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CENTRAL FALLS â The city is about to exit state-managed bankruptcy but how much will it cost local taxpayers when it does?
That was a question debated at Wednesday eveningâs public hearing at the high school on the state receiverâs 5-year budget plan for city finances in thewake of its 13-month long bankruptcy. About 18 people attended the hearing, many representing groups affected by the receivership.
The 5-year budget plan was introduced by state Director of Revenue Rosemary Booth Gallogly as a ânew chapter for Central Falls,â as the hearing began but also one that will require continued vigilance by local officials to ensure the cityâs budget remains balanced.
To guarantee that continued fiscal solvency, Gallogly and Christine Curley, an attorney for the Department of Revenue, explained that the five-year budget plan running through June 30, 2017 will require local tax increases of 4 percent, the maximum allowed by the stateâs property tax levy cap, for each annual budget covered by the plan.
The increases come on top of approximately 18 percent in tax increases since the state began managing local fiscal affairs.
The budget plan also sets a payment schedule for the various classes of claimants under the cityâs bankruptcy, placing some such as state-guaranteed bond holders in line for full payment and also protecting the negotiated agreements with the cityâs various employee groups.
The budget balancing process used to erase a $6 million structural city deficit and fully fund the resulting $16.8 million new spending plan included negotiated benefits cuts with current city employees and retiree groups and also a round of budget cuts that eliminated some city services and positions.
The budget, however, does not include any revenue projections from the privately-operated Wyatt Detention Center in Central Falls, or the costs the state incurred in running the receivership, a $3.8 million expense to be paid over a period of years when the five-year budget plan ends in 2017.
Read more in our print edition.