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Concerned about bankruptcy, Grebien proposes lowering car tax exemption

May 7, 2011

PAWTUCKET — Declaring it necessary in “saving Pawtucket from bankruptcy,” Mayor Donald R. Grebien has proposed a budget for the new fiscal year that won't involve an increase in property taxes but will instead derive needed revenue from motor vehicle taxes.
At a press conference held on Friday at City Hall, Grebien outlined the highlights of his budget proposal for fiscal year 2012 that he has submitted to the City Council for consideration. The $198 million budget is $7.1 million higher than the FY11 budget of $191 million, representing an increase of 3.74 percent.
Grebien said that the amount of debt that he “inherited” upon taking office in January totals approximately $15.4 million, with about $8.1 million on the city side and $7.3 million from the schools (this amount does not take into account the approximate $5 million in savings that school officials say will be achieved with a new contract and other cost-cutting). He stressed that unless Pawtucket balances the 2012 budget starting this July 1, the start of the new fiscal year, “the city could be forced into bankruptcy.”
Chief among the budget balancing plan is the elimination of 54 municipal jobs, saving about $3 million. About 23 of these job eliminations are expected to come from lay-offs and the rest from attrition and leaving vacancies unfilled.
The other big piece—generating $3.9 million in new revenue—would come from lowering the motor vehicle exemption from $3,400 to $500. For the average vehicle owner, this will mean an increase of approximately $150 per vehicle.
The mayor said that without this and his other cost-cutting measures, the residential property tax rate would have to have been increased by 96 cents per $1,000 of assessed valuation and the commercial rate by $1.28 per $1,000 in order to generate the amount needed to balance the budget. “We felt that lowering the car tax exemption was broader, fairer, and would have less impact on the homeowner,” he stated. “It also has less impact on seniors and on businesses.”
Grebien said that the budget also depends on some $900,000 from increased program revenues and $300,000 from give-backs in stipends and health insurance benefits from appointed and elected officials.
Among these programs are a proposal to impose a 25 percent “user fee,” up to $1,000, on employees who use city-owned vehicles on a take-home basis as well as 25 percent user fee on city-issued cell phones.
Grebien said the budget plan includes “across the board” cuts in every municipal department. He also said the proposal would eliminate stipends for individuals serving on boards and commissions, remove health insurance benefits for members of the City Council and School Committee, and institute five furlough days for employees of the Mayor’s office. The mayor also pointed out that he does not take health insurance from the city.
Among the 54 jobs being eliminated either through attrition or lay-offs are 13 in the Fire Department, of which five would be actual lay-offs and the other eight unfilled vacancies, and 9 positions in the Police Department which would be unfilled vacancies. Also hard hit would be Library Services, with three actual lay-offs and one to two positions left vacant; the city’s Information Technology (IT) department, and Parks Department, where four positions are slated for lay-off in each area.
In the City Hall Maintenance Department, a total of three jobs are lost but one will be a lay-off and two to attrition, Snow Removal will lose three jobs to lay-offs; and Refuse, the City Clerk’s Office, and Collections will all lose two employees each, one to a lay-off and the other through attrition. Personnel, Public Works, Equipment Maintenance, Sewer and Traffic Divisions will each lose one position to a lay-off, while one job in Building Maintenance will go to attrition. At both Daggett Farm and the Planning Department, a full-time employee will go to part-time, Grebien said.
Grebien added that among these changes is a proposal to combine the jobs of Emergency Management Director with that of the director of Public Works and name current EMA Director Robert Howe to the new dual role.
The mayor said he had met with all of the leaders of the city’s unions earlier that day to let them know of his proposal and that letters will now be mailed out to all of the employees slated for lay-off.
Grebien said his budget plan level-funds the School Department, and does not include the $2.9 million in additional funding that was taken away last year and which school officials had requested be restored. He added, however, that he intends to continue working with the School Committee to help balance the schools’ FY12 budget.
While acknowledging the impact, especially in fire services, Grebien said it will be lessened somewhat by plans to add a third rescue by July 1, put an engine in reserve and move to part-time dispatchers. In the IT Department, he said the job losses will be absorbed though equipment upgrades and the implementation of a new software system.
Grebien said he and his administration are still looking at possible outsourcing of other city services such as trash pick-up and recycling, and continue to maintain and open door with union leaders. He reiterated, however, that bankruptcy or a receivership scenario “was not an option” as he would not want to see control go to an outsider as has happened in neighboring Central Falls.
Grebien said that his budget draft caused him “many sleepless nights,” particularly when it came down to putting names to the particular budget cuts. “I truly understand that I am affecting people’s lives,” he said. “But, I was elected, whether I like it or not, to make those tough decisions.”
Grebien said the next step would be for the City Council to refer the budget to the Finance Committee. There will be two budget work sessions scheduled before the budget is considered on May 25 at 7 p.m. at City Hall.

 

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