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House Finance Committee Tables Supplemental Tax Act

Mayor, Council President answer questions about need for supplemental tax bill.

 

The House Finance Committee has tabled the act authorizing a supplemental tax bill after hearing city and state officials speak for it and two citizens opposing the measure.

The act, S2872, would authorize officials to raise as much as $6.6 million for the financially strapped city. Without it, Woonsocket will be out of money by the end of the month. A hearing on the matter aired today during a Capitol TV broadcast.

After the Committee heard from and questioned Woonsocket Mayor Leo Fontaine and Woonsocket City Council President John Ward, the cause for the supplemental tax got support from the state, but testimony from two Woonsocket citizens ended the hearing on a note of opposition.

Susan Greschner, chief of municipal finance for the Department of Revenue, told the Committee the state was in favor of the act. "...the department is supporting the supplemental tax that is before you." 

Dennis E. Hoyle, the state's auditor general, also spoke in favor of the act. "I think probably the most compelling reason is that we've seen in other communities when these deficits aren't addressed on a timely basis, it only gets worse," Hoyle said, "I think the more quickly it can be dealt with the quicker the city can get back on its feet." 

But John McLaughlin, a teacher for 33 years in Woonsocket and a former school committee candidate who said he supports education, wasn't interested in the solution. "I don't have any confidence in my local government," McLaughlin said, particularly after seeing Monday night's School Committee meeting on the school budget. The School Committee, he said, is in total disarray. "They don't even know what they're spending it on." 

Jim Cournoyer, a member of the Woonsocket Taxpayer's Coalition, also spoke against the measure. "I'm here to oppose the legislation and request that you reject it." Cournoyer said, "The plan is to send out the supplemental tax bill and hope for better days, and hope is not a strategy."

Though he said he expects to see a supplemental tax bill eventually, the current plan doesn't call for what he referred to as "shared sacrifice", including concessions from retirees and unions, which he said has yet to materialize. Instead of the supplemental tax bill, he said, the city should move into receivership, hopefully avoiding bankruptcy. A receiver will be able to make the dispasionate decisions that need to be made, he said.

Earlier in the meeting, Fontaine responded to a question from Rep. Laurence W. Ehrhardt (R-North Kingstown), who noted the Committee had only just received the proposal, about whether the receiver process would be permanently put to rest by the supplemental tax.

"I don't know that we can ever say that it's (receivership) completely avoided with any certainty. It certainly stablilizes the situation," Fontaine said. However, working closely with the state and staying in communication with the Department of Revenue as the city works to remain solvent is a good ward against state intervention.

Rep. Daniel Patrick Reilly (R — Middletown, Newport, Portsmouth) was also concerned about the long-term effect of the supplemental tax. "What's driving labor to the table?" he asked. He said without a receiverhip process in place, there's nothing to address major costs to the city's budget such as contracts. Also, he said, a supplemental tax doesn't address unfunded pension liabilities. "So we pay our bills for three months and then the receiver starts, is that it?" Reilly asked.

Woonsocket Finance Director Thomas Bruce said the supplemental tax bill, combined with the newly approved state aid formula, will be sufficient to keep the city out of the red in the future. "As long the financial management element in there (the school department) starts to develop in a prudent manner compared to what we've had in there, that's all we need," Bruce said.

After hearing the last speaker, the House Fiannce Committee voted to table the matter for further study.

