PROVIDENCE, RI – The state has taken another step to help the financially stressed city of East Providence.
One month after appointing a fiscal overseer to help East Providence, state Revenue Department director Rosemary Booth Gallogly has--on the overseer's advice--abolished the position and replaced it with a five member budget commission. This is the second of three steps outlined in a law passed earlier this year to help fiscally challenged municipalities.
East Providence is trying to close a $7 million deficit accumulated by the school department. Last week, Moody's Investment Services downgraded the city's bond rating three notches to junk bond status. As a result the city will have trouble securing the short term financing it has relied on to pay its bills.
Fiscal overseer Stephen Bannon has concluded the city is unable to present a balanced budget, faces a fiscal crisis that poses an imminent danger to public safety and cannot achieve fiscal stability without the help of a budget commission.
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