An unusually lengthy saga to craft Providence’s 2026 fiscal plan concluded Tuesday morning with Mayor Brett Smiley signing what he called “the most difficult budget” since his tenure began in 2023.
“We passed a balanced budget, and we did so without making cuts to city services while still making real sacrifices, to demonstrate both our own belt tightening, and to make sure that the burden of this year’s budget was not put exclusively on our taxpayers,” Smiley told reporters at a Tuesday morning press event in his City Hall office immediately before he added his signature to the budget.
City councilors, city employees and a couple of state legislators joined Smiley on the morning after the Providence City Council approved the budget for the second time via a 12-2 vote at a special meeting. (The Providence City Council needs to vote on matters twice before they can be sent to the mayor for final approval.) There were two no votes on the budget’s second pass from Councilors Shelley Peterson and Oscar Vargas. Councilor Ana Vargas was absent.
Smiley’s initial draft of the 2026 spending plan arrived on April 16. The ensuing 12 weeks involved much back-and-forth as councilors and the mayor enlisted the help of the Rhode Island General Assembly to permit the city to increase its levy, or overall tax revenue, above the 4% state-mandated annual cap. Two of the lawmakers who co-sponsored the legislation to OK the tweaked levy cap — Sen. Sam Zurier and Rep. Scott Slater, both Providence Democrats — attended the press conference and stood quietly in the lineup alongside Smiley and City Council President Rachel Miller.
The final $624 million budget accommodates a 5.85% increase in the city’s levy, below the 8% allowed by the recent state legislation or the 7.5% Smiley proposed initially. While the budget technically lowers property tax rates, higher property values mean most people will still receive bigger tax bills.
The budget was revised in late June to even out tax bill increases among different types of homeowners. The finalized budget includes an average residential property tax increase of 6%, although non-owner-occupied homes with two to five units will still see the highest increase.
The budget for fiscal year 2026 arrives two weeks after the fiscal year began on July 1.
“Effective today, you can come in to the city tax collector to pay your bill if you’re anxious to do so,” Smiley said, and added that bills will also be available online this week. Paper bills via mail are being printed this week and should start to arrive in mailboxes sometime next week, Smiley added.
Because the budget arrived late, taxpayers will have a grace period until Aug. 20 to make their first quarterly payment. First-quarter tax bills are usually due in late July.
The 2026 budget also doubles the veteran’s exemption and increases the elderly exemption by 25%. Smiley said people who have had tax exemptions in the past don’t need to reapply. First-time applicants who are eligible can visit the tax assessor’s office at City Hall.
A ‘monumental’ budget process
“It bears repeating that this was an exceptionally tough year,” said City Council President Rachel Miller, noting spiking home values, rising rents and the cost of living for the city’s working class families as challenges to tackle in this year’s budget process.
“On top of it all, we were faced with the added difficulty of making up for decades of underfunding our schools in this one year,” Miller added. “So the task before us as we entered this process was monumental.”
That underfunding exerted the most weight upon the budget: A November 2024 settlement with the Rhode Island Department of Education (RIDE) requires the city to pay $15 million, plus make additional investments in subsequent fiscal years, to cover deficits in the city’s school department, which has been under state control since 2019.
For fiscal year 2026, the city needed to allot about $11 million toward the school settlement. To fill the sudden crater in the city budget, Smiley relied on the levy cap exemption and some deep slashes to individual municipal departments’ budgets. Smiley and city officials told reporters this was perhaps the first time so many departmental line items had been cut in one fell swoop.
Smiley said many city departments will have to “make do with less, and you’re going to have offices being expected to produce the same amount of work with fewer employees, and so we know that that’s a sacrifice.”
More than 20 positions — all of them vacant — were eliminated in this year’s budget, and Smiley said he does not expect the positions will return in the future. But the mayor emphasized the budget leaves core city services like trash, public safety and emergency services untouched.
“I think it is the right and compassionate thing to do to look for opportunities to cut where, one, it won’t affect any services, and two, someone doesn’t lose their job,” Smiley said. “These city employees are our neighbors, our friends, your kids’ Little League coach. We are not going out looking to try to cut jobs and lay people off.”
The hiring freeze initiated at the start of the budget process has ended, Smiley said, as open positions are ones included in the budget.
Meanwhile, Miller said one of the council’s priorities is finding new ways to think about revenue in Providence that don’t rely on property taxes. Both Miller and the mayor agreed that the city’s payment in lieu of taxes (PILOT) agreement with Brown University, which finalized in 2023, had been struck just in time.
“I’m certain that if we were in negotiations with the private colleges today, given the changes in the federal landscape and the new financial pressures that they’re under, that their offer would be far less than what we were able to sign two years ago,” Smiley said, but noted he was not as “satisfied with where we are with the hospitals.”
Both Care New England and Brown University Health, the state’s largest health systems, have PILOT agreements with the city.
Miller said she agreed with Smiley and characterized the PILOT agreements with local colleges as “the strongest Providence has seen.” But the city, she added, is limited in its powers over institutions like Brown, whose state charter predates that of the city itself.
“I think that we have opportunities to work with the General Assembly to think about what any nonprofit institution expanding means for our tax rolls, because Providence cannot afford to keep removing property from the tax roll,” Miller said.
The full budget is available on the city’s website, as well as a tax bill estimator tool.
This story was originally published by the Rhode Island Current.
