Why Warwick can't afford to borrow $350 million

Posted 2/23/22

To the Editor,

Warwick voters may soon be asked to authorize $350 million in borrowing to construct two new high schools. 

 When additional borrowing for elementary and school …

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Why Warwick can't afford to borrow $350 million


To the Editor,

Warwick voters may soon be asked to authorize $350 million in borrowing to construct two new high schools. 

 When additional borrowing for elementary and school repairs, construction of an outdoor skating rink and open space preservation, borrowing could grow to over $400 million. 

Sometimes it is difficult for people to wrap their head around these huge numbers. To better understand this, I compare a family increasing its borrowing, as much as Warwick may.

With current city borrowing at $57 million, new borrowing would increase by approximately seven times. Imagine a Warwick family with $200,000 in debt and annual payments of $11,000 needed for the next 20 years. Increasing borrowing seven times would mean an additional $1,400,000 in debt.  The annual payment would grow to $103,000. What effect would that additional borrowing have on other spending priorities. How could the family afford those payments without going bankrupted? 

My analysis concluded that Warwick property tax revenue will need to increase by $40 million if new borrowing and current spending trends continue.

For the Warwick family, credit agencies would never approve a $1.4 million loan.  Warwick’s current debt limit is approximately $180 million. The frightening thing is that state law would allow the city to exceed it debt limit by hundreds of millions of dollars.  

Is raising the debt limit for a family struggling to meet its current debt payment obligations a prudent decision?

For a Warwick homeowner with a $300,000 assessed home, the current property tax of $5,619 would increase by almost a $1,000.  In five years’, that payment could increase by a third to over $7,500. For families with a larger assessed home, the cost would be even larger. Combined with new sewer assessment fees for some, how many homeowners will no longer be able to afford to continue to live in Warwick?

A fiscally responsible individual would never borrow sums like this unless they understand the ramifications that new debt will have on all other spending priorities, have full disclosure of the actual cost, and develop a plan to make the necessary payments on that debt.

Warwick has over $1 billion in combined pension, healthcare, and bonded debt. You need to look no further than the programs and services eliminated from city and school budgets for the impact of this uncontrollable debt.

Over the last decade, more new tax dollars have been spent on retiree employee benefits than any other expense in the city. Twelve million dollars are spent each year for free lifetime healthcare benefits for retired city employees. That includes family plan prescription coverage cost capped at $600 a year that has been in effect for a decade.  Warwick schools spend $500,000 a year on retiree healthcare.  The reason that expense is 24 times less than the city is that at age 65 school retirees no longer receive the benefit.

City leaders have failed our children because they have been afraid to confront these out-of-control expenses and demand reforms from organized labor. Warwick can’t afford to borrow $350 plus million to build two high schools until long term planning is put in place and these unsustainable costs are cut. Only then can these savings be reinvested back into needed programs and services, like borrowing for new schools.

Warwick taxpayers must demand that our elected leaders produce short- and long-term projections and disclose to the penny, how much higher our property taxes will increase. That will be the only way citizens can make an informed decision if paying thousands of dollars in new property taxes for new schools, ice rink, open space, and anything else is affordable.

Robert Cushman


Robert Cushman is a former Warwick City Councilman and School Committee Chairman. 


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