Mayor Angel Taveras stressed the importance of making sacrifices as the city faces the looming threat of bankruptcy during his annual State of the City address last night. In an unprecedented gesture, Gov. Lincoln Chafee '75 P'14 attended the speech, standing behind Taveras as he spoke.
"Providence is in peril, and we must work together to save our great city," Taveras said, addressing the city's budget crisis.
Taveras compared the city's financial situation to a black hole.
"We stare into that black hole because some have yet to sacrifice," he said, noting the role tax-exempt institutions play in the city's financial crisis. In total, such establishments — the University included — own $3 billion worth of city property, preventing Providence from collecting a potential $105 million of property tax revenue each year.
"No one is exempt from the sacrifices that need to be made to save our city," Taveras said. "Tax-exempts must be part of the solution, not the problem."
Taveras announced that an agreement with Johnson and Wales University for additional contributions to the city should be finalized by the end of the week and prompted the city's other tax-exempts — including private universities and hospitals — to rise to the challenge because "they cannot be successful in a failed city."
In his speech, Taveras noted that the city recently reduced a $110 million structural deficit to about $22 million through cuts, layoffs and negotiations with local unions. "Providence is doing more with less," Taveras said, emphasizing the "sacrifices" made by the city's fire fighters, police officers, teachers and city workers.
Taveras also discussed the negotiations surrounding cost-of-living-adjustments for retirees, urging them to make concessions similar to those city workers have already made. "It is time to suspend COLAs for all our retirees," he said, a comment that was received by boos from the crowd.
"Without structural reform, in the next 10 years our annual pension payment will grow from $58.9 million to $98.7 million — a nearly 70 percent increase," Taveras said.
Taveras denounced the R.I. Supreme Court's decision to deny the city's appeal against a recent ruling that prohibited Taveras from moving all retirees onto federally-funded Medicare health insurance. "The unsustainable promise of free health care for life continues, the burden on the taxpayer increases and the window of opportunity to pull our city out of the black hole grows increasingly smaller," he said.
But Taveras attempted to instill hope in residents, urging them to be optimistic about the city's attempts to "stimulate high-tech entrepreneurship."
He also focused on his administration's accomplishments, such as revamping the Westminster Street area and extending hours at City Hall.
"We've begun the hard work of reinventing city government — making City Hall more transparent, more efficient and more responsive — in spite of the ongoing crisis we face in stabilizing our city's finances," he said.
As Taveras closed his speech, he acknowledged the grim situation that may become a reality for Providence if it fails to achieve "permanent, meaningful and difficult structural change."
Describing streets overfilled with garbage, public facilities decaying due to lack of maintenance, deteriorated infrastructure and an increase in violent crimes, Taveras said, "We will be living in a city that is barely recognizable."
"On the other side of this painful and agonizing work is the promise of a new day and a new future for our children," Taveras said.
