City Manager Proposes Tax Hike, Service Cuts

City Manger Peter Graczykowski proposed a slew of cost-saving measures to reduce the fiscal 2012 deficit, including implementing a supplemental tax increase, eliminating recreation and senior services and signing an extended contract with United Water.

As of Nov. 4, the deficit remains at $3.2 million. The city manager, at Wednesday's Town Council meeting, presented three supplemental tax options ranging from $560,063 to $1,036,650 in new revenue. That increase would be on top of the tax hike imposed last month, which increased the average East Providence tax bill by $115, according to Finance Director Ellen Eggeman. In order to enact a supplemental tax increase, the city must apply for a state waiver. 

Maj. Steven Bannon, the , sat in the front row of the audience as residents griped about shortfalls of previous city management and pled for recreation and senior services to remain intact. Bannon has said his role is strictly advisory and he hopes to leave the city after 120 days, once he gives a report to the state on the city's financial progress. 

City Council member Michael DiGioia said the council had "no taste" for cutting services. Mayor Bruce Rogers agreed and assured residents those cuts would not be made at the next council meeting.

According to the city manager, administrators will wait to hear results from regarding potential savings from the school department and the city. They will then continue to firm up the five-year deficit reduction plan.

Supplemental Tax Increase Options

• Alternative 1: 1.09 percent to 4.25 percent (average increase of $60.61 per household) amounts to $1,036,650.
• Alternative 2: 0.84 percent to 4 percent (average increase of $45.98 per household) amounts to $798,357.
• Alternative 3: 0.59 percent to 3.5 percent (average incerase of $33.44 per household) amounts to $560,063.