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Governor Lincoln D. Chafee Holds Municipal Strategy Session Featuring Leaders from Rhode Island Cities and Towns

Providence, RI - Governor Lincoln D. Chafee today hosted a Municipal Strategy Session for Rhode Island's municipal leaders. Representatives of 25 of the state's 39 cities and towns attended the meeting, where discussion focused on the legislative package of municipal reform and relief measures Governor Chafee has introduced in the General Assembly. The Governor's legislative package will empower communities to take the necessary steps to achieve fiscal health and offer relief from costly and burdensome state mandates.

"I am always pleased to welcome Rhode Island's local leaders to the State House for a productive discussion on how best to put our communities on a path to fiscal health and prosperity. As we work to address the crisis in our cities and towns, the collaboration and partnership of municipal leaders is essential. The reform and relief package I have submitted to the legislature will empower communities to use the tools they need to achieve fiscal stability, and I am pleased to have the support of the overwhelming majority of municipal executives across the state," Governor Chafee said.

"Each city or town in Rhode Island is different, with unique needs and challenges. My legislation places the power to take steps to address these challenges where it belongs – at the local level. I look forward to continuing to work with municipal leaders to avoid more bankruptcies, keep property taxes down, and restore fiscal health for our cities and towns," Governor Chafee continued.

The Governor's municipal reform and relief legislative package includes seven bills:

* Allowing municipalities with poorly funded pension plans to suspend annual cost of living adjustments until the plans are better funded – just as the state did as part of its pension reform.

* Offering mandate relief and binding arbitration reform for four highly distressed communities – Providence, Pawtucket, Woonsocket, and West Warwick. These communities were hit hardest by the loss of state aid to municipalities in recent years. The state cut $220 million in municipal aid between FY 2008 and FY 2011, but did not repeal costly mandates, forcing cities and towns to raise property taxes and slash services. This legislation provides mandate relief to control costs and reduce the need for additional property tax increases. It also limits the scope of binding arbitration in highly distressed communities to only salary-related issues, and places primary emphasis on a community's ability to pay when deciding awards.

* Instituting new budget accountability measures for school spending, following numerous cases of significant deficits and fiscal mismanagement by school committees. The state will have greater oversight of school budgets and have an early warning system if schools are spending above their budgets.

* Requiring communities with overly generous pension benefits to bring pensions in line with the state system.

* Reducing disability pension benefits for employees that can perform other jobs.

* Advancing municipal aid to avoid cash flow problems.

* Providing certain exemptions for school maintenance of effort requirements.

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