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Providence Rhode Island on the Brink of Bankruptcy

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    Providence, Rhode Island Mayor Angel Taveras on narrowing the city's budget gap.

  • Duration 5:23
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-- -- not just Greece asking citizens to sacrifice.

-- island's capital city Providence.

Is quote on the brink of bankruptcy facing a 22 and a half million dollar budget shortfall by June problems is democratic mayor Angel to there.

Says drastic measures are needed and he joins us in this box.

Business exclusive mayor thank you so much for joining -- aren't you -- taken certain measures you cut your own salary by 10% -- Kutcher -- this budget by 13% among other cuts.

What else needs to be done where do we stand -- was still that 22 and a half million dollar figure for the budget shortfall how much more do you need to cut.

Well thank you for having you know we faced a 110 million dollar structural deficit at the beginning of this fiscal year we've been able to trim that down to where we are now.

And one of the challenges we have right now as we -- we want to be part of that and we're reaching out to our great tax exempt institutions that we have tenacity that provide so much to.

Some -- throughout cultural and educational health care.

Needs we're reaching out to them because we need them to be part of the solution.

We're also reaching out to our retirees because we have pensions that I simply unsustainable.

And we need to trust them now we're also appealing -- Supreme Court to the root out Supreme Court a decision.

That did not allow us to shift some retirees over to.

Over to Medicare once they reach the age of 65 so we're doing that as well.

If we get people to come together and I believe that we -- We can go ahead and and weather this storm but it -- -- that.

Challenge right getting people to come together -- -- just looking at that video out of Greece.

Protesters.

Necessary austerity there.

What's the situation Providence and what are you doing to get people to understand that Providence very likely could go bankrupt.

Well I think there're couple things I think first -- trying to make sure that people know that we're all in this together that's why -- thought -- -- my own -- cutting my own pay.

-- reducing the mayor's office budget because I thought it was employment send the signal that I'm not immune to this where we're all in this together we -- need to cooperate together.

And I think the other thing on time -- be very straightforward with the people open the books make sure people understand.

This is where we are if you have some ideas -- happy to listen we're happy to think about those ideas but this is where we and thus far I think that has helped us.

Narrow the gap -- significantly now we've got a little bit further to go but.

Working together I believe we can get there.

-- -- -- -- I mean it seems like when we look at the list of things that you're doing that you're getting close to sort of scraping the bottom of the barrel on you know and show you another -- You've increased -- parking fees increased parking enforcement which means airports handing out more ticket increase dumpster he's not for his disposal -- -- At it it seems like you're really scraping the bottom of the barrel to get there how are you going to close the budget gap -- mean do you have any big -- Well let me just say that I mean we've done a lot of cutting we've also increased -- -- that and that's -- -- not a very popular thing to do but it's necessary.

And the way that we get there is by doing what we're doing right now which you know it's all about tax exempt institutions and helping them.

Asking them to help us solve this problem is that already university help -- mr.

-- that.

That includes not only ground but also all about the colleges we have three other colleges and we have and are you so far -- response from -- -- universities.

-- -- -- -- Where difference I -- minimal -- different places.

Where different places and I think now it's trying to find common ground in terms of what is fair.

But people have.

Have expressed their willingness to help so how ethical question of finding common ground and the other issue is going to be controlling on health care and -- pension costs.

Without doing that will be back in the spot in the future so it's something that we've got to look at this.

In terms of -- and -- just for the short term before your term as well.

And if you don't make it -- -- city does go bankrupt tell us step by step what does that mean expecting some people say you know when they look at having their salary cut by 10% or having their pension benefits cut.

What happens if you go bankrupt is an even worse than that.

Well I mean what we're do what -- do everything we -- to avoid that because we have one city in Rhode Island that actually.

Is in bankruptcy court now we've seen there that they've been no drastic cuts.

Across the board we've seen that pensions -- slashed by more than half.

In terms of pension.

Pensions that that that retirees who -- receiving health care cost changed as well you.

Now I don't know danger in the -- in do you say that when you sit down at the table with people you're trying to say you need to make a cut your pension otherwise you could see what happened in the city we could your pension benefits be cut in half do you say that at the table.

00 absolutely I think we have to be straightforward and honest and I think that.

With respect to our neighbor to the not central falls.

We have an example what can happen if you do not address these issues now so we'll be meeting with -- shortly.

And that will be part of -- presentation.

We're going to be straightforward and honest with them and let them know what they're facing.

You -- mr.

mayor contacted by ratings agencies recently what's that discussion.

Resulted in.

Well there will be coming in in visiting with us I expect that they'll wanna know more the details we'll share with them.

All of the information.

Very straightforward and honest with them as well and they'll make a decision -- to.

What they wanted you with our rating but obviously they're paying attention and we let them know.

We gave -- an update before we went and made the statement last week because we thought I was informed that they know exactly what's going on.

We're here to solve this problem when do everything you can't do that.

All right -- Angel to various thanks for your time sharing a -- story with us and of course good -- thank you so much.

-- --

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