Tommy Tutone May 15, 2012 at 11:34 PM
Bruce's software is all set up,just hit the enter key on the keyboard and anyone in Woonsocket with a mortgage escrow account is automatically in arrears for 2013.A nastygram for your mortgage company to follow.Woonsocket already has a "cold and calculating" reciever at city hall,he's a politcal appointee of Fontaine. These guys take the cake,now they're protecting their jobs,period.
Maggie May 15, 2012 at 11:48 PM
Jim, great job, thank you from those of us that would have gone if we could get free too. My family voted for you and would again if you ever decide to run again; it is way past time this city replace Fontaine & Ward with people with fresh ideas and forward thinking. Let's get on with receivership & finally clean this mess up.
Jim May 16, 2012 at 01:06 AM
Everyone keeps crying for receivership. Be careful what you wish for. Look at Central Falls. The receivership person went in and taxes went up by 19% with an additional increase of 4% each year for 5 years. And if you don't like it, you can't vote out the person who is in charge of the receivership. They are there and thats it. What they say goes no questions asked. Their medicine may be even more bitter than Mayor Fontaine's
David T May 16, 2012 at 01:39 AM
Okay, so you have've killed the supplemental tax bill. However, there will be tax increases, right? How will this be avoided? The state will likely take over the schools before the end of the month. That's so awesome because they've been so benevolent to us so far. Will this solve any of our problems? What's the plan now? What are the creative ideas? Will the schools be any better tomorrow, next week, next year? Will a receiver come in and wave a magic wand and fix everything? Having as your sole focus the mantra of no more taxes, is not a creative idea. To those of you who supported the idea of not increasing taxes and lobbied hard like Mr. Cournoyer, could you please use your talents of persuasion to lobby for improving the education in this city? This will involve asking the state for more money. If you could do that, you could save this city. I'm really not convinced what happened today will lead to any solutions for the quality of the education or the success of the city.
Jan Allard May 16, 2012 at 01:43 AM
Dead in the water, you are slowlly drowning if you think a receiver is the answer. Mr. Cournoyer has his "own" agenda, I'm sure. I'd rather pay a supplemental tax bill than a whopping 20% tax increase. Not everyone has their taxes escrowed, by the way...Maybe if school department Dr. Annoyan can get her act together and stop being so "out of touch" with reality, that would be one step in the right direction. Let's make the increase equal with everyone. People that work for the city and don't live in the city like over 500 teachers should pay something, as well as directors or anyone else who isn't a woonsocket resident. Let's start charging our low income housing residents a fee for using our services. Not all of them are low incomed...they just know the system.
Steve May 16, 2012 at 01:44 AM
Gee Jim, so tell us what's really different with a receiver? Taxes have gone up 4.5% each of the past 4-5 years, with a 13% supplememtal on the table, and a 13% increase at minimum going forward next year, and god knows what's after that once the WED gets done fleecing the city for who knows how much. "Be careful what we wish for" ? Sounds a lot like a caller on WNRI that calls in 5 times a day saying "Be careful what we wish for"......Hmmmmmm.. I think what you're seeing here is the start to a new beginning in Woonsocket, finally, maybe there is some light at the end of this dark, dark tunnel.
Still Hope May 16, 2012 at 02:07 AM
The next act is obvious. This rejection of the tax bill is a good thing. The unions were banking on this legislature going through, so they could lay back. Now they will have to make a few short term concessions(which they will recover in the long term), the budget will be whittled down a bit, and the city will "find" money to allocate to last year's deficit. With the increase in state aid, the city will once again be solvent and the WED can once again work on making the school system work. (Can you imagine the police worrying more about budget than about crime? And then the citizens requesting them to sell their firearms to cover costs) A receiver is NOT in the script…sorry to disappoint. Cool heads will prevail.
David T May 16, 2012 at 02:24 AM
I'm glad its obvious to someone, Still Hope. Thanks. Your'e probably right about the pressure this puts on the unions, but its only the WED union, right? And what will the city, police and fire unions do? This needs to be an across the board, every union, thing. This separation of city and school needs to be addressed. There should be no separation. If someone could figure out how to put all the unions from the entire state of RI in the same position our teachers' union now finds themselves in, I would support that as well.
Jan Allard May 16, 2012 at 02:46 AM
