Raimondo campaign: State aid shows problems with Fung's Cranston leadership
PROVIDENCE, R.I. — Gov. Gina Raimondo’s reelection campaign drew attention Wednesday to the $1.34 million in state aid that the city of Cranston is getting from a “Distressed Communities Relief Fund” as evidence the city is not as well-run as her potential GOP opponent, Mayor Allan Fung, makes it out to be.
“He likes to talk about what is going well in Cranston, but the reality is that many of the positive things happening in Cranston are due to Governor Raimondo, not Mayor Fung,” said deputy campaign manager David Ortiz, in a midday press release.
“Mayor Fung raised property and car taxes nine times on Cranston residents. Governor Raimondo worked with the legislature to cut car taxes,” Ortiz said.
But this was the very different picture that Fung campaign spokesman Andrew Augustus painted: “The Mayor has taken Cranston from a city that was a total financial mess to one that consistently runs surpluses.
“While the Governor proposes adding taxes to medical marijuana users, cloud-based services that are important to entrepreneurs, and a statewide property tax, Mayor Fung has been able to roll up his sleeves and prevent unnecessary tax hikes,” he said.
Augustus also invoked a short-lived 2015 Raimondo proposal to levy a new statewide property tax on non-owner-occupied homes assessed at $1 million or more — including Taylor Swift’s $17.75-million mansion in the Watch Hill section of Westerly.
Raimondo’s claims focused on a decades-old program that provides “state assistance to those Rhode Island cities and towns that have the highest property tax burdens relative to the wealth of taxpayers.”
Other cities qualifying for distressed cities aid this year include Central Falls, Johnston, North Providence, Pawtucket, Providence, West Warwick and Woonsocket.
A state-aid report published in January by the Raimondo administration’s Division of Municipal Finance singled out Cranston, noting that the city had again qualified for aid. Neither the Raimondo administration or her campaign team could provide specific data that might explain why the city had qualified.
Cranston first qualified for the program in the 2013 fiscal year, then continued receiving aid the following two years. It fell out of the program in the 2016 fiscal year, returned in 2017, and appeared to fall out of the program in the current fiscal year before requalifying for the year that begins July 1, according to a House fiscal office summary.
While the Raimondo team cited Cranston’s eligibility as a sign of Fung’s “failed leadership,” Fung administration director Robin Muksian said with the way the formula works, “you can be the victim of your own success.”
Muksian said the city does not actually know what triggered its change in status, because the state makes that determination on its own.
But “if property values go up because of any number of things in our city … let’s say, economic development. Property values go up. Your city is thriving. It’s great, but the household per capita income stays the same, yes, this could actually throw” the city’s ranking in the distressed-cities formula.
The second part of Raimondo’s attack on Fung’s “leadership” involved tax increases on his watch. Not surprisingly, the Fung administration recounts the history differently.
The city tax rate rose by 8.79 percent, to $19.11 per $1,000 of assessed property value, in fiscal year 2010, the first full year Fung was in office. A summary provided by Fung’s staff attributed that to the “effects of Great Recession, inherited $1.5 [million] structural deficit, $10 million cuts in state aid, failing pension plan and other financial issues.”
The following year, fiscal year 2011, the tax rate rose by 5.18 percent, to $20.10. It rose by 1.04 percent, to $20.31, in 2012; and by 1.53 percent, to $22.84, in 2013. That’s where it stayed until fiscal year 2016, when the tax rate dropped to $22.45. It rose by 2.18 percent, to $22.94 percent, for the current fiscal year.
As the Fung team tells this story: the average increase over this 10-year span is 1.68 percent, but the summary suggests that an eight-year look at the “mayor’s standalone budgets [without] covering for past fiscal nightmares” provides a better reflection of his management. That average: 0.28 percent.
The Raimondo campaign team, by contrast, reached back to 2003 — to Fung’s vote as a councilman for a supplemental property tax increase — in counting “nine times Mayor Fung raised taxes in his fifteen years as City Councilman and as Mayor.”