PROVIDENCE, RI – East Providence has become the second Rhode Island city to have its finances taken over by the state. The city is staggering under budget deficits, unfunded pension liabilities and a Wall Street credit rating downgrade.
State Police Major Stephen Bannon has been temporarily re-assigned to be fiscal overseer of the city of East Providence. He will have exclusive authority to approve or reject all expenditures over $25,000. He has 120 days to come up with a plan to restore the city to fiscal soundness. Governor Lincoln Chafee announced his appointment at East Providence City Hall.
"I want to look out for the property taxpayer," he says. "And I want to make sure we're being pro-active with our cities and towns across the state to keep them healthy."
East Providence entered the current fiscal year on November 1st with a $3 million shortfall. In addition it has more than $7 million in debts accrued over the last four years. Most of it is owed to Bradley Hospital, which has threatened to withhold special education services if it isn't paid.
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