Smithfield’s school, fire station bonds called into question

Smithfield’s school, fire station bonds called into question

Warning of four straight years of tax increases

SMITHFIELD – Apprehensive about the upcoming $45 million elementary school reconfiguration and $4.5 million fire station bonds, local state representatives met with town department heads Tuesday morning to discuss the possibility of lowering bond debt.

Sen. Stephen Archambault and Reps. Thomas Winfield and Gregory Costantino met with Town Manager Randy Rossi, Supt. Judy Paolucci, Town Council President Paul Santucci and Vice President Al LaGreca, and School Committee Chairman Sean Clough to discuss the ramifications of taking on significant debt.

The House Finance Committee reacted to the bonds with a lukewarm reception, Winfield said, with many fearing that taking out the bonds would leave the town vulnerable to an emergency situation. If approved this fall, the bonds would nearly maximize the town’s possible bond indebtedness, he said.

Currently, the town’s indebtedness is at $21,225,000, with a legal limit of $82,478,910. Adding the $50 million debt would put the town at $71,225,000, $10 million shy of the limit.

Paolucci said waiting to fix the school buildings could cost more in the future, and with current incentives, now is the time to act. Gov. Gina Raimondo has proposed bonding out $250 million for school infrastructure in this year’s budget. Paolucci worked with the Rhode Island Department of Education to create the elementary reconfiguration project, hoping to maximize on state incentives.

“We’re not going to get any of that money if we don’t have you fighting for us. What I fear is that five years from now, we’re putting the taxpayer at a huge disadvantage,” Paolucci said.

Also, in the face of an upcoming statistical revaluation affecting 2019 tax bills, and a full revaluation in 2021, the representatives called Tuesday’s meeting to ensure the town understands the tax implications of taking out the loans.

“Knowing that this bond is going to result in four successive years of tax increases, tax increase are inevitable, and that’s what concerns us,” said Archambault.

He said tax rates would increase by 3.8 percent in the year 2020, 4 percent in 2021, 3.7 pecent in 2022 and 3.3 percent in 2023, including estimated growth in town and school spending.

Compounded with the senior tax freeze, a large portion of the burden would fall on the taxpayers who are not senior citizens, projected to be around 60 percent in 10 years. Santucci said though many people believe taxing seniors would cause them to leave the town, he said he was concerned about the opposite happening.

“The thing that I am most concerned about in this town is the non-seniors ability to continue to pay the increases that they’ve been paying,” Santucci said, adding, “If they do (move), you’re not going to have a senior tax freeze, because no one will be able to afford it.”

Rossi explained that the numbers include the lowest state reimbursement the town can accept, at 40 percent. But, if the governor’s $250 million school infrastructure bond to be voted on in the November election does not pass, the whole plan falls through. If it does pass, incentives could increase reimbursement up to 55 percent for the elementary school project.

Winfield questioned Rossi on the use of the rescue billing fund to create a zero-increase budget.

“If you look back over a short period of time, and didn’t take that money, we could have paid for our fire department, we could have paid for that bond,” Winfield said.

Rossi agreed, but said the practice of balancing the budget with the “self-sustaining fund” occurred over the past 25 to 30 years. He said though he’d “love to not use any of those funds,” he said phasing them out can’t happen overnight.

Town officials and members of the town’s General Assembly delegation agreed that fact-based literature regarding the bonds needs to be distributed to the residents prior to the vote, with both best-and worst-case scenarios, which would be included in the tax bills sent out at the end of July. Residents would vote on the bonds during the November general election.

Comments

After reading this article it sounds like there is major financial shell game going on in Smithfield. The Taxpayers in Smithfield will continue to get hammered year after year as a result of poor financial mamnagement overseen by inept Town Councils.This is especially true after last year's 5 percent tax increase .Those members of the Town Council who voted to allow these bond issues to
move forward at the same time the Town's bonded indebtedness will virtually be at its maximum capacity is irresponsible . The Town Manager ,who was also the former Finance Director ,should have put his foot Town and took the time to analyze the long term financial implications to Smithfield before going along to get along with an irresponsible Town Council. It is also my understanding that Councilman LaGreca and Councilwoman Cavanagh are also recipients of the senior tax freeze .
How can these elected officials make financial decisions that effect
60 percent of taxpayers when they have no skin in the game?

It more than obvious that new leadership is needed in Smithfield. Hopefully, this election will bring major changes to Town government resulting in financial leadership that the Town so badly needs. The Town runs the risk that consecutive major tax increases will result in financial instability . This instability will prevent businesses from moving to Smithfield. The lack of business expansion will create an environment that will inhibit the growth of the Town's commercial tax base . The heavy tax burden on the residential homeowners will continue to escalate . In the end, there will be a mass exodus from our beautiful town and ultimately Smithfield will earn the dubious distinction of being one of the highest taxed towns in the State of Rhode Island .