PROVIDENCE, R.I. (WPRI) — Rhode Island’s General Assembly leaders say the chambers do not plan to enact cuts in aid to so-called “distressed” communities that Gov. Gina Raimondo proposed prior to the pandemic.
“We have been holding daily meetings and working diligently to finalize the budget,” Senate President Dominick Ruggerio and the incoming House speaker, Joseph Shekarchi, said in a joint statement. “Although the negotiations are still ongoing, the Senate and House will not cut aid to distressed communities.”
Raimondo had in January proposed cutting the aid in half, from roughly $12 million to $6 million. Her administration at the time cited an economy that was the “strongest it’s been in a generation.”
The distressed-communities aid currently goes to Central Falls, Cranston, North Providence, Pawtucket, Providence, West Warwick and Woonsocket, a list based on a calculation of property tax burdens compared to the income of the people who live there. The Distressed Communities Relief program was first created in 1990.
Towns and cities quickly spoke out against the cuts in January, urging lawmakers not to enact them in the final fiscal year 2020-21 budget. A budget vote typically happens in June, but due to the pandemic the General Assembly still hasn’t finalized the plan for the fiscal year that started July 1.
The lack of a state budget has caused problems for municipalities like Providence, which rely on millions in state aid. Amid the uncertainty about how much the city will receive, Providence has yet to pass its own budget for the current fiscal year, either.
Adding to the financial problems: without an enacted budget, the Raimondo administration did not provide the usual lump sum of aid to cities at the end of July, instead doling out month-by-month payments, and utilizing Raimondo’s unapproved proposed cut to the distressed aid instead of the amount from the previous year.
Raimondo’s decision led Cranston Mayor Allan Fung to file a lawsuit against her administration in late October, and the Providence City Council sent a letter to Raimondo and Director of Administration Brett Smiley earlier this week, urging them to reconsider.
“The city of Providence and its residents are living in extremely difficult and uncertain times,” said the letter, which was signed by all 15 members of the council. “This pandemic has disproportionately inflicted harm upon our communities. Our families are suffering from some of the highest COVID infection rates in the state, are most at-risk of experiencing joblessness and/or homelessness, and are being asked to adapt to a world that hasn’t offered them the tools and resources to keep pace with changes being demanded of them.”
“If the City of Providence has ever found itself in a time of ‘distress,’ now is that time,” the letter continued.
Providence traditionally applies the July 31 lump sum of state aid money — which also would have included roughly $30 million in payment-in-lieu-of-taxes (PILOT) aid that helps make up for the lack of property taxes paid by tax-exempt hospitals and universities — to the prior budget year. Without it, the city is still working to close the budget gap from last fiscal year, while also trying to figure out how to pass a balanced budget for the current year when revenue is way down.
Since July 1, the state has paid Providence $14 million in month-to-month PILOT aid, according to Department of Administration spokesperson Robert Dulski, plus $1.1 million in distressed aid. (The city received more than $5 million in distressed aid last year, and Raimondo proposed to cut that amount to $2.7 million.)
The city councilors also objected to the decision to provide the month-to-month funding using Raimondo’s proposed cuts, rather than last year’s number.
In response to the council’s letter, Dulski said it would be “irresponsible” to dole out the monthly payments at last year’s amount, even though there’s no budget yet for this fiscal year.
“State revenues have fallen and therefore, the state would run out of money if we continued spending at last year’s level,” Dulski said in an email. “We have taken a balanced approach by funding cities and towns and other recipients of state aid one month at a time.”
“The administration is optimistic that the Legislature will convene soon and enact a balanced FY 21 budget,” Dulski added. “At that time, this uncertainty will be resolved, allowing us to fund local aid and make payments in the manner they are accustomed to.”
The House and Senate are tentatively expected to convene later this month to pass a budget, potentially during the week of Dec. 14.