Providence Unveils Proposed Budget for Fiscal Year 2026

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City officials and community members participate in discussions surrounding the proposed budget for Providence.

News Summary

Mayor Brett P. Smiley has proposed a $624 million budget for Providence, marking a 4% increase from the previous year. Key allocations address educational commitments and a $15 million school district settlement. To fund these initiatives, the city is seeking an increase in the tax levy and has announced budget reductions, including staff eliminations. Property tax adjustments, new revenue sources from fines, and community support are also part of the proposal, with legislative actions planned to gather public feedback.

Providence

The city of Providence is facing a significant fiscal year in 2026 with a proposed budget of $624 million, unveiled by Mayor Brett P. Smiley. This budget begins to address various obligations, including a $15 million settlement with the Providence Public School District. The fiscal plan is expected to be finalized later than the July 1 deadline, with the first full council vote scheduled for July 3 and a final vote on July 17.

This proposed budget marks an approximate 4% increase in spending from the current fiscal year, aiming to cover new educational commitments and operating expenses. A notable portion of the budget emphasizes educational investments, representing the largest funding boost for city schools since 2006.

Meeting all terms of the November settlement with the Rhode Island Department of Education will require an additional $25 million in revenue. To fund the proposed budget, the city is relying on a $29 million increase in the tax levy, with $23 million sourced from new revenue streams.

To address funding needs, the city is seeking approval from the General Assembly to exceed the state-imposed 4% cap on tax revenue, proposing a 7.5% increase in the tax levy. Despite expectations of rising home values due to reassessments, the proposed budget is designed to lower tax rates for all property types.

Property Tax Impacts

Homeowners can expect a projected average 4% increase in their property tax bills, which equates to an additional $13 per month or $156 annually. Notably, the proposed budget includes significant adjustments for property tax exemptions, increasing by 25% for seniors aged 65 and over, and 100% for veterans.

Budget Reductions and Financial Adjustments

In an effort to balance the budget, the city plans to eliminate 23 staff positions, primarily vacant, which is expected to lead to savings of approximately $1 million. Only two positions would require layoffs, both of which are nonunion. Additionally, cost-of-living adjustments will be paused for nonunion employees earning over $100,000.

Providence anticipates savings of $3.2 million in public safety overtime due to increased staffing in the fire department. Furthermore, a $2.8 million reduction in services is planned, though essential services like trash pickup will be maintained.

New Revenue Sources and Community Support

To generate further revenue, the proposed budget will increase fines and fees, with an anticipated additional $1.9 million in revenue. Increases in parking fines are particularly notable, raising expired meter fines from $25 to $40, and emergency parking violations from $100 to $250. Residents will also see a new $10 charge for bulky item pickups, which were previously complimentary.

The increased revenue is expected to support various community initiatives, including City Year, WaterFire, and Dorcas International, as well as provide emergency funding for community organizations that run warming centers during winter months. The budget also plans to establish a business center and appoint a nighttime manager to bolster business and community support.

Future Legislative Actions

A separate proposal is in the works to allow taxation of commercial parking and short-term rentals. Public hearings will be held on May 6 and June 9 to gather feedback from residents regarding the budget. The City Council finance committee will review the proposal and recommend changes before it undergoes two rounds of voting before it is sent to the mayor.

This budget proposal represents a comprehensive approach from Providence’s leadership to address critical fiscal responsibilities while also investing in the community and educational services for residents.