PROVIDENCE – Mayor Angel Taveras Thursday said the city will be bankrupt by June if it does not gain pension concessions from municipal retirees or additional payments from its tax-exempt hospitals and colleges.
In a news conference called to outline what he described a new “fiscal crisis” in Providence, Taveras said without such concessions a mid-year property tax increase of yet-undetermined size would be required to fill what is now a $7.1 million mid-year budget shortfall. Even with some new taxes, he said he couldn’t rule out default.
“The impact will be felt for generations to come,” said Taveras, flanked by state lawmakers and city councilors, about the possibility Providence becomes the second Rhode Island city to declare bankruptcy in as many years.
The public warning was spurred by a superior court judge’s ruling Monday that barred the city from breaking its agreement with retirees to provide them health care for life.
He called on former city employees to sacrifice some of their “bloated” retirement benefits or have them “slashed” like municipal retirees in bankrupt Central Falls.
To the city’s nonprofits hospitals and colleges, Taveras said he would work with city council and General Assembly leaders on legislation that could strip them of all or part of their tax exempt status.
House Speaker Gordon Fox, also in attendance, said if the nonprofits do not contribute more, he would work on state legislation that would increase their payments.