What to know about Mayor Smiley's city budget proposal and likely tax increases

Mayor Brett Smiley has made a formal proposal to increase taxes by 7. 5% in Providence as part of the city's budget for Fiscal Year 2026. This move addresses financial challenges stemming from a $15 million settlement to improve funding for the Providence Public School District. Smiley insists that the tax increase is essential to tackle a generation of underfunding while ensuring that the financial burden does not fall solely on taxpayers. The total proposed budget is approximately $624 million, a notable rise from the nearly $600 million budget for FY 2025.

Fixed costs, which comprise about 96% of city spending, cover salaries, pensions, and vital public services. The City Council has two months to assess the proposal, which is contingent on the General Assembly allowing Providence to exceed the 4% tax cap for one year. While some property types will see significant tax increases due to rising property values, critics argue that higher valuations do not necessarily equate to residents' ability to pay more taxes. This proposal underscores the ongoing financial struggles faced by local governments, particularly in balancing education funding and essential services.