Providence Mayor Smiley talks school funding settlement with the State and property tax increases

"We are still advocating for the return of schools as soon as possible. The City Council, the School Board, and I are unified on that front," said the Mayor.

Providence Mayor Brett Smiley answered reporters’ questions about the City’s settlement with the Rhode Island Department of Education on funding for the Providence Public Schools, which have been under State control since 2019. That takeover, under two governors - Gina Raimondo and Daniel McKee - and one Education Commissioner - Angélica Infante-Green - can be considered a failure. This was expected, of course - no State takeover of a municipal school system has ever succeeded. As Dr. Domingo Morel, an associate professor of political science at Rutgers University and the author of a book on school takeovers, warned near the beginning of the State’s takeover of Providence Schools, “School takeovers don’t work... They think long-term problems can be addressed in one or two years.”

The City and the State have been embroiled in a dispute over how much the City owes to fund the Providence Public School system properly. Recently, a superior court judge ruled that the City owes money, and yesterday, the settlement details were released. As part of the agreement, the City of Providence will provide PPSD: 

• An additional $4 million for Fiscal Year 2024, bringing the City’s total contribution for that fiscal year to $134 million; 

• An additional $11 million for Fiscal Year 2025, bringing the City’s total contribution for that fiscal year to $146.5 million; 

• A $147 million total contribution for Fiscal Year 2026 (which equates to an $11.5 million increase from the City’s initial allocation for Fiscal Year 2025 of $135.5 million); and 

• A $147 million base contribution for Fiscal Year 2027, plus a percentage increase matching the percentage increase in total State educational aid in that fiscal year.

The settlement prevents severe cuts to City services and education funding that would have had incalculable impacts on Providence but will, said the Mayor, require a property tax increase of over 4% in 2025. Students and public education advocacy groups worked hard over the last three weeks to push back against possible cuts to schools and City services. See:

• Community organizations call on the City of Providence to fully fund public schools

• Providence students march on City Hall to demand full funding

• Providence facing court judgment that “could potentially devastate our City and residents,” said Mayor Smiley

• An open letter from PVD School Board member Ty’Relle Stephens

Here’s the video of reporters asking the Mayor about the settlement:

Providence Mayor Brett Smiley: I’m happy and relieved to report a settlement and that the longstanding funding fight between the Providence Public School District and the City of Providence has been resolved. Most importantly, the students of Providence, their parents, and the teachers in the school system now have certainty, and hopefully, no anxiety, that the threatened cuts won’t go through. The taxpayers of Providence should have some relief knowing that there will not be a mid-year tax increase and that we now have predictability and additional transparency in the school department’s budget for the years to come. This funding fight, which predated me, has been going on since 2019 and has been a major hurdle for us working together collaboratively and cooperatively. I’m hopeful that it’s now resolved and resolved two years going into the future, [so] that we can all focus on the task at hand, which is delivering better results for the students of Providence, raising student outcomes, and having a school system that works better for all of our kids and families.

Reporter: Have you figured out how the City will make that payment?

Mayor Smiley: Roughly. The $15 million is a combination of $4 million for fiscal ’24, last year, and $11 million for fiscal ’25, which is the year we’re in now. We will take all remaining ARPA dollars and commit them to revenue recovery because we need them now. We have $3 million in energy credits, which will be applied and counted toward the $15 million. As was reported and offered a couple of weeks ago, we also had a million dollars in additional PILOT revenue, which was new revenue after the budget was passed. Then, we expect to have to find budget savings.

The hiring freeze and the non-essential spending freezes announced earlier this week will stay in effect through the end of the fiscal year, June 30th. What that means is that the other cuts that we were afraid we might have to make if the worst had happened in court - remember that what was proposed in court was between $11 and $55 million. We settled at $15 million, so we will not have to delay the police and fire academies. We can make the grants promised to the community, and student support groups like the libraries and rec centers will stay open. All of those budget items that were promised will be fulfilled.

We will have to do a tax increase in excess of the cap next year for fiscal ’26. I’ll introduce my budget in April, as is the traditional timeline, and when that is introduced, we will know exactly how much additional tax revenue we’ll be seeking. However, it is certain to be over the 4% property tax cap so that we will go to the General Assembly for approval. I will be requesting that the City Council provide us with a resolution supporting that cap increase. We plan to do that only once. It will be a one-time excess of the cap for fiscal ’26, which is the next fiscal year.

Steve Ahlquist: Are we still looking to get the schools back under Providence’s control?

Mayor Smiley: We are still advocating for the return of schools as soon as possible. The City Council, the School Board, and I are unified on that front. We know that the K-12 Board of Education had said up to three years, which would be ’27. That’s the outer edge, but we’re trying to bring that back earlier, and I would like them back as soon as possible.

Reporter: When will the School District get a check from the City?

