NEWS

Austerity budget cuts spending

By KEVIN FITZPATRICK
Posted 4/3/24

Mayor Kenneth Hopkins addressed the city council in chambers on Monday afternoon to highlight his FY 2025 Cranston budget starting this July 1.

During the special meeting, Hopkins described his …

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NEWS

Austerity budget cuts spending

Posted

CORRECTION: In the original version of this article, it was stated that Mayor Hopkins intended to downsize the city workforce by 24 positions. There are no positions being cut as part of the Financial Year 2025 budget proposal. During his speech to the city council, Hopkins referenced downsizing the city workforce by 24 positions in Financial Year 2023 as one of several measures taken to improve the city’s financial position. Hopkins’ quote in full reads as follows:

“With diligence and careful management of tax dollars and city spending, my message tonight is in part very encouraging for our city, but my message is cautionary. At the same time next year we’ll require attention and scrutiny in how we do business to control our spending. We have made great strides in our financial status through difficult decisions like eliminating 24 positions to downsize our workforce and other cost cutting initiatives helped to reduce the size of our government. Our improved financial direction will be presented with serious challenges going forward. I present you this budget plan as an austerity budget that I consider pro-taxpayer but will require commitment and sacrifice in the execution and delivery of services. My department directors will see that I am asking once again for them to do more with less. There are essentially no new programs or increased discretionary spending included. All city department heads will be directed to manage their budgets while meeting my expected level of service to our tax payers, and to do so with the current staffing levels.” 

Hopkins’ full address to City Council is available to watch on the City of Cranston’s Youtube channel youtube.com/@cityofcranston in the Live section, in a video recording of the livestream titled “April 1, 2024, Special City Council, Claims, Safety Services & Licenses and Finance Meeting”. The quoted section begins at 17:38. A link to the video is provided below. 

April 1, 2024, Special City Council, Claims, Safety Services & Licenses and Finance Meetings

Mayor Kenneth Hopkins addressed the city council in chambers on Monday afternoon to highlight his FY 2025 Cranston budget starting this July 1.

During the special meeting, Hopkins described his $323 million proposal and his administration’s priorities in drafting it. His priorities, as he described them, were twofold.

“First,” he said. “That this budget as presented to the city council and Cranston residents would meet the needs of Rhode Island’s second largest city but require no tax increase from local taxpayers.”

“This budget I propose for your consideration does not increase the amount of local tax dollars that can be raised to fund it,” he continued. “...That means we will operate the government on the same level of taxpayer support we received this year.”

The second mandate Hopkins issued was “That we would not use American Rescue Plan Act (ARPA) funds or monies we received from the federal American rescue plan act to fund city operations. While we have appropriately used ARPA funds in the past for direct taxpayer relief, this would be the last year we could use them to balance the budget. Prudence dictated that we move in a different direction.”

With these priorities in mind, Hopkins presented a budget which, if enacted, would cut $2.3 million from the 2024 fiscal year. The budget for the 2024 fiscal year was itself $4.7 million less than the year before.

Hopkins said “I present you this budget plan as an austerity budget that I consider pro-taxpayer, but will require commitment and sacrifice in the execution and delivery of services.”

“My department directors will see that I have asked them once again, for them to do more with less,” he continued. “There are essentially no new programs or increased discretionary spending included. All city department heads will be directed to manage their budgets. While meeting my expected level of services to our taxpayers. And to do so with the current staffing levels.”

Austerity measures

According to Hopkins, austere measures are necessary to maintain the city’s financial standing in the face of years of financial setbacks.

 “You will recall that in 2021, the state auditor general required us to reclassify pilot monies received from the state and in a swipe of the pen eliminated $4.7 million from our rainy-day fund,” Hopkins said. “My predecessor resisted following that state directive for years and just kept kicking the can down the road. That is not my style and I confronted it and fixed it.”

“Today our rainy-day fund or unencumbered fund balance exceeds the required five percent of our annual operating budget,” Hopkins said. “With diligence and careful management of tax dollars and city spending, my message tonight is in part very encouraging for our city.

He noted the city’s excellent bond rating.

“We want to keep working every day to maintain respect and positive comments from the rating agencies. They have recognized our strong financial practices and last year reaffirmed our aa+ bond rating.”

Hopkins also spoke of the city’s obligations to its pensioners.

“Included in this budget,” Hopkins said, “the city will fulfill contractual obligations and step increases for city employees. Cranston will also be fully funding its annual contributions to the state pension fund and obligation for OPEB.”

Public schools

Cranston Public Schools, which makes up more than half of the city’s budget, was addressed in the center of Hopkins’ speech.

“Tonight, I am asking our school committee colleagues and school administration to work with me through this challenging budget year,” he said. “Some of my dear friends and political allies serve on the school committee and I know they will be good advocates for our students and schools.”

Earlier this year, CPS released its budget proposal, requesting an operating budget of $181,712,717. Hopkins’ budget proposal for CPS, while still larger than 2024’s budget of $178,742,952, is shy of that figure by $1.8 million, at a total of $179,822,712. Hopkins did not propose any increase in the local school appropriation.

Of that nearly $180 million, $99 million will come from Cranston’s taxpayers. The rest will come from state aid.

In order to make up some of the distance between what the school is requesting and what Hopkins is willing to give, he is proposing the use of the last of the city’s ARPA money.

“To still try and assist the schools, I am prepared to recommend to the city council a sum of up to $1 million from our remaining ARPA funds for our schools.”

Apart from this budget process, the mayor said he would sit with the superintendent to review options to use the ARPA funds to relieve some of their planned expenses.

Hopkins noted his support for the bond for additional CPS projects coming to a vote in June, which will go towards the completion of Gladstone School, phase three of Eden Park School and the acquisition and renovation of the property for the Apprenticeship Exploration School which is run in collaboration with the Laborers International Union of North America.

He noted additionally that The school administration has represented that the spending on these projects will be eligible for up to 74% reimbursement from the Rhode Island department of education.

Altogether, if adopted as proposed, the tax rate for residential dwellings and land up to five units would be reduced from $18.90 per $1,000 of value to $13.41. The tax rate for larger apartments, commercial and industrial property would be reduced from $28.35 per $1,000 of value to $ 20.12 per thousand of value.

Delving briefly into the city’s capital budget, which generally funds improvements made to the city, Hopkins noted that the capital budget would fund phase three of the Knightsville rehabilitation project. The remainder of the capital budget would a number of other projects through departments such as police, fire and the recreation department.

“Our goal in preparing this budget was to meet the city’s ability to deliver essential services and to protect our long-term financial health,” Hopkins said. “We have done so for our residents with no property tax increase nor other increased fees like their sewer bills. This budget is my best effort to keep Cranston affordable for all taxpayers, families, and businesses.”

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