had received layoff notices. Interim Superintendent Peter Sanchioni began July 1.
Jermain has been a vocal critic of Rhode Island's school funding formula, arguing it distributes money based on enrollment rather than student need — a criticism that has not drawn a public response from state education officials, according to available reporting.
Several questions remain open as the new fiscal year gets underway: whether the Auditor General has formally responded to Newport's deficit reduction plan and its Thompson Middle School provision, the final tally of teacher layoffs versus recalls, and whether a long-discussed Newport-Middletown school merger question will appear before voters, a timeline Jermain said in May looked unlikely to move before 2027.
</body> <parameter name="excerpt">Newport's City Council closed out its FY2027 budget season by nearly doubling a proposed tax hike and shifting the burden to part-time residents — even as the school district keeps laying off teachers and weighs closing a middle school.