Mayor Smiley: The City Council has to approve the settlement, and then the payment comes five days after Council approval. The first payment is $5 million.

Reporter: What is the City doing to get the public schools back?

Mayor Smiley: In addition to our public advocacy, there has been discussion amongst State legislative leaders about trying to bring the takeover to a conclusion. The City - and this has been part of the dilemma - we don’t get to decide when the takeover is over. It’s the Commissioner’s recommendation to the K-12 board, which they then ratify in a vote. That has happened. The only way to force the takeover to end faster is through legislative action or to make the case publicly so the Commissioner and the K-12 Board might decide to end it sooner. It is a good sign that when the K-12 Board passed that order in September, they didn’t say three years; they said ‘up to’ three years.

In addition to public advocacy, it’s also about demonstrating that we’re ready. That’s why we’ve been hard at work. The City convened the Return to Local Control Cabinet a year ago, and we have been hard at work. This isn’t just pounding the table but also doing the work to ensure we’re ready to take our schools back.

Reporter: You’ve been advocating for increased transparency when it comes to the school department budget. Have you made any progress on that?

Mayor Smiley: Yes. One of the components of the agreement that the court ordered based on our request is a fiscal review of the School Department’s budget. That has been agreed upon and will commence very soon.

Reporter: A lot of back and forth between the District and the City. I imagine it has to be some relief to get this done in the end, right?

Mayor Smiley: Absolutely. The negotiating process has been very stressful and hard on everyone involved. There were more than a few moments when teachers, moms, and kids would come up to me and say, "Mayor, I don’t care whose fault it is. Just figure it out. Can’t all the adults get in the room and figure it out?"

I’m very sympathetic to that message, and honestly, the mother who said that to me was right. It wasn’t easy, but the adults got in a room, and we finally figured it out. It is a great relief that that chapter is now closed and that we can all focus on what’s most important, which is improving outcomes for these kids and their families.

Reporter: Some members of the General Assembly representing Providence have already said they will not support a tax increase over the cap. They want you to find PILOT payments or other ways to fund this. What’s your response to that?

Mayor Smiley: I’ll make my case to any member of the General Assembly, whether they’re from Providence or not, that this is a necessary step. Now, I won’t be putting all of this new funding on the shoulders of taxpayers in Providence. I understand that families are strained. Higher property taxes mean higher rents and a higher cost of business, so it’s not fair to put that exclusively on them. The tax increases will be matched with cuts, fiscal restraint, and belt-tightening in City government. We will share this burden, but it’s important that we properly fund our schools, and most of the constituents I’ve spoken to are willing to pay more taxes for better schools. This is an appropriate and important use of tax dollars. Taxpayers want to know that the money’s being well spent, that there’s transparency about how that money’s being spent, and that there’s hope that there will be better outcomes for additional money.

That’s our job—to help ensure that happens. I feel confident that I can make the case that this tax increase would be justified and well-spent on behalf of the kids in Providence.

Reporter: Mayor, what do you say to business owners in the City, particularly in this part of town where the impact will be disproportionate?

Mayor Smiley: It is true that while the business community will bear some of the burden of this, it is also true that the business community has a stake in excellent public schools. People want to live in a community that has excellent public schools. People want to shop in a community that has excellent public schools. Employers want to move to a community that has excellent public schools. So their interests and ours are the same: we all want great schools that we can be proud of, and we’re going to have to pay for that, as I’ve always done.

We will try to balance the burden, and I will not put it exclusively on businesses as opposed to homeowners. We will share that burden. I will also show that we are leading by example by making cuts and sacrifices in City government so that they’re not just continuing to pay more and more.

Reporter: How long is the fiscal review expected to take? What happens if you find something that you disagree with?

Mayor Smiley: We expect the review to take about a month. Now that we have settled on the funding, we hope that our relationship can work collaboratively and move forward from the fiscal review and beyond.

I never doubted the State and District leaders involved. We all care about the kids and their families, but getting past this funding conversation was impossible. It always came back to funding. Now that that is resolved with certainty and predictability for the next three years, we can finally start working together on all these other things. They agreed to the fiscal review, which I take as a sign that they will also work collaboratively with us on whatever might be discovered.

Reporter: How is this going to affect the City’s bond rating?

Mayor Smiley: I don’t believe this will negatively impact our bond rating. We have and will continue to be transparent with the ratings agencies. They know about things like ongoing litigation. Their concern is that we continue to run a financially responsible budget. Honestly, that’s one of the reasons I’m seeking a tax increase: borrowing to pay a bill or not doing things like fully funding our pension obligation is officially irresponsible. The bond rating agencies aren’t giving us a demerit for raising taxes. They’re going to give us a demerit for having a structural deficit. That’s why I have been and will continue to be fiscally responsible, even if it means a broader burden for some of our taxpayers.

