Wednesday, April 16, 2025
Proposed FY26 budget includes responsible cuts, new revenue and lower than expected tax increase to fund critical city services and community priorities
Mayor Brett P. Smiley today delivered his budget address for fiscal year 2026 to the Providence City Council, local leaders and community members. The proposed budget underscores Mayor Smiley’s steadfast commitment to strengthening city services and ensuring long-term growth and financial stability for Providence, despite a financially constrained year.
“In a moment of increased uncertainty and anxiety from actions we are seeing at the national level, this proposed budget underscores my administration’s continued commitment to responsible financial management that supports the evolving needs of our neighbors,” said Mayor Brett Smiley. “Despite a financially constrained year, I am proposing a balanced budget that avoids the drastic cuts we feared were necessary and is not solely reliant on raising taxes but instead focuses on raising revenue and making thoughtful cuts to the City’s budget. By developing a proposed budget that is as streamlined and cost-effective as possible, we were able to lessen the burden on our taxpayers and continue to fund the city services our neighbors rely on, because we know that in this moment local government is more important than ever before.”
As a result of last year’s settlement with the Rhode Island Department of Education that required Providence to fund over a decade of underfunding to the Providence School District in one fiscal year, Providence faced significant funding challenges that put the financial support for critical city services at risk. To ensure this financial burden would not fall solely on taxpayers, Mayor Smiley developed a three-pronged solution that reduced essential spending in nearly every department, prioritized the identification of new revenue sources and proposes a modest increase to residential property tax bills.
Following a thorough review and evaluation of the City’s finances and staffing, the Smiley Administration reduced funding for services and supply expenses in nearly every City department and removed 23 staffing positions. The reduction in services and supplies saved the City $4.2M and the removal of those positions saved Providence $1M. These savings when combined with the $3.2M reduction in overtime in public safety as a result of increased staffing, the City reduced the FY26 budget by over $9M. These savings, in combination with aggressive pursuit of new revenue sources outside of property taxes which is projected to total over $5.4M, allowed the Smiley Administration to propose a lower property tax increase than originally believed necessary. Residents that own and occupy a single-family home will see their tax bills increase on average by just 4%, that is an average monthly increase of about $13.
To support neighbors struggling with increasing rent costs, this budget dramatically lowered the tax rate for many apartments and multifamily buildings across the city. To further support the City’s most impacted residents, in this budget proposal Mayor Smiley doubled the tax exemption for veterans and increased the elderly exemption by 25. To provide relief for Providence’s local businesses and restaurants this budget proposes the lowest commercial tax rate since 2009. And, despite the financial shortcomings the City faced this year, this proposed budget reduces the tax rate across all types of property taxes.
“I am proud that we found a solution that lowers this tax increase to the lowest responsible rate while continuing to fund our most vital city services,” said Mayor Brett Smiley. “While we had to make difficult sacrifices to get to this point, including reducing our spending and our workforce, the City is learning to do more with less and today I have never been more hopeful or inspired for Providence’s future. In addition to saving our taxpayer’s money through necessary cuts, we have a lot to be proud of from this past year.”
Utilizing feedback from community members and local businesses, the Smiley Administration made targeted investments in 2024 to directly improve the quality-of-life in every neighborhood in Providence. Last year alone, Providence filled over 4,000 potholes, repaired over 10 miles of sidewalks and paved roads in every neighborhood of the city. And in an effort to make City Hall a hub for reliable, high-quality city services, Mayor Smiley invested in initiatives that streamline how residents access services, modernizing outdated systems. From the launch of a new PVD311 system to the digitization of permits and licenses, the Smiley Administration is making it easier to access city services in every department.
This budget proposal includes three new budget neutral initiatives to further improve services and expand support for both residents and local businesses. For local businesses, the City is proposing the creation of a multi-department one-stop business center that positions all of the supports and services a small business needs in one central location. For residents the City has proposed the creation of a singular, city services hub for the most requested city services. And to further support housing development, the Smiley Administration has proposed the establishment of a singular location for all permitting and infrastructure requests.
In response to the rising threat of climate change and the increase of flooding in recent years, Mayor Smiley has continued to support proactive investments in infrastructure that makes Providence less vulnerable to extreme weather. From the investment in a dedicated sewer team to dredge canals and clear storm drains to prevent flooding, to strategic improvements in the city’s stormwater management system, the Smiley Administration has made climate resiliency a core component of Providence’s infrastructure plans.
“While the federal government is rolling back environmental protections and making drastic cuts to critical programs aimed to address the impacts of climate change, here in Providence we are making investments to protect our communities from natural disasters,” said Mayor Smiley. “Through strategic investments in infrastructure and proactive strategies to reduce carbon emissions and improve recycling rates we are making thoughtful decisions to build a more sustainable Providence for generations to come.”
The Smiley Administration implemented a multifaceted approach to address the most pressing issue facing community members today, the housing crisis. From the adoption of new zoning changes to allow for greater housing density to streamlining the review and approval process to dramatically expedite housing development, Mayor Smiley is tackling this crisis head on by making it easier and faster to build affordable homes in Providence. Through landmark investments in housing, including a commitment of over $55M towards affordable housing, the City’s efforts have already expanded emergency shelter beds for unhoused neighbors and created or preserved over 1,600 affordable housing units throughout Providence.
“Our neighbors need both immediate and long-term support. Tackling this crisis requires innovative solutions and getting creative with the spaces that already exist,” said Mayor Brett Smiley. “That is why we are helping to transform historic buildings into housing and supporting the conversion of vacant, commercial spaces into affordable housing units.”
Each year, the City’s community satisfaction survey data confirms that elevating public safety remains a top concern for Providence’s residents and local businesses. In response, the Smiley Administration has already graduated two police academies and is currently recruiting for a third. Following these investments, the Providence Police removed over 300 illegal guns from Providence neighborhoods and the city saw a 10 percent reduction in violent crime last year, reaching the lowest levels of violent crime in Providence since 1990.
Recognizing that not every that not every situation requires a response from an armed officer, Mayor Smiley also made public safety investments to modernize the Fire Department and support innovative programs that protect community members like the Family Service Go-Team, the EMS paired response unit and the EMS bicycle program. Utilizing grant funding from the Substance Abuse and Mental Health Services Administration, Providence’s EMS teams received the tools needed to further combat the opioid epidemic and more effectively prevent overdoses across Providence.
To ensure Providence students have the opportunity to learn in state-of-the-art facilities, the Smiley Administration invested in three new schools: Mary Fogarty, Frank Spaziano and Harry Kizarian. These facilities will support improved educational outcomes, particularly for middle school students by supporting the Pre-K-8 model. And following two years of collecting feedback from Providence students, educators, families and community members Mayor Smiley released his transition plan last week to return the Providence School District to local management.
And this year, for the first time in the city’s history, Providence now has signed payment in lieu of taxes (PILOT) agreement with every major tax-exempt institution in the city. Following the historic agreement with Providence’s colleges and universities in 2023 that more than doubled the financial contributions from the previous agreement, in 2024 Mayor Smiley signed a PILOT Agreement with Brown University Health, bolstering Providence’s financial status.
“Despite the difficult cuts we had to make, my budget tonight continues to fund the resources our community relies on. Today, Providence is safer and better positioned for growth than it has been for decades,” said Mayor Brett Smiley. “While many of us are feeling exhausted and let down by the federal government, through this budget proposal we are making thoughtful, responsible and compassionate decisions that prove that here in Providence, local government can still be a force for positive, meaningful change.”
Mayor Smiley’s full proposed FY26 budget will be posted online at openbudget.providenceri.gov and is subject to approval by the Providence City Council.