Clock Ticks for Providence

Providence Mayor Angel Taveras warned that the Rhode Island capital will run out of money in June without a reduction in pension obligations and larger contributions from tax-exempt institutions such as Brown University.

Taveras’ warnings, made during a press conference on Thursday, came three days after the Rhode Island Superior Court issued a preliminary injunction halting Providence from switching police and fire retirees to Medicare after they turn 65.

Taveras said Providence wanted to switch employees to Medicare from Blue Cross and Blue Shield of Rhode Island in order to curb costs. Providence is one of the few localities in the state that does not move coverage to Medicare at age 65.

According to Taveras, Providence’s large hospitals, colleges and universities own nearly $3 billion in property across the city which, if taxable, would bring in nearly $105 million of revenue for the city.

Providence has a $110 million budget deficit for fiscal 2012. In addition, according to a review panel, the city’s combined unfunded pension liability and other post-employment benefits stand at $2.3 billion.

Moody’s Investors Service, Fitch Ratings and Standard & Poor’s lowered Providence’s general obligation ratings in March.

The agencies assign ratings of A3, A and BBB-plus, respectively. All three credits carry negative outlooks.

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