| April 29
April 29 The mayor of Providence, Rhode Island,
proposed a slight increase in city spending on Tuesday in a
farewell budget message that he is likely to tout on the
campaign trail as he runs for governor this year.
Mayor Angel Taveras, a Democrat, proposed a $678.4 million
budget for fiscal 2015 that would grow spending by 2.4 percent,
a modest increase but a strong point of recovery for a city that
many thought just two years ago would fall into bankruptcy.
The city won pension concessions in 2012 from its labor
unions that have put Providence on track to save at least $392
million over the next 25 years, he said. Taveras also struck
deals with the city's big universities and nonprofits, including
Brown University, for payments to the city in lieu of property
taxes, which they do not have to pay.
"This budget is not balanced with gimmicks. It does not
borrow to plug budget holes. It is balanced with discipline,"
Taveras told the City Council on Tuesday evening in prepared
remarks. "It keeps our promises to union employees who came to
the table during Providence's darkest hours and agreed to forego
Providence was not the only Rhode Island city facing a
The tiny city of Central Falls filed for bankruptcy in
August 2011. When it emerged about a year later, bondholders had
remained whole while retirees saw their already small pensions
cut by up to 55 percent. The case pressured retirees' groups and
unions around the state to consider giving up more benefits
rather than face steeper cuts in a Chapter 9 municipal
Even so, Taveras' budget message seemed tailor-made to
challenge his main rival for the Democratic gubernatorial
primary in September, Gina Raimondo. Raimondo, the state
treasurer and a former venture capitalist, spearheaded Rhode
Island's sweeping pension reforms in 2011.
Those reforms were hailed by many public pension analysts
for their aggressive approach to reining in costs and reducing
unfunded liabilities. They also led to lawsuits by public sector
The state reached a settlement that would have ended all the
litigation, but members of a police union rejected the deal and
mediation failed earlier this month. The state now is on track
to begin a potentially costly trial in September.
Raimondo and Taveras were in a statistical tie in an April
10 poll from Brown University. About 30 percent said they would
vote for Raimondo in the Democratic primary, and about 26
percent said they would choose Taveras. More than 35 percent
(Reporting by Hilary Russ)