Mayor wants school budget oversight

Proposes commission, says ‘huge tax increase’ looms without significant action to cut deficit

By JOHN HOWELL
Posted 1/16/25

Frustrated by a surprise $9-million school deficit projected in the current operating budget and the absence of a School Department plan to straighten out its finances, and with a lack of confidence …

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Mayor wants school budget oversight

Proposes commission, says ‘huge tax increase’ looms without significant action to cut deficit

Posted

Frustrated by a surprise $9-million school deficit projected in the current operating budget and the absence of a School Department plan to straighten out its finances, and with a lack of confidence in the information he’s getting, Mayor Frank Picozzi aims to create a five-member commission to take control of school finances.

Establishment of the commission – which would be made up of three mayoral nominees requiring council approval, plus appointees of the superintendent and the School Committee chairman – would need City Council and General Assembly approvals.

A resolution calling for the creation of a commission was introduced at Monday’s Council meeting. On Tuesday, Picozzi said he has talked about the matter with K. Joseph Shekarchi, speaker of the R.I. House of Representatives.

In order to expedite the process, the mayor said yesterday, he has requested a special council meeting next week.

“I want to move quickly … I’m not going to sit back and let the people who made the deficit fix the deficit,” Picozzi said. Without making significant cuts in the deficit, he said, taxpayers would face a “huge tax increase.”

Picozzi pointed out that schools finished the 2024 fiscal year, ending June 30, 2024, with a deficit, although that number is not final. Auditor General David Bergantino, who met with city and school officials on Monday, said the operating deficit for FY ’24 was $1.3 million, but because of “carryovers” from the prior year, the deficit is closer to $400,000.

“This just didn’t happen overnight,” said Picozzi. Furthermore, he said, looking at the deficit from the prior year and the fact that schools received about $1 million in additional state funding after the city bumped the school allocation by $2.3 million pushes the deficit to $10 million … “and they can’t fix it.”

As he learned when he was at the State House for the governor’s State of the State Address on Tuesday night, Picozzi said, he is getting pushback to a commission from the Warwick Teachers Union, which he said has started lobbying council members and state legislators  to kill it.

Other budget commissions

The concept of a comprehensive budget  commission is not new.

City Finance Director Peder Schaefer served on such a commission overseeing Woonsocket finances when then-Gov. Donald Carcieri cut state aid to schools by 10% across the board during the 2007-2008 recession. For Woonsocket, where state funds made up 90% of school revenues, it was a huge cut. But in Warwick, where state aid was 30% of the budget, it wasn’t as much.

The Woonsocket commission prepared the budget, approved contracts, retained consultants, hired personnel and changed rules and regulations. Using the legislation that allowed for budget commissions in Woonsocket and East Providence, Schaefer and the mayor changed references to a municipality to references to a school department.

“It’s not draconian,” Schaefer said of a commission. He reasons the city administration lacks confidence in school reports. He questions whether the projected $9-million deficit is accurate and whether the number could be higher or lower based on what have been classified as operating and capital expenditures.

“You need someone on top of this,” he said.

Commission would have office, staff

Picozzi envisions his commission appointments as being professionals with school experience, such as former school finance officers and superintendents. He sees commissioners as being paid a stipend, having a city office and a paid staff member. Although they would have extensive financial powers, he does not see them as having the ultimate say. For example, while they may negotiate contracts, approval of those agreements would rest with the superintendent and the committee.

Picozzi said he’s not willing to gamble that the school administration and School Committee will set things straight.

“We can’t risk that they’ll fix it,” he said. His concern is that a school deficit debacle could impact the city’s bond rating, driving up borrowing costs for the city and schools and severely impacting taxes. His hope is that rating agencies will look favorably on the city for being proactive in forming a credible commission working to address the problem.

School Committee Chairman Shaun Galligan said the mayor informed him and Superintendent Lynn Dambruch of his proposed commission on Friday. He said he is waiting to see the proposed legislation that would enable the commission before commenting.

“While awaiting the mayor to send me a draft of his proposed legislation, my focus remains on working collaboratively with the city administration, City Council, school administration and the Office of the Auditor General to address the projected fiscal deficit for FY25 without impacting student achievement or resource needs,” he wrote in an email.

“I do not see a special commission necessary at this time, as it could make matters more complicated for all stakeholders, given that the state has protocols to address situations such as this,” he added.

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