Mayor Taveras: Providence Could Go Bankrupt

The mayor of Providence said bankruptcy is on the table, and council members echoed that Thursday.

The city is thirty million dollars in the hole for this year, and is on track to run out of money by the summer if drastic changes aren't made.

The warning from the mayor was a strong one. There's  a few months left to fill the budget hole. He's calling out to hospitals and colleges that don't pay taxes to do their part and for retirees to make some tough decisions.         

Providence may soon join Central Falls in bankruptcy. “It will be felt around this state,” said Mayor Taveras, “I will do everything in my power to stop it from happening, but we have some real issues.”

Mayor Taveras said the capital city has a 30 million dollar gap in this year's budget, and will run out of money by June if something doesn't change dramatically.

“If we don't have change from where we are right now,” said Taveras, “If we don't have significant change, there will be no other option.”

The mayor wants to cut retiree benefits and force tax exempt institutions like colleges and hospitals to pay taxes. His chief of staff spoke about those options at a finance committee meeting Thursday night, starting with COLAS, that Mayor Taveras and staff members call raises.

“They have been getting a raise of three, five or six percent for a long time and as we made very clear this morning cannot continue any longer,” said the mayor's Chief of Staff Michael D'Amico.

Some retirees are making two or three times more money than when they retired. For instance, a former fire chief retired with a salary of 63-thousand dollars. But over the years and with the compounding COLA's he's now getting almost 200 thousand dollars a year.

“While our city workers, police officers, and firefighters are going without raises, these retirees enjoy the luxury of 5 and 6 percent compounded raises every year,” said Taveras.

The mayor is considering a supplemental property tax as a last resort. However, Council President Michael Solomon said the city council will never go for that.

“People are paying enough in taxes and we feel that we're not going to go back to our constituents and ask them for more,” said Solomon.

Mayor Taveras has scheduled a town hall meeting with city retirees for March 3rd. It'll be at the convention center and streamed on-line for retirees who live out of state.