NEWS

Mayor: $311M budget keeps city on ‘right track’

Hopkins says plan ‘will not result in a property tax increase’; $1.5M more sought in local funding for schools

By DANIEL A. KITTREDGE
Posted 4/7/21

By DANIEL KITTREDGE Mayor Ken Hopkins last week unveiled a roughly $311 million city budget plan for the fiscal year that begins July 1, saying his proposal will "keep Cranston on the right track" while holding the line on taxes. "This budget reflects

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NEWS

Mayor: $311M budget keeps city on ‘right track’

Hopkins says plan ‘will not result in a property tax increase’; $1.5M more sought in local funding for schools

Posted

Mayor Ken Hopkins last week unveiled a roughly $311 million city budget plan for the fiscal year that begins July 1, saying his proposal will “keep Cranston on the right track” while holding the line on taxes.

“This budget reflects the three priorities from my inaugural address – protecting our tax dollars, protecting Cranston’s neighborhoods and protecting the special quality of life in our citizens,” Hopkins said in a statement issued after his April 1 budget address to the City Council. “This budget will ensure the effective delivery of city services and keep Cranston going in the right direction.”

The $310.9 million plan put forward by the mayor represents a roughly 4 percent increase over the $298.6 million budget adopted for the current fiscal year.

It includes funding for a number of new positions in the city’s Police and Fire departments and seeks an additional $1.5 million in the city’s contribution to Cranston Public Schools, which the mayor said is “commensurate with my support for our kids and their educational needs.”

The mayor’s $6.4 million capital budget plan also includes funding to begin work at Garden City and Gladstone elementary schools as part of the district’s ambitious five-year facilities improvement plan, for which voters approved a $147 million bond question in November.

The mayor’s budget uses approximately $7.9 million of the roughly $27 million the city is receiving through the federal American Rescue Plan to offset the “direct impacts and revenue losses from the pandemic and severe negative impacts on industries like the restaurants and hospitality,” Hopkins told the council.

He is seeking to have the rest of the federal stimulus money “remain for future years as a restricted account for our needs as federal regulations clarity state and local opportunities.”

A summary included with the budget document reads: “State aid has been budgeted based on the Governor’s proposed budget and the City’s past experience. Our projects also consider the effects of the COVID-19 pandemic on the City’s revenue streams taking into account the American Rescue Plan Act (ARPA) along with current and past experiences.”

In what he described as “not an easy choice,” Hopkins also said his plan would keep the Budlong Pool closed again this summer.

He cited the “pandemic’s lingering and unknown timetable,” adding: “The planning timetable to prepare the facility, hire summer employees and open the pool does not work in our favor, anticipating that COVID restrictions remain in place.”

He also said he has asked officials to explore installing a “splash pad” at the Budlong Pool or another location in the city. Meanwhile, the summer recreation program is planned to go forward this year.

Hopkins delivered his budget address in City Hall’s Council Chambers with several members of the administration in attendance. The remarks were streamed live as part of a virtual meeting of the council, which has since started its Finance Committee hearings on the proposal.

The city’s charter requires that the mayor present a budget to the council by April 1 each year. Hopkins last week said “some of my advisors suggested that we ask for an extension of time to submit the budget,” given the uncertainty that continues to surround the state budget and the impact of federal stimulus dollars. He noted that the council last year delayed action on the budget “in hopes of having a clearer understanding of the final allocation of state and federal resources.”

Ultimately, Hopkins said he “felt the residents and City Council had the right to know our financial plans and I am comfortable proceeding forward tonight.”

Full video of the mayor’s address, along with the text of his remarks and the complete budget document, can be found on the city’s website, cranstonri.gov.

Impact on taxes

As is the case each year when the mayor’s budget plan is unveiled, word of how it will affect the city’s tax rate has been much anticipated.

The anticipation took on an added intensity this year based on the results of the most recent revaluation process conducted by Vision Appraisal. Homeowners throughout the city recently received notices regarding their new property values based on the revaluation, with reports of some properties seeing value increase of more than 20 percent.

During his address last week, Hopkins said the budget plan, if adopted as presented, “will not result in a property tax increase, nor an increase in sewer fees or any other fees.”

The mayor’s follow-up statement indicates, and the budget document shows, that the residential tax rate would decline from $20.77 to $18.21 per $1,000 of valuation. The commercial and industrial rate would decline from $31.16 to $27.32 per $1,000 of valuation.