It isn't the unions fault the City is in this mess. It's a combination of state mandates/funding we are not getting from state plus the stupidity of the school administration. The school hasn't balanced their budget in years. The city should be separate from the schools, because if you look around at other communities, it's always the school departments that take and take and take from the municipal side. It has got to stop.
Joe May 16, 2012 at 03:18 AM
David T, Mr. Cournoyer did not lobby hard in support of the idea of not raising taxes. He clearly said expects and accepts a Tax increase. But he will not accept just a Tax increase. What he wants is a Receiver who can deliver both a Tax increase and the necessary structural reforms that are needed in order to provide the government that we can all afford in an ongoing manner. What he and many others want is quite simple - Shared Sacrifice, no more piecemeal band-aid "solutions" and government services that are affordable to the residents of the City. It's a pretty simple concept. And don't be fooled by the Jan Allards of the world who suspect people have their "own agendas". Not everything is a conspiracy, Jan. People of goodwill can have strong disagreements on the merits.
Joe May 16, 2012 at 03:23 AM
Jan, Please, do share with us what Mr. Bruce's "plan" was, other than crushing the taxpayers with a 13% Tax increase in the last 45 days of the fiscal year, followed by the same bill plus another increase a few months from now, not to mention the 15% interest charge for those that can not come up with the Supplemental funds with 30-days. Yes, please enlighten us, as the rest of us seem to have missed the rest of the "plan".
David T May 16, 2012 at 03:32 AM
The cities who gave the generous benefits are on the hook for this. The state has also turned it's back on us. The contracts union workers have across this state are disproportionately generous to our ability to pay at this time. It's just not sustainable. I'm not talking about base pay, I'm talking about retirees' pensions and health care costs and COLAs, as well as how much current workers pay into the pension system and health care and their annual step increases. I'm in a union in MA and haven't received a step raise in years. And ever since the economy tanked, well, let me put it this way, I consider myself lucky to have a job. I hope some day my pay will increase and my healthcare costs will stabilize. I can't retire now or any sooner than 65, if I'm lucky. I agree that the school committee and school administration, past and present have made mistakes. But I also spread the blame around to the mayor and council. A city can't step into this much of colossal hole and get away with saying, none of that was my fault. And by the same reasoning, a union can't keep on passing on incredible benefits to it's membership without at some point taking some blame for emptying out the cookie jar. It pains me to say it.
Joe May 16, 2012 at 03:34 AM
RBeau, Great question! Why don't you ask the Superintendent or the School Committee when the last time they convened a meeting of their Finance Sub-Committee? Ask them if they have tried or bothered to share and or review their Budget proposals with the Finance Sub-Committee. You might even call Mr. Cournoyer and ask him if he has requested Budget info and whether he has received a response. Who knows, perhaps that is one of the reasons why he says we don't have a plan. My guess is the the School Finance Sub-Committee was similar to the Council's Audit/Finance Committee (which has yet to have a meeting) ...nothing more than a symbolic move to quiet the masses. Do update us when you get your answers.
Jpenp May 16, 2012 at 03:37 AM
Woonsocket Residents Quiz Time- What percentage of your tax dollar goes to education? ANSWER: 18% or $12.6 million of a total of $68 million SOURCE: http://www.ci.woonsocket.ri.us/FY2012%20Adopted%20Budget.pdf
Jpenp May 16, 2012 at 03:56 AM
Question 2 What percentage does the non-Woonsocket resident pay for the education system in Woonsocket? ANSWER: 78% or $46.6 million SOURCE: http://www.ci.woonsocket.ri.us/FY2012%20Adopted%20Budget.pdf
Jpenp May 16, 2012 at 04:03 AM
FINAL QUESTION Who is to blame for the financial crisis in Woonsocket? ANSWER: Mayor Menard - Gobbling up education state aide to balance the budget for years. It's only been a couple of years for tax increases but she went years without spending and extra penny for the schools.
Bob C May 16, 2012 at 04:40 AM
FINAL QUESTION Who is to blame for the financial crisis in Woonsocket? ANSWER: Collective bargaining privileges for gov't workers
Tommy Tutone May 16, 2012 at 11:02 AM
Woonsocket's dying a slow death (i'll get hammered on this one but i don't care).There's been no new industry here for years.I love all the comments about raising taxes....no jobs,can't have ever increasing taxes.This City better get used to the idea of no growth.If i see growth,i'll change my tune,but i just don't see it.
Tired Tax Payer May 16, 2012 at 12:57 PM
