WARWICK, R.I. — Mayor Joseph J. Solomon announced his interest to “extend negotiation” with Warwick Schools on their budget deficit in a release Superintendent Philip Thornton called ‘deliberately misleading,’ while expressing eagerness to meet about the problem.
Solomon’s release, embedded in its entirety below, doesn’t specify which negotiation the City will extend. Recently, the City and Schools ended mediation to solve the $4 million FY19 deficit, spurred by the Schools’ Caruolo Act suit against the city, with an agreement to close the gap using pension funds, which a lawyer has since pointed out is illegal and threatens the tax exempt status of the fund, requiring retroactive tax payments assessed throughout its existence.
At Tuesday’s budget hearing, Aubrey L. Lombardo, partner with Henneous Carroll Lombardo LLC, the School Department’s attorney, said that although the pension fund plan settling the Caruolo Act lawsuit was binding, the Schools had asked the City to renew the mediation given the pension fund’s apparent illegality.
Thornton said that even if using pension funds to balance their budget were legal, it would not be fiscally sound, since that would set up a structural deficit solution, where one-time funding is used to address a budget hole, leaving the problem to recur the following year.
Neither School Committee Chairwoman Karen Bachus, nor Thornton, who each viewed a copy of the release, were certain the Carulolo Act mediation was the negotiation Solomon referred to. A request to Solomon’s office for clarification was not immediately returned.
Thornton said he is willing and eager to meet with Solomon to address Warwick Schools’ budget challenges, which include the FY19 deficit and, following Friday’s City Council approval of Solomon’s budget, a $7.7 million deficit for FY20, Thornton said Solomon’s announcement misconstrued three key elements of the Schools’ financial difficulties.
Specifically, Thornton pointed to the third paragraph of Solomon’s release, which reads, “School funding has been of primary concern. On Friday, the City Council approved the FY20 budget, which calls for an additional $508,000 allocation to schools and $1.7 million in school principal and interest payments that the City will absorb as well as $6 million for infrastructure improvements. The School Committee’s original request was for an additional $7.7 million.”
“It is inaccurate and intentionally misleading,” Thornton said about an hour after having read the release.
First, Thornton said, although Solomon’s budget does increase School funding by $508,000, that is only by virtue of an increase in state and other aid to the schools this year, not an increase in City funding to the schools. In fact, Thornton said, Warwick Schools’ appropriation from the City has hovered near $124 million for 10 years, only increasing $14,396 in that time.
The $6 million for infrastructure, he pointed out, is from bonds, which Warwick borrows and makes debt payments on, but which is not provided by the City’s annual appropriation to Schools.
Likewise, Thornton said, the $1.7 million in debt service the City is relieving the Schools of paying doesn’t practically affect their ability to pay for salaries, heat, books and electricity.
“That’s not an operational increase,” Thornton said.
[pdf-embedder url=”https://warwickpost.com/wp-content/uploads/2019/06/Solomon-Press-Release-School-Budget.pdf” title=”Solomon Press Release School Budget”]