Editor's note: The total $14.5 million deficit figure comes from the $10 million cumulative deficit, combined with the $4.5 million the Budget Commission added to the School Department budget in 2012, bringing schools up to $66.9 million.
After months of audits and meetings, Woonsocket has a five-year plan to solve its $14.5 million deficit, including a smaller supplemental tax increase added to the base than proposed last year.
The "more modest" supplemental tax would add $2.1 million more to this year's budget, a 4.5 percent increase on the 2012 tax levy, said Tax Assessor Chris Celeste. He noted the city has already taxed up to the state's 4 percent increase limit this year.
At the Feb. 4 Budget Commission meeting, City Finance Director Thomas Bruce noted the increase would be a permanent, recurring addition to the city's tax base. According to a spreadsheet released to press at the meeting (see attached .pdf), the increase would add $2.5 million to the city's revenues each year from 2013-2017, assuming an 85 percent collection rate.
How that increase will impact the average taxpayer remains to be seen. Celeste said the Woonsocket Budget Commission will discuss options he will present at their next meeting Tuesday, Feb. 19, at 3 p.m. at City Hall, 169 Main St., in Harris Hall.
Last year, the City Council asked the General Assembly to approve a 12.5 percent tax increase to raise $6.6 million in 2012 (also a permanent increase). The bill failed when the city's General Assembly delegation withdrew their support.
"It's a much more modest supplemental tax than what we were talking about a year ago at this time," said Commission Member Peder Schaefer.
The original supplemental tax bill would have led to an extra $3.15 for every $1,000 of assessed residential property value. For the owner of a home worth $150,000, that would've meant a $472.50 bill. The supplemental tax would have also tacked on $4.51 for commercial property, and $5.81 for motor vehicles.
The proposed new supplemental tax revenues are one element of the deficit fix, which relies on a series of as-yet unrealized assumptions, including union concessions, cost cutting and a "deficit reduction legislative package" which the supplemental tax is part of, according to City Finance Director Thomas Bruce.
The other elements of the legislative package are:
- A bill raising the 8 percent reimbursement on subsidized housing to 15 percent.
- Transfer of the municipal pension system into the state system.
- Stretching the amortization of the pension liability from 5 to 30 years.
With all those parts in place, Bruce told the Budget Commission, Woonsocket can, "Bring the deficit, in five years, over to a surplus of $4.1 million."
"I understand this is a realistic plan, but it may not happen," said Commission Member Peder Schaefer, "I'm comfortable with the plan as it's currently presented."
Bruce said changes to state aid and unforeseen emergencies could affect the plan. Assuming all that follows their estimates, though, Bruce said, "This is what we're going to do."