Providence Mayor Brett Smiley unveiled his proposed budget for 2025 on Wednesday evening, proposing a 3% increase from last year’s budget of $598.6 million.
Although the budget, which the mayor says is balanced, will look fairly similar to last year’s, the mayor is proposing several notable changes, including funding the Providence Public School District at its highest amount in seven years, adding a police academy class, and opening three positions for storm-drain cleaners. Revenue is also projected to look similar to last year.
The mayor has proposed not raising taxes on homeowners or businesses, and spokespeople for the mayor’s office in part attributed the city’s comfortable level of income to the voluntary payments in lieu of taxes its educational and health institutions pay to the city, with the notable exception of Lifespan, who has not made a payment in roughly two years.
School district
Among the funding amounts proposed Wednesday was a $3 million dollar increase to the funding Providence contributes to its local schools. Smiley proposed spending roughly $133 million. The contribution is separate from ongoing litigation between the City of Providence and the Providence Public School Department.
Police department
The mayor is proposing raising the police budget by more than $7.5 million dollars to $114 million. Spokespeople for the mayor said most of the money is associated with Police-union mandated pay raises and other benefits, though some of it will also go to increased funding for new positions and an added police academy class. According to the spokespeople, the hope is the department can grow to a total of 450 officers, a rise from its current number at 423.
Storm drain cleaners
Intensifying rain storms due to climate change are increasing flooding in Providence, in part because storm drains get backed up with debris and floodwater pools in the streets. Smiley wants to hire three full time employees to be tasked with clearing storm drains during emergency rain storms.
Tax and revenue
Mayor Brett Smiley is not proposing raising taxes on homeowners. However, and it’s a big however, 2024 is a tax reassessment year so homeowners are still likely to see taxes rise. Smiley is opting to keep the rate for owner-occupied properties at a rate of $10.46 for each $1,000 in tax-assessed value. Non-owner occupied households (including absentee landlords) will remain at $18.35 for each $1,000 in tax-assessed value. Commercial taxes are also set to remain the same at $35.10 for each $1,000 of tax-assessed value.
This year the city is also proposing changing from a homestead exemption for homeowners who live at their properties to an owner-occupied status. This is not a financial change, the city says, just a way for the lower rate of taxes to appear on home-buying websites such as Zillow. The city hopes that by doing so, it can attract a greater number of interested home buyers.
Spokespeople for the city suggested overall revenue will remain the same. The city earns a large portion of its revenue from its Payment in Lieu of Taxes program, a voluntary “tax” payment deal the city strikes with its private higher-educational institutions and its hospitals. According to spokespeople for the city, institutions had never missed a payment until Lifespan stopped paying its share about 2 years ago. During his speech, the mayor called out the institution in an attempt to strike a new deal.
“To the Lifespan leadership team – it’s time to come to the table with a meaningful contribution,” he said. “Hospitals throughout the region have made meaningful long term commitments to their host communities, you can too.”
Through a spokesperson, Lifespan declined to comment.
A balanced budget
The mayor and his staff described this budget as balanced, saying they did not rely on federal COVID relief dollars to fill any gaps. Instead, they took the remainder of that funding, which must be assigned to programs by this year, and set it aside for Providence’s affordable housing trust.
“We responsibly weaned ourselves off those funds previously used to fill budget gaps by making difficult decisions to get to where we are today,” Smiley said. “We are not experiencing the dangerous fiscal cliff that communities across the country are experiencing as they develop their budgets this month.”
What’s next
The budget must be reviewed and approved by the Providence City Council before taking effect on July 1, 2024, the start date of the next fiscal year.
This story has been updated to note that Lifespan declined to comment.
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