Rhode Island takes over another city’s finances

Rhode Island Gov. Lincoln Chafee has appointed a three-member panel to take over the finances of the struggling town of Woonsocket, where the schools face a $10 million deficit and the city is running out of cash. It is the third time the state has assumed control of a financially strapped city, according to The Associated Press (AP).

The state takeover in Woonsocket was expected. The City Council voted 5-2 to ask that a commission be appointed after the state legislature tabled a vote to approve a 13 percent supplemental property tax, a key part of the city’s recovery plan.

Woonsocket officials failed to put together a balanced budget, the governor’s office said. Municipal and school officials in the city have been at odds for years. “State intervention is never the preferred course,” Chafee said in a statement, “but hopefully this commission will help the city correct some of its major structural problems and craft a solution that ensures a stable future for the community and its taxpayers.”

Woonsocket, a city of about 43,000 people, is the third municipality in Rhode Island where the state has assumed financial control. The state took over Central Falls in 2010, and a receiver filed for bankruptcy last year. Chafee appointed a budget commission for the city of East Providence last year. Rhode Island has the second highest unemployment rate in the country.

Several cities in Michigan also have been taken over by the state, after the legislature passed a law in 2011 that broadened the state’s authority to intercede in financially distressed local governments. Flint, Benton Harbor, Pontiac, Ecorse, and school districts in Detroit and Highland Park have emergency managers. Detroit avoided a state takeover in April after agreeing to the appointment of a financial advisory board.