Mayor Elorza: ‘Massive layoffs’ on the table if state doesn’t pass budget

PROVIDENCE, R.I. (WPRI) – Providence Mayor Jorge Elorza is warning that his city could see “massive layoffs” if General Assembly leaders can’t come to terms on a state budget for the fiscal year that started July 1.

In response to a R.I. Department of Education (RIDE) memo that showed school districts and charters schools could lose out on $45 million in new funding if they are forced to work off of last year’s budget appropriation, Elorza said the deficit that would follow could only be erased by letting workers go.

“If the budget impasse is not resolved within the next few weeks, the impact will be devastating to cities and towns,” the first-term Democrat said in a statement issued Monday. “Providence stands to lose over $10 million in our schools alone and this deficit can only be closed by massive layoffs. Cool heads have to prevail and a budget has to be passed as soon as possible to prevent layoffs and cuts as we head into the next school year.”

Asked Tuesday to clarify the mayor’s comments, a spokesperson for Elorza said layoffs will be on the table if the state doesn’t approve a budget.

Both the House and Senate approved budgets that included $45 million in new funding for schools, but the two sides have been unable to agree on a finalized $9.2-billion tax-and-spending plan since the Senate made a slight adjustment to the proposal on June 30. House Speaker Nicholas Mattiello responded by sending his colleagues home for the summer.

Because Rhode Island law requires state departments to operate with the same funding levels as they had in the previous year when a new budget isn’t approved, money that was earmarked for cities and towns is also based on the 2016-17 budget.

In Providence’s case, the school district could receive $12.5 million less than it anticipated if the budget isn’t approved at all. While it’s unlikely state leaders would go a full year without a new budget, Education Commissioner Ken Wagner has warned “there is no guarantee that local communities and school districts will be made whole” once a budget is approved.

City leaders approved Providence’s $736.7-million budget for the 2017-18 fiscal year last month under the assumption the General Assembly would approve a state budget that included $247 million for city schools and another $53 million in various forms of state aid and taxes. Without a new state budget, the city would only be slated to receive $235 million for schools and about $50 million in other aid. About 76% of the city’s school budget goes to salaries and benefits of all employees, including teachers and administrators.

If Providence is forced to resort to layoffs to cover a school deficit, it could face another challenge. State law requires that teachers be notified if they are being laid off by June 1, which means the city would not generate savings if it let teachers go in the coming months. Layoffs become even less likely once a school year begins.

That would likely mean the city would have to consider layoffs for other school employees, like administrators, teacher assistants, bus monitors or clerical workers. It’s unclear how many employees would need to be laid off.

Spokesmen for both Mattiello and Senate President Dominick Ruggerio have not indicated whether lawmakers will return to work in the near future.

“Speaker Mattiello urges the Senate to come back into session and pass an un-amended budget that was overwhelmingly approved by the Senate Finance Committee and agreed to by the Senate president, the speaker and the governor,” Larry Berman, a spokesman for Mattiello, said. “This budget, which is still in the possession of the Senate, contains significant municipal and education aid that communities such as Providence expect and need.”

Greg Pare, a spokesperson for Ruggerio, said the House should return to pass the Senate’s version of the budget.

“The Senate passed a responsible budget that would provide increased aid to communities and school districts across the state,” Pare said. “The Senate did not change one cent of spending from the budget that passed the House. The budget was the first order of business the Senate considered on June 30, before proceeding to conduct business on many other important matters pending before us. Had the House been in session on June 30, as they had been scheduled, they would have had the opportunity to consider the budget at that time.”

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Dan McGowan ( dmcgowan@wpri.com ) covers politics, education and the city of Providence for WPRI.com. Follow him on Facebook and Twitter: @danmcgowan