Providence City Council Approves Revised Fiscal Budget

News Summary

The Providence City Council has passed a revised budget for fiscal 2026, opting for a 5.85% tax levy increase instead of the projected 7.5%. This decision aims to address ongoing fiscal challenges and community concerns about tax impacts, accommodating financial repercussions from a significant public school funding settlement. Adjustments to the budget focus on reducing the tax burden for owner-occupied multifamily homes and balancing the needs of residents amid economic pressures. Public hearings will facilitate community participation in the process.

Providence—The Providence City Council has approved a revised fiscal 2026 budget that proposes a tax levy increase of 5.85%, a reduction from the earlier suggested 7.5% by Mayor Brett Smiley. This decision comes as the city navigates ongoing fiscal challenges and aims to balance the budget while addressing community concerns regarding tax impacts.

The new budget, which must pass two additional votes in the City Council scheduled for July 7 and July 14, aims to accommodate the financial repercussions of a $15 million settlement related to public school funding. Approximately $11 million of this settlement needs to be included in the budget, leading to the necessity of the tax levy increase. The amended levy is still above the standard 4% cap imposed by state law, which had previously been circumvented with legislative approval by the Rhode Island General Assembly for a maximum levy increase of 8%.

City Council President Rachel Miller and Finance Chairwoman Helen Anthony announced the adjustments, highlighting the outcomes of negotiations with Mayor Smiley. The revised budget focuses on reducing the financial burden on owner-occupied multifamily homes, decreasing the average tax increase from an initial estimate of 16% to 6%. This brings the tax rate closer in line with single-family properties, potentially saving owners of multifamily homes around $400 compared to the mayor’s original proposal, which had faced significant backlash for disproportionately impacting smaller landlords while offering tax cuts to commercial properties.

Providence officials have expressed their commitment to ensuring that the tax increases do not unduly affect working families as they strive to address the budget shortfall. The overall tax rates for different property types will see a decrease, although substantial increases in property assessments may balance out these reductions. Notably, non-owner-occupied properties with two to five units will witness the most considerable average tax increase, projected at 13%. Meanwhile, both owner-occupied and non-owner-occupied single-family homes will see their tax increase rise from 4% to 6% under the revised budget.

A public hearing for the revised budget is set for June 30 at 5:30 p.m. in City Council Chambers. The city will provide Spanish translation services and free childcare to maximize community participation during the hearing.

As delays in finalizing the budget loom, the issuance of property tax bills for the new fiscal year is expected to be postponed. If tax bills are not dispatched by mid-July, the city may encounter delays in payments to vendors, grantees, and the School District, which could disrupt essential services within the community.

The revised budget also restores the city’s Sustainability Policy Associate position, responding to local concerns about climate change initiatives. Additionally, a proposed fee for bulky item pickups has been eliminated following resident feedback on its potential negative impact. Such changes reflect a commitment to community engagement in shaping the budgetary process, with city leaders citing updates in revenue projections and state aid as influential in the decision to lower the tax levy increase.

Moving forward, Providence officials are dedicated to crafting a fiscal strategy that responsibly addresses the city’s financial realities while also considering the needs of its residents. With upcoming public discussions and Council votes, the city remains focused on building a budget that supports sustainability and equity amid ongoing economic pressures.

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Additional Resources

• WPRI: Providence Budget Heads to Full City Council
• Rhode Island Current: Providence City Council Leaders and Smiley Agree to Seek Tax Levy Hike
• GoLocalProv: Smiley and City Council Agree to Major Tax Hikes
• Providence Journal: Providence Will Increase Tax Levy by 5.9%
• Turn to 10: Providence Homeowners Face Potential Tax Hike
• Wikipedia: Providence, Rhode Island
• Google Search: Providence tax levy increase
• Google Scholar: Providence budget tax levy
• Encyclopedia Britannica: Providence
• Google News: Providence budget tax hike