Taveras budget hinges on pension plan

Monday's budget address by Providence Mayor Angel Taveras, sets the stage for a final debate about how to fix the capital city's budget problems, before the start of the new budget year in July.

Although city council leadership is behind the plan to reform pensions and ask tax exempt institutions, like colleges and hospitals to pitch in, Mayor Taveras may have a hard time getting everyone on board.

“The threat of eventual an unavoidable bankruptcy will continue to plague our city if we do not accomplish pension reform.” said Mayor Taveras.

Those planned reforms are the lynchpin of a 638-million dollar budget that is virtually flat in spending and calls for no significant layoffs or staff reductions, to help settle the city's financial fix.

The reforms are being called the Providence Pension Protection Plan.

The plan calls for the suspension of all COLAS, and would require retirees to contribute more towards their pensions than they currently do.

If it's implemented in its entirety, it would save the city 16-million dollars annually.

The plan is considered crucial by not only the mayor, but also by the leadership of the city council.

“The city really has a choice in front of us and the city has to go through with these reforms otherwise there are much dire consequences.” said Councilman Seth Yurdin.

Not everyone though is so gung-ho about the pension plan.

The president of Providence's firefighters union, Paul Doughty, doesn't like the plan that's been put on the table, or the way he says its being forced down his membership's throat.

“We have demonstrated that we are committed to try and solve this, I understand how quickly it needs to be done and the scope of what needs to be done, but we will not negotiate with a gun to our head.” said Doughty.

The other major factor in the mayor's proposed budget is the inclusion of money from tax exempt institutions that he assumes the city will receive, from local colleges and hospitals.

And although initial contact with tax-exempts has been positive, the mayor says he will get money from them, whether they give it willingly, or not.

“We will work to pass legislation allowing cities and towns to collect a fee from our tax exempts for the critical services that we provide to everyone in our city.” said Taveras.

Mayor Taveras made it clear that there would be no increase in taxes to help balance the budget.

There will also not be any funds taken out of the school department's funding, in-fact due to state and federal funding increases, the school's budget will increase by 19-million dollars in the 2013 budget.