Providence to pay $15M to resolve school funding dispute with state

Providence Mayor Brett Smiley speaks to reporters at City Hall on Oct. 10, 2024, the day after the school department demanded a emergency funding just shy of $11 million to rectify its deficit. (Alexander Castro/Rhode Island Current)

The city of Providence will pay an additional $15 million to its public schools, staving off a budget crisis that threatened to disrupt student amenities like sports and bus passes in the coming months, under the terms of an agreement reached this week with the Rhode Island Department of Education (RIDE).

The settlement details announced just after noon Friday earmarks an additional $4 million for fiscal year 2024, and adds $11 million in city funding for this fiscal year, which ends June 30, 2025. That makes the city’s total contribution to its schools $146.5 million in fiscal 2025.

 RIDE Commissioner Angélica Infante-Green praised the settlement as a step toward fulfilling the city’s legal and moral obligations to fund its schools, which have been under state control since 2019. “We are all committed to building a world-class school system that meets the needs of Providence students, families, and educators,” she said in a statement Friday afternoon.

In October, Providence Mayor Brett Smiley initially bucked when the Providence Public School Department (PPSD) pleaded for an additional $11 million to cover budget shortfalls. Smiley and the City Council offered $2.5 million to ease the pain, but the courts ultimately sided with the state. Rhode Island Superior Court Associate Justice Jeffrey A. Lanphear ruled on Nov. 8 that the state-controlled Providence Public School Department (PPSD) is eligible for millions more in local funding. 

But city and state officials did not come to an agreement until the eleventh hour. During a 10 a.m. hearing on Wednesday set to determine what Providence owed, city and state representatives entered and exited the courtroom repeatedly over two-plus hours. When Lanphear took the bench, he announced a settlement had been struck.

The $11 million payment for the current fiscal year will prevent cuts to winter and spring sports, as well as student bus passes, according to the school department. 

Providence has also pledged $147 million in school funding for fiscal years 2026 and 2027.n the latter year, the city is liable to pay adjustments tied to growth of education aid statewide. 

The settlement aligns the city more closely with the mandates of the Crowley Act, the state law that dictates the terms of state takeovers of school districts and the obligations of municipalities to fund their public schools. 

Smiley said in a joint statement with RIDE Friday that he was “relieved” an agreement had been reached after a long stretch of litigation, and that “predictable funding for our schools in the years ahead” was now ensured.

But in an interview with WPRI on Friday, Smiley said, “This was a bruising process, a bruising negotiation.”

The mayor has promised no midyear tax increases for Providence, but an increase for the next fiscal year remains on the table. An increase in excess of the state-mandated 4% cap would be subject to approval by the General Assembly.

The city is also rolling out a series of cost-saving measures, including a hiring freeze and the suspension of discretionary spending. Still, Smiley assured residents that services like libraries and recreation would go unaffected. 

“I think by many people’s definition, a good compromise is when both parties are a little unhappy,” Smiley told WPRI. “And I can tell you that both parties are a little unhappy.”

This is a developing story and will be updated. 

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