Mayor Smiley spoke to reporters after signing the City’s Comprehensive Plan. Here’s the press release from the Mayor on that:

Mayor Smiley Signs Comprehensive Plan, Charting Providence’s Growth for the Next Decade 

Providence Mayor Brett Smiley today joined City Council President Rachel Miller, City Plan Commission Chair Michael Gazdacko, West Broadway Neighborhood Association (WBNA) Executive Director Siobhan Callahan, and Department of Planning and Development Deputy Director Bob Azar to sign Providence’s new Comprehensive Plan, a visionary roadmap designed to guide the City’s growth, resilience, and prosperity over the next decade. This milestone reflects years of collaboration with neighbors, businesses, and civic leaders. It underscores the City’s commitment to preserving its unique character while addressing critical challenges such as housing, climate change, and economic development.  

“In an era of complex challenges, a well-crafted plan is our strongest foundation,” said Mayor Brett Smiley. “This Comprehensive Plan, shaped by invaluable input from our neighbors and community members, tackles major issues like the housing and climate crises and provides a blueprint for a vibrant, resilient Providence that offers opportunities for everyone.” 

Mandated by the State of Rhode Island every ten years, the Comprehensive Plan serves as a holistic guide to urban development, with goals and strategies on a range of topics that shape the City’s future, including land use policies that guide where and how Providence grows. The newly adopted plan focuses on housing, land use, economic development, mobility, City services, sustainability, tourism, culture, and more. The plan, drafted by the Smiley Administration, was adopted by the City Plan Commission in June and approved with amendments by the City Council in November. 

The new Comprehensive Plan outlines a framework for updating Providence’s zoning ordinance to increase housing opportunities throughout the City. Addressing the significant strain on the local housing market, the plan promotes zoning changes that support diverse housing options in every neighborhood. These changes are designed to alleviate market pressures and ensure that individuals and families across all income levels can secure a home in Providence. By legalizing accessory dwelling units citywide, allowing ‘missing middle’ housing types by right, and expanding areas where small apartment buildings are permitted, the Comprehensive Plan addresses Providence’s housing shortage head-on, expanding historic preservation efforts and establishing new design standards.  

Notably, the plan emphasizes integrating economic development with environmental stewardship, addressing climate challenges while enhancing residents’ quality of life. The Sustainability Chapter introduces robust goals to improve air quality, mitigate heat, and manage stormwater, particularly in frontline neighborhoods disproportionately impacted by climate change and pollution. It advocates for cleaner industrial practices, expanded air quality monitoring, and resource prioritization for green justice areas, ensuring sustainable and equitable growth. 

“This Comprehensive Plan represents a historic commitment to the people of Providence,” said Council President Rachel Miller. “Shaped by extensive community input, it’s a bold vision that puts working families first, ensuring that as we grow, we grow together. The plan addresses urgent challenges from housing affordability to climate justice, laying the foundation for a stronger, more equitable City for all who call Providence home. I’m proud of the collaboration that made this possible and ready for the work ahead to bring this vision to life.” 

Highlights of the Comprehensive Plan include strategies to:  

• Expand housing options and address affordability amidst a national housing crisis.  

• Advance sustainable practices to combat climate change and enhance resilience.  

• Promote equitable economic development and job creation.  

• Support and preserve cultural assets that celebrate Providence’s diversity. 

• Make it safer and more convenient to move around Providence by alternative modes of transportation. 

“The City Plan Commission’s work on the Comprehensive Plan reflects our commitment to creating a Providence that thrives for all its residents—today and for generations to come,” said City Plan Commission Chair Michael Gazdacko. “After many evenings of deliberation and discussion, we were proud to approve the Comprehensive Plan put forward by Mayor Smiley and the Department of Planning and Development, who have been exemplary leaders in developing thoughtful, inclusive, and robust civic engagement throughout this process.” 

The Comprehensive Plan was developed over two years of public engagement led by the City’s Department of Planning and Development. The department integrated feedback from thousands of neighbors, business owners, and members of neighborhood groups, collected over more than 90 public meetings and events held across every Providence neighborhood. 

"The political moment in which we now find ourselves speaks to how important it is to lean into local engagement,” said WBNA Executive Director Siobhan Callahan. “The work that went into this Comprehensive Plan is a great example."

“This is the third time I’ve been a part of developing a new comprehensive plan, and I can say that this has been by far the most robust, inclusive, and rewarding planning process yet,” said Department of Planning and Development Deputy Director Bob Azar. “In a City as wonderfully diverse as Providence, creating a community-wide plan is challenging. We have to somehow find consensus around policies to tackle our greatest challenges. In seeking that consensus, we run the risk of sacrificing ambition. But that’s not the case here — this plan is full of big and bold ideas and points towards a bright future for Providence.” 

The complete Comprehensive Plan is available online here.