Providence approves $600M budget. Here's what's new and what is changing.

• The policy academy was bumped to May 2025 to save money on this fiscal year
• The city's commercial property tax rate, one of the highest in the country, stays the same

PROVIDENCE − The city will have a nearly $600-million budget after its approval last week, with an increase in funding for Providence Public Schools and changes to residential property taxes.

Key budget highlights:

• Projected tax collection rate increased by 0.25%, from 94% to 94.25%, an estimated $1 million

Extra $5.5 million going to school district

The school district will receive $135.5 million, a $5.5 million increase over the initial budget. That City Council-led increase was the biggest change to the budget over what was initially proposed by Mayor Brett Smiley, Council Chief of Staff June Rose said during a June 13 budget committee meeting.

Taxes, schools and police:Here's what's in Smiley's Providence budget proposal for 2025

Residential property tax rates are changing

Providence's residential property tax rate is changing to an owner-occupied ($10.46 per $1,000) and non-owner-occupied ($18.35 per $1,000) model. This change in rates also means the homestead exemption is going away, in favor of the lower owner-occupied tax rate. The $460,000 figure below is the new, and record high, median price for a single-family home in May.

Commercial property owners will see no relief from one of the highest tax rates in the state at $35.10 per $1,000.

Under the old model, owner-occupied houses received a 43% discount on taxes, set at that same rate of $18.35 per $1,000. That 43% discount pencils out to the same discount as the new tax rate: $10.46 per $1,000.

That also means that the city's most expensive homes, like the Moses Brown Ives house that sold for $4.3 million, get taxed at that much lower rate if they are owner-occupied.

By the numbers:

• A $460,000 single-family owner-occupied house or an owner-occupied multi-family house will cost $4,812 a year in property taxes under the new rate.
• A $460,000 non-owner-occupied house will cost $8,441 a year in property taxes.
• A $460,000 commercial property will cost $16,146 a year in property taxes.

The city is bringing in $53 million from payment-in-lieu-of-taxes agreements, known as PILOTs, with the city's nonprofit universities. That extra revenue is the stated reason property taxes aren't going up.

Police academy pushed back five weeks

Police officers collected over $10 million in overtime in 2023, which Police Chief Col. Oscar Perez blamed on a lack of personnel, as officers are being forced to work overtime because there aren't enough officers to meet the regular staffing requirements. At the same time, officers keep retiring.

One way the city has proposed to cut back this use of overtime, which is an even bigger issue in the Fire Department, is to put more recruits through the police and fire academies.

However, the start of the police academy has been pushed back five weeks to May 2025, so the cost of the 16-week academy is evenly split between the 2024 and 2025 fiscal years.

For the Fire Department, there is an $8.2-million increase in funding, to nearly $100 million. That would help fund:

• The current fire academy
• The recruitment of another 40 firefighters for an academy to follow. Those hires would be ready to serve in Fiscal Year 2026.

In 2023, firefighters and police officers made $22 million of the total $24 million the city spent on overtime. The top 200 overtime earners (all firefighters and police officers) raked in 46% of the total $24 million the city paid in overtime. Read more insights into the city's top salaries here.

Speed camera money goes back to general fund

All but 35% of the profit from the city's school zone speed cameras and red light cameras will mostly go into the general fund. That's a change from last year when City Council President Rachel Miller, following testimony by PVD Streets Coalition's Liza Burkin, amended the budget to steer 75% of the revenue into the city's fund that deals with pedestrian safety.

There was a big caveat on last year's plans: it would only happen if funds generated by PILOT agreements exceed $7.1 million.

This year, the amount of money generated from those speed cameras, going toward the traffic calming fund, is back down to 35%. The move comes after a string of pedestrian deaths in the city, with four deaths on North Main Street alone over the course of the last two years, although most of North Main Street is controlled by the state Department of Transportation.

The revolving fund is for citywide traffic calming and "school safety initiatives," including new speed bumps, speed-limit signs, signals and striping for crosswalks and to reduce speeds. The cameras are only allowed in school zones, and when schools are operating.

As WPRI-TV reported, the police recently used money from the school-zone speed cameras and red light cameras to buy an armored police vehicle, a "BearCat G3," built on an F-550 chassis, for $350,000.

Burkin said in an interview that the redirection of funds back to the general fund reduces the legitimacy of the camera program, since it seems more like a way to plug holes in the budget and less of a way to prevent people from getting hit by cars.

One of the streets with a speed camera is Cranston Street, near Urban Greens. The width of the road encourages drivers to go fast, even if they don't mean to, Burkin said. The city should be using the speed camera revenue to change the street to make it safer, so they can remove the camera, and not "buy tanks," Burkin said.

"It's firmly an engineering problem," she said.

Among the open positions that were eliminated to save money was a $53,000-a-year community liaison for the Department of Public Works, which is responsible for implementing road changes to make streets safer.

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Former reporter Amy Russo contributed to this report. Reach reporter Wheeler Cowperthwaite at wcowperthwaite@providencejournal.com or follow him on Twitter @WheelerReporter