“As I said in January, Cranston was to undergo a state-mandated revaluation of all residential and commercial properties in our city,” Hopkins said during his address. “I know that a revaluation causes homeowners concerns, but I ordered that the tax assessor and Vision Appraisal give taxpayers ample opportunity to discuss their new property values.”

He added: “We have all witnessed extraordinary increases in home selling prices that must be reflected in the new values as of Dec. 31, 2020. I have seen that even with new assessments, residents are still selling their homes for more than the new values. The bottom line for every taxpayer is how much in taxes they will have to pay. With the help of our finance team and careful review of budget needs, I think most residents will be pleased with our final effort.”

Some, however, are critical of the mayor’s statement that the budget will “not result in a property tax increase.”

“It’s really important that the language that we use is clear and transparent,” Ward 3 Councilman John Donegan, the council’s minority leader, said during an interview Monday. “While I sincerely appreciate the valiant effort to reduce the tax burden based on the new assessment, I think telling people that it’s a no tax increase budget is misleading.”

During the first installment of the Finance Committee’s budget hearings on Saturday, Finance Director Robert Strom told council members that revaluations generally result in a tax impact that is divided by thirds. Roughly one-third of taxpayers see their bills decline year-over-year, he said, while another third see an increase. The other third sees their bills essentially unchanged.

In short, because property values have increased this year, the city’s overall tax levy would increase under the current tax rate. As a result, the proposed tax rate for the coming year has been lowered to correspond with the mayor’s spending plan – a “revenue neutral” approach, as Strom put it.

Strom noted that in some revaluation years, property values decline, leading to a similar, but inverted, result – a higher rate but for lower property values, with a roughly even split of taxpayers seeing higher, lower or equal bills. He and the mayor have urged residents to wait and apply the new proposed tax rate to their property values in order to gauge the precise impact on their upcoming tax bills.

On Tuesday, Strom said if a property’s value increased by more than 15 percent under the recent revaluation, “there’s a good chance they’ll be paying more in tax dollars.” Value increases vary, he said, based on “style of home, location and market sales in your area.”

“This is a revaluation issue, not a tax rate issue,” he said.

Strom said the median home value in Cranston increased from $212,700 as of Dec. 31, 2017 – the date associated with the previous revaluation – to $253,700 as of Dec. 31, 2020. That is an increase of roughly $41,000, or 19.3 percent.

During Saturday’s session, some council members questioned why officials had not explored the feasibility of delaying the revaluation or its implementation, given the financial strain the pandemic has placed on many city residents.

Donegan on Monday said inquiring about the revaluation was “maybe … an opportunity lost,” acknowledging that some of the responsibility lies with the council as well.

“These are challenging times,” he said. “We need leaders who are maybe going to think outside the box a little bit.”

Donegan said he is “concerned over who the tax burden is being redistributed to,” and whether specific neighborhoods – particularly in lower-income parts of the city – will be assuming more of the tax burden as a result of the revaluation. He said he has requested information from the administration to “see where the tends are.”

“Housing affordability is really an issue here in Cranston,” he added.

Donegan also questioned the reliance of the mayor’s budget on nearly $8 million in federal stimulus funding, calling that a “significant amount to make up” through other revenue sources in future years.

“That is a potential issue,” he said.

In a statement Tuesday, Ward 6 Councilman Matthew Reilly, chairman of the Cranston Republican City Committee, defended Hopkins’s budget while expressing “disappointment in the early signals from his Democratic colleagues” for “wasting the taxpayer’s time and money with political posturing and games.” He also criticized “continued misinformation and false narratives being portrayed by them on social media.”

“It looks like my Democrat colleagues are going to bring a partisan approach to the Mayor’s first municipal budget,” the statement reads. “They apparently want to distract from the no tax increase budget that keeps Cranston going in the right direction.”

It continues: “Instead of commending the Mayor for his no tax increase budget and more local funding of our schools, they chose to try and create a fiction of criticism on him not delaying the revaluation and to cast blame for the revaluation results on Hopkins … Given that my democrat colleagues are all fully aware of the nature of the state mandatory revaluation, and that it is a completely separate and distinct taxing event from the Mayor’s budget, it saddens me to see such blatant misinformation being provided to the citizens of Cranston.”

Increase for schools

Donegan did “commend” Hopkins for including the $1.5 million city increase in school funding in his budget.

“It is a notable investment compared to what we’ve seen over the past decade,” he said, adding that funding with the schools will be a “priority” for Democrats during the budget review and amendment process.

