Another drop in the bucket: RI’s treatment of Providence Water disenfranchises one of its poorest communities

Photo: Wikimedia Commons.

The current state of Providence Water is another example of Rhode Island’s long history of disenfranchising its poor in favor of its wealthy. 

To be fair, it isn’t just Rhode Island. It’s pretty much an American tradition to exploit the populace when it serves the powerful and neglect them when it doesn’t. Texas does its best to silence Austin’s progressives just as Oregon wages war with Portland, but the difference here is that Rhode Islanders claim to be egalitarian Democrats. 

Continuing in this tradition is the context and current predicament of Providence Water. Between 1915 and 1929, Providence – a city at the time dominated in population by the immigrant poor, but in power by factory owners – spent almost $21 million creating the water supply, or over $500 million in today’s dollars. Even during its construction, benefits were reaped by the elite: according to Blood and Watershed, a recent documentary produced by Johnson & Wales professor Evan Villari, many of these dollars went to the chairman of the Providence Water Supply Board, who sold his own land to the board and made a fortune. In order to create the Scituate Reservoir from which Providence Water draws its resources, the state condemned 18,000 acres of land, including towns and villages, who were forced from their homes. 

According to Samuel Zurier in “Finding the Right Level: Viewing the Providence Water Supply from Historical and National Perspectives,” in the years that followed its construction Providence Water made further investments in its plant, recently valued at $390 million. During this time, the General Assembly extended the right to purchase water from Providence Water to other cities and towns who had not invested in the infrastructure. Suddenly, the water supply that Providence tax dollars had built began to feel like a statewide resource. 

In 1980, the State Supreme Court ruled that the Public Utilities Commission, the statewide board that regulates utilities, did not have the authority to regulate Providence Water rates. Three weeks later, the General Assembly passed legislation that disempowered the Providence utility and usurped its ability to independently set its costs. 

Since then, Providence Water has evolved from a municipal utility that supported its neighboring communities to a state-regulated utility that burdens Providence at the benefit of its wealthier neighbors. The PUC ended the practice of using water system revenues to go to the city’s general fund. It removed Providence Water’s ability to give Providence residents a hometown discount on rates, and prevented it from paying property tax to Providence, despite the fact that the practice is observed in every other city and town where Providence Water holds property. This leaves Providence ratepayers unfairly burdened by supporting property taxes in other towns, but not in theirs, resulting in higher water rates. Today, Providence Water – infrastructure funded by city revenues, not state revenues – supports 66% of the state population’s water needs, without benefiting the builders of this infrastructure whatsoever.

At best, this is entirely unfair. At worst, it’s discriminatory, forcing one of the poorest and most diverse communities in the state to build and bear the costs and liabilities of a water system that they cannot see comparable benefit from. 

The prevailing belief from towns around the perimeter of Rhode Island is that Providence gets the lion’s share of attention and resources from state lawmakers. To be clear, though, Providence is one of Rhode Island’s poorest municipalities, with a median household income of $49,050 – more than $20,000 less than the state median household income – while housing over 17% of the state population. And, in a state where property taxes are the main source of income for municipalities, Providence has to contend with 40% of its property being off its tax rolls due to its large nonprofit sector. Contributing to that 40%, of course, is land occupied by its water utility, which other municipalities can tax but Providence cannot. 

There are only two reasonable outcomes here. One, Providence gets the ability to regulate its water utility, like most cities do across the country. It sets its rates and can use profits just like any other city department can, and other municipalities will play by its rules or develop their own water systems. 

The second alternative is that the General Assembly purchases Providence Water to own and regulate as a state entity. Providence will reasonably recoup the cost of its investment – close to $890,000,000 over the past 100 years – and can put that money directly towards its pension liability. 

The most likely outcome, however, is that none of these will come to pass, the General Assembly will continue to reallocate the fruits of Providence’s investment, and the State of Rhode Island will continue its pattern of disenfranchising and undermining its urban communities.