Photo of the Mayor delivering the State of the City from the Mayor’s Office.

Governor, Mr. President, honorable members of the Providence City Council, distinguished guests, and my fellow residents of our great Capital City –

One year ago I stood before you in this Chamber with an urgent message for our City and the entire State of Rhode Island. Providence was in peril. Despite many difficult decisions and painful sacrifices made to pull Providence back from the brink, we were still $22 million short of closing a $110 million structural deficit.

Crucial steps necessary to navigate our City safely through our Category 5 fiscal hurricane had not yet come to pass. We still needed to reform our unsustainable pensions. And we needed Providence’s large, tax-exempt institutions to contribute more.

As I stood before you on February 13, 2012, Providence was running out of cash, and running out of time. In the months that followed, there were some who said Providence could not avoid filing for bankruptcy.

BACK FROM THE BRINK

Today it is my privilege to deliver a much more hopeful report on the State of our City: Providence is recovering.

Through collaborative efforts and shared sacrifice, we have all but eliminated our City’s $110 million structural deficit, and we expect to end this year with a balanced budget. Working together, we have accomplished what few believed possible.

We were determined to address the root causes of Providence’s fiscal emergency and prepared to act unilaterally if necessary. And we knew our City would never achieve a lasting recovery without addressing our unsustainable and spiraling pension costs.

In April, following months of actuarial analysis and public testimony, this City Council unanimously approved a pension reform ordinance that put Providence’s pension system on a sustainable path.

We recognized that passing the ordinance would likely lead to a high-stakes lawsuit with no real winners – because a decision in favor of the status quo would push our City over the brink. However, faced with the challenge of negotiating pension changes with more than 2,000 retirees who were not represented by a single entity, we saw no alternative.

Continue Reading…