House Hears Woonsocket Supplemental Tax Bill Today

As Woonsocket awaits the full House decision on a bill authorizing the city to raise $6.6 million with a 13 percent tax hike today, alternative plans to fix city finances are brewing.

During the , Woonsocket Finance Director Thomas Bruce noted the hike is a permanent, recurring increase. On Wednesday, he said the $6.6 million addition to the annual tax levy is entirely devoted to school department funding. "The solution has to be a permanent solution to repair the structural deficit," Bruce said. The school department was underfunded last year and this year, to a combined tune of about $10 million, he said. The School Committee's recently drawn draft budget stands at $69.8 million for FY13, which is a much closer estimate of the true cost to operate the school department than the one the city's been working with so far, he said.

While offering their support for the supplemental tax bill on the basis of "professional courtesy", Reps Jon D. Brien (Democrat - District 50, Woonsocket) and Lisa Baldelli-Hunt (Democrat - District 49, Woonsocket) each had their own plans for fixing city finances.

Baldelli-Hunt suggested the city should go straight to receivership. Should the supplemental tax fail to solve the city's crisis, said Brien, he agreed the city ought to go straight to recievership.

During Monday night's City Council meeting, Council President John Ward, reading from state law, noted that only a state-appointed budget commission can request a reciever to be appointed. City officials can't request a receiver, he said.

However, the Fiscal Stability Act, under 45-9-8, does allow the RI Director of Revenue Rosemary Booth Gallogly to appoint a receiver in a fiscal emergency: "In the event the director of revenue determines, in consultation with the auditor general, that a city or town is facing a fiscal emergency and that circumstances do not allow for appointment of a fiscal overseer or a budget commission prior to the appointment of a receiver, the director of revenue may appoint a receiver without having first appointed a fiscal overseer or a budget commission," the passage reads.

Bruce said that while Gallogly could bring the city straight to receivership, the criteria for that aren't met right now, and will be skirted if the supplemental tax is approved by the House. Also, he said, city officials are already following the Department of Revenue's lead to the letter, which wouldn't be much different under a budget commission or receivership. If state officials felt the city ought to be in recievership, Bruce said, "I believe we would be there."

Baldelli-Hunt also said she has drafted a bill creating a commission to study the causes of the school deficit that created the city's prolonged perch on the edge of insolvency.

On April 2, the City Council voted to conduct their own . The Council will use its subpeona power to call on past and present school department employees to answer questions. The cost will be about $10,000 and will include a lawyer to assist with the probe, and a stenographer to record the proceedings, paid from the Council's legal expenses fund.

At the time, City Council President John Ward, who proposed the measure, said he believes the shortfall resulted from state cuts to funds and "inadequate accounting," not criminal action.

Brien's alternate plan is to introduce a bill authorizing the city to borrow from its pension fund to raise money to stave off insolvency.

Bruce said that while he has a lot of respect for the representative, his idea won't work. "Borrowing does not solve the problem," Bruce said. That money would have to be paid back, and the city would only get it once, setting them up for the same problem next year.

The option was suggested during a by City Councilman Albert Brien. At the time, Bruce said he didn't think borrowing against city pension funds was a good idea, and that it was likely not legal. 

Larry Berman, communications director for the office of the speaker, said the House will open session today at 4 p.m., and will likely begin discussing the supplemental tax bill at 5 p.m.

The Woonsocket Taxpayer's Coalition has chartered a bus for anyone who would like a ride to the State House for the hearing to protest the supplemental tax bill. The bus leaves from , 176 Green St., at at 2 p.m.