School funding has been a particular source of concern this budget season. Projections from the Rhode Island Department of Education show the state’s aid to Cranston Public Schools would be essentially level funded for the coming fiscal year, increasing just $36,000 – a figure Hopkins called “disappointing” in his remarks last week. In recent years under the state’s funding formula, the district has typically seen a more significant increase, including roughly $4 million more for the current year.

As a result, school Superintendent Jeannine Nota-Masse’s initial $171.9 million budget plan for the district sought a city increase of roughly $3.8 million. Hopkins’s budget for the school district totals $169.6 million.

During last week’s address, Hopkins said the $1.5 million increase he is proposing “more than triples that of last year and is equal to the highest increase proposed by a mayor in the past decade.” He called it “by far the biggest commitment I make tonight.”

“Historically, new city dollars to the school department have been modest and a good effort by mayors and past councils. Last year, for example, approximately $469,000 extra was given to the schools from local tax dollars,” he said. “I have determined that my financial commitment must be commensurate with my support for our kids and their educational needs.”

Hopkins also said that through the local contribution increase, approximately $20 million the district will receive through the American Rescue Plan and another $9 million in federal grant funding for the city’s schools, “I am confident the administration and School Committee can meet their educational obligations.”

He added: “We will continue to urge the governor and legislature to revise the formula that this year only gives the schools an increase of $36,000 in state aid.”

In an email statement Monday, Nota-Masse said the mayor’s proposed $1.5 million increase for schools is an “appropriate and meaningful allocation.”

“Cranston Public Schools is, unfortunately, facing budget difficulties based on the disappointing lack of state aid this year. Historically, Cranston has received $2-3 million in annual state aid increases. This year, we were allotted a $36,000 increase, which puts an undue burden on the City of Cranston,” the superintendent wrote. “We are fortunate to have Mayor Hopkins who is committed to supporting Cranston Public Schools and has done so in his budget proposal. His budget allocation of $1.5 million is an appropriate and meaningful allocation to our schools after a difficult and trying year for all of us in Cranston. Having to balance the needs of our schools without raising taxes, I am confident Mayor Hopkins has done an admirable job creating a budget that supports the children of our city. I am hopeful the members of the City Council realize that adequately and consistently supporting the growth and development of our students is a priority and fully support the mayor in his efforts.”

Elsewhere in the mayor’s budget plan:

* Hopkins is seeking to fund approximately 15 new positions in the Fire Department and four more officers in the Police Department.

During his address, the mayor said the funding for the new firefighters is tied to a $1.6 million federal SAFER (Staffing for Adequate Fire and Emergency Response) grant for which the city has applied.

“We are working with Sen. Reed and Congressman Langevin in promoting that grant for us,” the mayor said.

The follow-up statement from Hopkins reads: “The Mayor emphasized that both departments are in the recruiting or examination phase for a new and diverse class of first responders.” * Hopkins said while he received “requests from several other departments” to fill new or open positions, “after careful review, I determined that this was not the year to be filling those spots.”

“I have confidence that all departments will continue meeting constituent needs with current staff levels,” he said.

The summary included with the budget document reads: “In order to achieve a zero tax increase and maintain approximately the same level of services as in FY21, the City has left 9.5 positions unfunded for FY22.”

Donegan on Monday said he is concerned with the lack of additional staffing, specifically needed positions within the Planning and Canvassing departments. * Hopkins said the budget plan fully funds the city’s contributions to local and state pension funds, as well as other post-employment benefits, or OPEB, contributions.

“You may recall last year, OPEB was funded only for one half of the actuarial determined amount,” he said.

The budget additionally funds roughly $2.4 million in contractually obligated salary increases and a $1.9 million increase in health insurance costs. * The mayor also reflected during his remarks on the past year living under the pandemic. He specifically praised Senior Services Director Steve Craddock and Fire Chief James Warren for their efforts leading the local vaccination clinic.

“One year ago, I served as a member of the City Council while our city and state only began to see the difficult and challenging impacts of the COVID-19 pandemic. Little did we know how our daily lives would be touched by this historic and dreaded disease,” he said. “It has been an agonizing year in so many ways for our residents, families, and local businesses, especially our restaurants and small retail owners … Our community, as always, has shown resolve in its will to succeed and resourcefulness in how we kept going. With the acceleration of vaccines, I am hopeful we are at the beginning of the end to returning to the new normalcy we will experience going forward.”

budget, taxes

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