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Divided Council Vote Calls for 1 Percent Across the Board Budget Cut

Members of the City Council sparred over next year's budget after a 1 percent across the board cut amendment passed in a 4-3 vote.

The challenging budget situation facing city leaders and the City Council was evident at Wednesday night's City Council meeting during which a measure calling for across-the-board one percent cut to the budget passed in divided, 4-3 vote.

The measure, proposed by Councilor Kate Leonard, was in response to Town Manager Jane Howington's list of potential cuts to the budget provided in response to a council request at their last meeting after a similarly divided vote called for the City Manager to revise the proposed budget to include a no-greater than 2 percent tax increase.

The proposed budget, which calls for a 3.62 percent increase, is based on a hands-tied situation the city faces with $1.4 million for bond payments, $850,000 in contractual obligations for city employees and a $400,000 increase to the school budget weighing heavily on the overall budget. 

Howington's list of proposed cuts to bring the budget down to no more than a two percent increase included severe cuts such as skipping the annual payment to the Other Post Employment Benefit fund (OPEB), the dismantling of major parks and recreational programs, transferring expenses from the general fund into the water department, among other items.

That list was "disappointing," said Councilor Mike Farley, who said the proposed budget increase of 3.62 percent is "unacceptable" noting some of the severe cuts proposed by Howington "have already been outright rejected."

"That's the reason I believe Councilor Leonard put forth the across the board one percent administrative cut," Farley said. "It's disappointing we have to reach down to this level to get cuts we need but we're trying to be responsible stewards of the taxpayer's money and if you look across the island and see the tax increases in other communities, we're far above."

On the other hand, Councilor Justin McLaughlin said the list of draconian cuts were to highlight just how little room the proposed budget has to make cuts. If the measures seem severe, such is the effect of slashing the budget on the city's ability to meet the public's expectation of a certain degree of quality of life and services, he said.

"I don't think the city manager is recommending anything on the list," McLaughlin said. "It's easy to say 'just cut the budget by one percent' when a one percent cut to the schools will be $200,000 and they're asking for $900,000 more than we're already budgeting to them."

McLaughlin said there are no simple solutions to the matter — a sentiment echoed by Councilor Naomi Neville, who said the one percent cut is "the easy way out" and a way for council members to "not take responsibility."

But Leonard said it's not uncommon in the business world for department or division heads be instructed to cut the budget by 1 percent, in essence, following a "make the cuts and tell me what you cut after you've made them" approach.

Leonard's suggestion implies that the measure could curb waste and excess by nature of departments engaging in self-preservation to keep impacts minimal.

"I don't think it's unreasonable at all," Leonard said.

"But you'll find out what the cuts are later," Neville remarked. 

Both Farley and Leonard remarked that the suggestion to cut OPEB is not viable, especially after the city has been making its payments for the last few years. 

Ron Becker, a member of the city's finance review committee, said the fact that the city has been meeting its long term funding obligations is something that distinguishes Newport from other communities, which face increasingly crippling pension and OPEB liabilities.

"Not [making the payments] now would send a poor message, and to our employees," Becker said.

The budget must be approved by June 11 and the City Council can make amendments to the budget between now and then.

In the meantime, the council has its work cut out for itself. 

"There are no simple solutions," McLaughlin said. "We have a lot of difficult decisions to make."

Councilor Farley invited the public to make recommendations as to where the budget can be trimmed or new revenue can be found. 

"If anyone has ideas where we can cut taxes or spending, just let me know and we'll submit a budget revision and four votes will knock it out of the budget," he said.

George Costanza May 31, 2014 at 10:35 AM
Taxpayers need to come out and let their presence be known. It's about time we stand up for transparency and accountability. What I am not going to let happen (1) "kick the can down the road" on our public employee health care obligation (2) raise taxes (3) shift more expenses on to our already "water bill tax". We need to start reducing our City budget, and that means laying people off, shrinking and eliminating departments, and making our City more efficient and less costly. We promised a lot of baby boomers gold plated pensions and benefits, and the only way to pay for those is sacrifice to all
peter May 31, 2014 at 11:47 AM
In a coincidence of email, I just saw this article along with a Seth's blog entry entitled "The tyranny of lowest price." No easy answers to the budget, but I recommend reading it and applying the thinking it contains to city management and the costs of things. http://sethgodin.typepad.com/seths_blog/2014/05/the-tyranny-of-lowest-price.html
John H Hedley May 31, 2014 at 12:42 PM
Too bad half the land south of Memorial is no longer on tax rolls (lookin at you Salve, Aquidneck trust, Newport preservation.....) I guess taxing the 99% is how mayor handlebars can clear the riff raff out for his 15 buddies.
George Costanza June 01, 2014 at 09:58 AM
"Seth's Blog" which I just read, has no relevance to the discussion of the budget. The reason is because Newport's government has no competition. The budget has been increasing at between 2 to 5 times the rate of inflation for the past 20 years. This year the city is giving "contractually obligated" raises of $1 million to school teachers. Who signed that contract? The idea of "automatic raises" is ridiculous and a holdover from the 1950's. Nobody offers automatic raises. And in a town where many people are being laid off, seeing the hours cut, and otherwise not receiving wage growth, its sad to see the government take from those who have less to spare and give to those who need it the least.

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