So the value of my house just dropped $50K with the revaluation. How is that going to help the city? They would have to raise the tax rate quite high to make up the difference.
Novan for Life May 16, 2012 at 01:44 PM
How could it running on a $58mil dollar budget,plus major cut in state aid and being severly underfunded or levelfunded so pointing the finger isn't going to help
SDE May 16, 2012 at 07:02 PM
A couple more years till I can vote with my feet, I'm out of this city replace my tax dollars completely. I saw this coming traded down in vehicle to dodge these insane vehicle taxes. Im trading up when I move from Woonsocket. A nice southern state with friendly business atmosphere, low property tax, and more responsible government.
Jim May 17, 2012 at 01:26 AM
Steve, what do you expect after the long term of Mayor Menard who never increased taxes proportionally. There should have been increases during her term but never did. Now, Fontaine, of course now having served one term who now needs to own the problem, is stuck holding the bag. Woonsocket has been no different than the rest of the country. Everyone only thinks about the short term and not the long term. Everyone loved Menard because she was great for the short term.....now we are in the long term and everyone has to pay for it.
Jan Allard May 17, 2012 at 01:28 AM
Everyone, Joe, has an opinion, right or wrong. It's pretty pathetic when our reps don't even speak at the most important hearing on Tuesday to represent the taxpayers. Instead in the Journal you see Jim Cournoyer whispering into Rep Baldelli's ear, probably telling her what to do, and what not to do. Jim should only represent himself, not the city. And yes, if you don't think it's all politics, THINK AGAIN...IT'S AN ELECTION YEAR. I guess our reps, Baldelli and Brien would rather see the taxpayers sink and lose everything, instead of suffering a bit with a supplemental tax bill.
Joe May 17, 2012 at 01:58 AM
Jan, Yes, everyone is entitled to their opinions. But when you accuse people of having their "own agenda" in a negative manner, you should at least inform us what you believe that agenda is. Mr. Cournoyer has been and was very clear about what his "agenda" is ...he very clearly stated that he wants shared-sacrifice, not just a Tax bill, and he wants a Receiver because a Receiver can address the structural problems that our current leaders can not or will not address. Also, you said "Jim Cournoyer should only represent himself, not the city". What are you talking about?? I've never heard Mr. Cournoyer say he was representing anyone other than himself, as a taxpayer. As you yourself said, everyone is entitle their opinion. And at the House Finance hearing, Mr. Cournoyer clearly said his name and that he was a taxpayer ...who objected to the proposed bill. Of course, you would have known that if you had bothered to show up at the meeting to share your opinion ...but instead you sit on the sidelines and complain when others like Mr. Cournoyer take the time to express their opinions in an open forum or when a Rep.'s constituent leans over to ask their Rep a question in a loud crowded room. You too could have asked Rep Baldelli a question, had you bothered to come down from the bleeches and onto the playing field.
Bob C May 17, 2012 at 02:03 AM
" Baldelli and Brien would rather see the taxpayers sink and lose everything, instead of suffering a bit with a supplemental tax bill." it's a "bit" in your land maybe, not for the rest of us. Let the ship sink and rebuild it from the ground up.
Ray May 17, 2012 at 02:22 AM
Baldelli wants answers like the rest of the tax payers. Every word from the Mayor's mouth is a lie.
Ray May 17, 2012 at 02:31 AM
Brien wants bankruptcy because when Central Falls went to it Flanders gave him a job. Research it people. He became their city prosecutor in Central Falls.
Tommy Tutone May 17, 2012 at 11:44 AM
From the Call: In East Providence, the only other city in the state currently under budget commission management, the rating agencies have reacted positively to the city’s improving condition. Meanwhile, Bruce says, continuing uncertainty hovering over the city’s fiscal future is taking a toll on employees at City Hall, whose ranks have already been thinned in series of budget cuts dating back to at least 2009. “We’re having some serious morale issues in this building,” says the finance director. “There are people here who are worried about their salaries, their benefits, their job security.”
English first May 17, 2012 at 11:54 AM
http://woonsocket.patch.com/events/tents-for-the-homeless
Jan Allard May 18, 2012 at 02:26 AM
I'm sure Joe, you understand politics quite well. I would of gladly gone to the state house, but I am not "financially secure" like some people who can show up at everything. Unfortunately I work for a living and can't afford to take time off. I also have written to our reps and Senator Cote over 3 weeks ago, and, can you image that not 1 had the decency to answer. So, yes, I don't like politicians who don't deliver.

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