Last Wednesday, Mayor Jorge Elorza announced that Providence is expecting a $10 million surplus for fiscal year 2017. In a press release, the mayor said that 2017 was the second year in a row that Providence has had a fiscal surplus, this year’s estimated at $10,206,604.
The Elorza administration is expected to eliminate cumulative deficit, the first rainy day fund since 2011. After FY 2015, the city had a total deficit of $13,445,000, which had accumulated in years past. At the end of FY 2016, the city’s deficit decreased approximately $10,000,000, leaving the current deficit at $3,158,000.
This 2017 fiscal surplus will eradicate all of the city’s deficit. The rest of the fund will be left to a “Rainy Day Fund,” which can be drawn from if needed in future years.
“The city realized savings due to earlier pension payments and reduced spending on operational expenses where opportunities existed,” wrote Press Secretary Victor Morente in an email to The Herald. The surplus can be “attributed to realistic budgeting, continued strategic cash management, more efficient and robust tax collections, better departmental revenues and attrition savings in salary expenditures,” he added.
Morente said that “the FY 2017 budget actually decreased the residential and commercial property tax rates, although a state-led revaluation of property values showed a rise in property values in the capital city.”
Councilman David Salvatore said that a deficit “completely hinders the city’s ability to do business,” and this year’s positive fund balance sends a positive message both to businesses, who are looking to expand in the city, and to tax payers, who saw that the city had not solely relied on their taxes to eliminate the deficit.
Salvatore said that over the course of the last several years, the city departments were asked to “do more with less.” He says this responsible budget spending contributed to the surplus alongside the city’s increase in revenue.
The money from the Rainy Day Fund will be reinvested into the city’s public safety, infrastructure and education that is conducive to 21st-century learning, said Salvatore. In a follow up email, he added that affordable housing should be “an area the city should also invest taxpayer money in.”
