Providence City Council gives first pass vote to reallocate ARPA money to fund schools

The city of Providence is making progress in its plan to shuffle COVID relief money to partially absorb a $15 million obligation to the state-controlled Providence Public School Department (PPSD).

The City Council at a brief special meeting Monday voted to tentatively affirm a series of changes reallocating approximately $4.4 million in federal American Rescue Plan Act (ARPA) funds, including unspent funds first intended for the city’s reparations program. Three ordinances were unanimously approved last Tuesday by the council’s finance committee. 

The council needs to vote one more time for the revisions to take effect. A second vote is expected to take place at its next regular meeting Thursday, Dec. 5. If passed, the redirected money will cover almost a third of the total settlement reached last month with the Rhode Island Department of Education (RIDE), which requires Providence to pay $4 million for the school system’s fiscal 2024 deficit and $11 million for the fiscal 2025 deficit. 

“I know that all of us feel strongly about supporting our schools, and also have talked a lot about underinvesting, and I think this is the right thing for us to do,” said Councilor Helen Anthony, who chairs the Committee on Finance, when introducing a motion Monday calling for the budget transfers. “These funds have to be covered by the end of December, this month…So we cannot hesitate. We need to take the action.” 

The five-minute meeting featured no discussion aside from Anthony’s introductory comments. Councilors Shelley Peterson, Justin Roias, Jo-Ann Ryan, James Taylor and Ana Vargas were all absent.

The 10 councilors who voted unanimously mostly approved reallocating surplus funds left over from projects or programs that were completed under budget. Most substantial is $3 million to be diverted from several projects within the COVID-19 Equities Program, originally earmarked at $10 million and passed in 2022 under previous Mayor Jorge Elorza. The funds were meant to address racial inequities and were essentially a form of reparations — albeit without any mechanism for direct payments to residents, which led to not entirely positive attention in national headlines. 

Providence and state education department handshake on public school funding dispute

Anthony Vega, a spokesperson for Providence Mayor Brett Smiley, said in an email Monday that proposed cuts to the equities program were one of the “difficult decisions” made by the Mayor’s office to address the budget pressure resulting from the November settlement. 

“While this was not the original plan for the remaining COVID-19 Equities Program funding, the City has already committed $7 million to initiatives in that program and the remaining funds will be redirected to the city’s general fund to allow for additional school funding, aligning with one of the original priorities of this funding,” Vega wrote. “This change will hopefully allow the District to improve results for our students and support a school system that fully meets the diverse needs of our community.”

Savings outside the reparations program were generally more modest, like $3,527 left over from a $1 million allocation for summer jobs for Providence youth. The biggest share was $1 million budgeted to redevelop the Cranston Street Armory, a project announced in September 2023; the entirety of those funds will now be steered toward the school settlement.

The finance committee unanimously approved the new set of ARPA recommendations on Nov. 26. The following day, Council President Rachel Miller scheduled Monday’s special meeting, so that councilors would have enough time to pass the amendments twice and ensure “that no federal dollars go to waste,” wrote Roxie Richner, press secretary for the City Council, in an email Monday. 

The new ARPA recommendations also include catch-all provisions that allow the City Council to repurpose any funds not contractually obligated as of Dec. 15, 2024, or still unspent by March 31, 2026. Originally, these funds would have been directed to the Providence Redevelopment Agency’s Housing Trust Fund. Under the revised ordinances, they could be redirected to other sources — including the schools, as Mayor Smiley said Nov. 22 that revenue recovery would be a major source of paying off the new obligation.  

The city settled with RIDE on Nov. 20 after Rhode Island Superior Court Associate Justice Jeffrey A. Lanphear ruled Nov. 8 that the city statutorily owes more to its public schools per the Crowley Act, the state law that authorized the 2019 state takeover of Providence schools. The act also prescribes municipal funding amounts for state-controlled districts. 

Lanphear did not specify the amount owed and scheduled a follow-up hearing to determine the precise calculations. Instead, city and state attorneys negotiated at the courthouse instead, resulting in the settlement. A judgment by Lanphear could have cost much more — up to $55 million, according to city estimates.