Pawtucket council OKs budget, 8% tax increase
11:40 PM Wed, Jun 10, 2009 | Permalink
Mike McKinney 
Email
PAWTUCKET, R.I. -- The City Council gave unanimous preliminary approval Wednesday night to a budget that would impose about an 8-percent tax increase next fiscal year in order to close a school budget deficit in the current year, which runs through June 30.
The council cut a proposal to require residents to pay for bags for non-recyclable garbage after members of the public expressed strong opposition at Wednesday's hearing. The bag system had been promoted as a way to reduce next year's tax rate increase to 5.6 percent, by reducing the city's tipping fees, but resident after resident said the mandated fees -- $2 per bag -- amounted to another tax hike in disguise.
Some residents said they can barely pay for food and housing, argued that enforcement of the bag program by a part-time officer would surely fail, and complained that it was sprung on the public at the last minute, might not meet the revenue projections and needed study. The bag-fee system was slated to go into effect in the fall.
Resident Joseph M. Lima called the bag-fee plan "a back-door increase in taxes."
"With the economy the way it is, we cannot afford this," resident Barbara Lagerstrom told the council.
The current tax rate of $16.13 per $1,000 of assessed value would rise to $17.78, under the amended budget of about $203 million for schools and city services. On an average home assessed at$171,000, the tax bill would rise about $282, according to Ronald Wunschel, the city finance director.
Local tax levy increases in fiscal 2010 are capped at 4.75 percent by state law, but the state Division of Municipal Finance granted Pawtucket an exemption to raise taxes higher because the city has endured a large drop in state revenue-sharing aid, division chief Peder Schaefer said this week. The state cut the city's aid by $2.6 million, more than 50 percent, Wunschel said.
The nine-member council must take a second vote to approve the budget, sometime next week, assuming that it does not amend the plan following a public hearing that will be held the night of the vote. The hearing will focus on the amendment that removed the bag proposal.
Along with a tax increase next year, the proposed budget draws heavily from "rainy day" cash reserves to seal up this year's holes. The tax increase would cover $3 million of a $5.1-million schools deficit in this year's budget. The reserve fund is tapped to cover both the balance of that deficit and the entire $2.6-million non-schools deficit, Wunschel said. He has said that many areas of the budget did not increase from this year's levels or were reduced.
The council's budget plan aims to avert a Caruolo action filed in Superior Court by the School Committee from going forward. The suit, filed in April against the mayor and City Council, aims to get a court to order a $5.63-million increase in the school budget for this fiscal year. That would cover the $5.13-million deficit and an anticipated $500,000 in legal expenses tied to the action.
Wednesday night, Council President Henry S. Kinch Jr. blamed state officials for taking aid away from communities late in the game and essentially dumping a tax burden onto local taxpayers. He also criticized school district officials for not better grappling with a deficit.
