“As a co-equal branch of government, the Council has a vital role in vetting the budget,” said Providence City Council President Rachel Miller to the councilmembers of the finance committee Thursday evening. “When each of us was elected as representatives of our neighborhoods, we became stewards of our City’s financial health and economic growth.”

Council President Miller was presenting the recommended changes to the FY 2024 city budget in advance of a public hearing on Tuesday, June 13. The $586 million budget presented by Mayor Brett Smiley in April included controversial increases in residential property tax rates and decreases in commercial property tax rates. Those increases and decreases are still there but they have been modified and lowered.

“While the city has not raised taxes in eight years, home revaluations caused soaring tax bills for city homeowners, especially in less wealthy neighborhoods. A drastic tax increase during a time of overwhelming inflation would create a significant burden for some residents,” said President Miller (Ward 13). “The proposed budget, which will be introduced by the finance committee on Tuesday evening, achieves savings for residents without sacrificing core services.”

The revised budget is the result of meetings between the Council and the Mayor, and based in part on feedback received from the public at a May 16 Council meeting. The budget which will not be finalized until it is vetted by the finance committee and a second public hearing.

One of the larger uncertainties in establishing a budget was the ongoing negotiations between Mayor Smiley and the non-profits, such as schools and hospitals in the City that agree to PILOTs, or Payments In Lieu Of Taxes. The Mayor is in the process of renegotiating those PILOT payments now, but the details will not be finalized before the end of this fiscal year, leaving a budget gap of $5.9M.

President Miller unveiled the following changes to Mayor Smiley’s property tax proposals:

• Residential property tax rate increases to $18.35 per $1,000 (a decrease from the mayor’s proposal of $18.70 but an increase from the current rate of $17.80)
• Commercial property tax decreases to $35.10 per $1,000 (an increase from the mayor’s proposal of $34.10 but a decrease from the current rate of $35.40)
• Homestead exemption decreases to 43% from the current 45% (increases from the mayor’s proposal of 40%) *Homestead exemption is a tax exemption for those residents living in their homes

The Council provided a chart to estimate the possible tax increases:

President Miller also presented some budget “highlights” including:

• $4.1 million in tax savings achieved by the Council 
• Hiring freeze for new non-essential jobs (This is the result of a $7.1 million shortfall in PILOT payment in lieu of taxes funds from tax-exempt city hospitals and universities) 
• $1.5 million allocated for neighborhood infrastructure projects (playgrounds, school buildings, and street safety improvements)
• Funding for a lateral Providence Fire academy and a second Providence Police academy to begin approximately in February

The Council’s priorities for quality of life investments, contingent on payment agreements, include:

• Equipping officers with noise meters to accurately enforce our existing noise ordinance.
• Enhancing the city’s ability to remove graffiti in a timely and effective manner citywide.
• Investing in the maintenance and cleanliness of our commercial corridors with regular trash collection.
• Establishing the ability to address sidewalk maintenance services in-house.
• Increasing capacity and coordination in our network of Recreation Centers, including increased
• investments in pool maintenance.
• Adequately staffing the city’s First Source program.
• Expanding the city’s capacity to coordinate social service delivery, especially to our residents whoare experiencing homelessness.

“The consistent message we’ve heard from Providence residents is that they cannot afford to pay more taxes, and they expect more from the taxes they currently pay,” said Councilmember Helen Anthony (Ward 2), Chair of the Finance Committee.

What’s next?

• The amended redlined Sub-A ordinance will be posted by Monday, June 12.
• For the first time, a second public hearing is scheduled for next Tuesday, June 13, at 5:30 pm at the City Hall.
• Finance Committee votes on the amended budget (likely the week of June 12).
• City Council must approve the amended budget twice to take effect.