By Robert Cushman
Warwick Mayor Frank Picozzi has only been in office for a little less than two years. In that short time total spending in the city has increased almost $20 million without a tax …
By Robert Cushman
Warwick Mayor Frank Picozzi has only been in office for a little less than two years. In that short time total spending in the city has increased almost $20 million without a tax increase.
What magic formula has Mayor Picozzi discovered that allows him to freely spend tens of millions of dollars and not raise taxes?
The answer is that the mayor is using one-time revenue sources to fund this spending.
As early as next year, taxpayers could be faced with the stark reality that they are going to have to pay for all of this in one massive lump sum of new taxes.
To fund the city and school budgets Warwick relies on almost 70 percent of the revenue from property taxes we all pay. The remaining portions come from state and federal funds, other local income sources such as licenses, fees, building permits. Etc.
Since 2021 the property tax portion of revenue has decreased from almost 75% of all revenue to approximately 68% in the fiscal 2023 budget.
The reason for this reduction is the elimination of the local car property tax and the state reimbursing Warwick for the lost revenue, which has resulted in a dramatic increase in state aid.
In the current fiscal 2022 budget (Y/E 6/30/2022), the mayor and the city council used $5.8 million from the city rainy day fund, plus another $5.5 million in American Rescue money. That’s a total of $11.3 million or 3.5% of all revenue to pay for all of the new spending.
In the fiscal 2023 budget (7/1/2022 – 6/30/2023) it doesn’t get any better. Spending is soaring by another $8 million, to $341,066,226. This time the city will exhaust of all the remaining one-time American Rescue Plan money by allocating $10.8 million to pay for all of that.
Mayor Picozzi in his budget address states, “ it is this Administration’s position that Warwick should, as much as possible, use these funds for one-time expenses and to reduce costs going forward”. Using $10,8 million from a one-time source or 3.2% of total revenue, is a direct contradiction to his statement.
For the past months we have heard the mayor state that citizens cannot afford a tax increase this year. (I guess we can afford a tax increase next year, with no election scheduled).
The best way to stop a tax increase from happening is to control spending. Mayor Picozzi, the city council and the school committee have done the exact opposite.
To make matters worse, an additional $4 million in revenue is budgeted from the sale of city property.
Unless the city has a continuous supply of surplus property for years to come, at some point that $4 million is going to need to be replaced by another income source. That source is your property taxes.
To recap, almost $15 million in one-time revenue or 4.4% for all revenue received is being used to pay for massive new spending in the city fiscal 2023 budget and to cover for spending in the 2022 budget. Spending appears to be uncontrollable within both the city and school budgets.
If current spending trends persist, it is likely that an additional $8 million would be needed next year at this time. That could put taxpayers on the hook for providing $23 million in revenue through property tax increases.
Remember a maximum tax increase produces approximately $8 million in new revenue.
With the re-valuation coming next year, some homeowners could literally see their property tax increase by thousands of dollars next year and continue to escalate more each year thereafter.
On top of that, if the city and voters approve borrowing of $350 million for two new schools, the overall tax increase will be so massive that state intervention may be the only solution to keep some people from losing their homes.
The only other solution is for taxpayers to demand change from the mayor and the elected City Council and School Committee to stop the unsustainable spending.
Budget hearing begin Monday, May 23 at City Hall Council Chambers. I hope you will attend and let your voice be heard.
Former Warwick City Councilman & School Committee Chairman
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