12/3/09

If East Greenwich has Financial Troubles, Things are Really Bad

Make no mistake about the financial pressures weighing down on RI cities and towns these days. Case in point: East Greenwich officials are warning that the town will be in trouble if the state continues to hold back quarterly state motor vehicle excise taxes, as it is indicating it might have to do. In East Greenwich's case this would lead directly to a $330,000 operating deficit. Now, this is East Greenwich we're talking about here, one of the state's wealthiest communities.

The state's financial problems are serious enough, and now we're seeing how those problems are impacting local communities. Part of the bigger problem are the costly mandates that are imposed on communities that come with no financial assistance provided. In East Greenwich's case - and this is true of all communities - special education mandates are especially punishing. As the ProJo reported("Lawmakers oppose withheld payment," Decmber 2nd))educating a single special needs child costs between $150,000-$200,000 a school year. One of the other major problems facing our cities and towns is their unfunded pension liabilities, which are heading to insolvency.

Things are getting so bad at the local level that there's talk brewing about withholding funds normally collected at the local level that then get transferred to the state. That, plus ignoring mandates deemed too costly.

We could see a municipal revolt next year.