Missteps in Cranston. Revenue Loss in North Providence. 7% Tax Hikes on Both Tables — Ethan Shorey

Publisher’s Note: Cranston’s “missteps” largely include the Council and Mayor putting blame on the former CFO for misleading both on the financial situation of the city – North Providence’s path has been quite different.

by Ethan Shorey – “This story was first reported by Ethan Shorey and The Local Insider, at www.thelocalinsidernews.com.” – The Local Insider and RINewsToday are members of the RI News Collaborative.

Two big hits cause budget damage in North Providence

NORTH PROVIDENCE – A pair of sizable financial hits are to blame for a major tax increase proposed in this town.

Mayor Charles Lombardi and Finance Director Maria Vallee said a proposed 7 percent tax increase would exceed the state cap of 4 percent, requiring Town Council members to seek authorization from the General Assembly if they choose to do so.

The two substantial costs to the budget are a $3.3 million hit in revenue as a result of Fatima Hospital selling to a new buyer, and a $3.7 million bond payment as the first one owed on a new elementary school project.

According to Lombardi and Vallee, this is a very lean budget otherwise, with these two big-ticket items plus employee fringe benefits causing almost the entirety of the spending increase and Lombardi’s proposal of a $137.6 million budget for fiscal year 2026-2027 starting in July.

Lombardi said he knows people will be upset, but he’s reminding them that the town had gone many years without a tax increase. He said he’s also stating how the 90-cent increase last year and $1.45 increase proposed this year still only adds up to about 24 cents per year over a decade.

The $1.45 would be per $1,000 of assessed value on a property.

“It’s not like a Cranston deal where it’s mismanagement,” he said. “The people voted for the schools, so now we’ve got to pay. Fringe benefits have also gone crazy.”

On a $500,000 home, that $1.45 would add up to a $725 increase in taxes for that homeowner. That number wouldn’t include any tax exemptions, including 20 percent for qualified resident owners.

The 7 percent increase comes after the results of the town’s statistical revaluation of all properties is accounted for. With such a revaluation, a community must lower the property tax rate by an equal number to the increase in the value of the tax base.

The mayor and the council were scheduled to go through the budget with department heads on Friday, May 1, but that session was canceled and rescheduled, likely for the coming week. They’ll then settle on a budget figure to go to the General Assembly with a resolution on.

Lombardi said he’s doing his best with this budget as they continue to face the obstacle of being the community with the smallest amount of open land space left to be able to develop a larger tax base.

“We continually do more with less,” he said.

An opening hearing on the budget drew a scant crowd early last week.

“The sad part in this business is everyone will forget all the years without a tax increase,” said the mayor.

Asked about using a portion of the town’s confirmed rainy day reserves fund of $17.5 million to offset some of the burden, Lombardi and Vallee said there are strict guidelines about how such money is used. Lombardi said it would be irresponsible to use it for costs that are going to keep coming up, and it should only be used for a true emergency.

Pressed on whether such an increase constitutes an emergency, he said it probably would, but even then the funds are only supposed to be used for one-time expenses such as a special project or fire truck.

“It would be irresponsible for an issue that’s going to be recurring,” he said.

Vallee said the budget is so lean this year that those types of expenditures don’t exist, and even if they did need to buy vehicles or some other big-ticket item, it wouldn’t equal $5 million.

“There’s nothing in there,” she said.

It could be used for something such as covering the repaving budget, she said, but that cost is going to come up every year.

Lombardi said he continues meeting with hospital executives in hopes of some solution for recouping the town’s loss in revenues.

The mayor said he personally can’t see using some of that money, but it’s ultimately going to be the discretion of the council what members should do in moving forward their joint budget plan.

Lombardi said he doesn’t necessarily disagree with the sentiment among many that the reserve funds should eventually be spent for the benefit of taxpayers.

“It’s got to be used sometime for something,” he said, and that will have to be a question that’s asked and answered.

Council President Dino Autiello said this is the most challenging budget the town has faced in more than a decade.

“Despite that, we remain committed to delivering responsible budgets that respect our taxpayers,” he said. “The current proposal includes a 7 percent tax increase, which would require approval from the General Assembly. To stay within the 4 percent tax cap, the Town Council must identify and cut approximately $3.9 million, an extremely difficult task that will require careful, thoughtful decisions.”

Added Autiello, “I truly believe many of the pressures we’re facing are structural, particularly within school funding. Our School Department does a good job managing its finances, but it is often constrained by state mandates that limit flexibility at the local level.”

He said it’s time for the state to take a serious look at revising the funding formula, addressing the rising costs of out-of-district transportation and ensuring special education is adequately funded.

These aren’t local problems alone, but require state-level solutions, said Autiello.

“At the same time, the loss of tax revenue from Fatima adds another layer of strain to an already difficult situation,” he said. “Even with these challenges, I have full confidence that the council will do everything possible to protect our taxpayers, while continuing to provide the services our community relies on.”

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