House Finance Committee hears bill to rewrite Crowley Act funding rules after Providence takeover

House Finance Committee members on Wednesday heard hours of testimony on House Bill 5389, a measure introduced at the request of the city of Providence that would change how the state applies the Crowley Act in school takeovers, define a municipality’s funding obligation during intervention, and curtail the commissioner of elementary and secondary education’s power to withhold other state aid as an enforcement tool.

Supporters said the measure is meant to prevent future fiscal crises in cities subjected to state intervention and to provide predictable local obligations. Representative Slater, sponsor of the bill, told the committee the measure would “define what the host community's contribution is” and fix that contribution at 20% of levy growth rather than tying the local obligation to the statewide percentage increase in education aid. He said the bill also provides for appointment of a fiscal overseer to review spending during a takeover.

The case for the change was framed repeatedly around Providence’s recent takeover and ensuing settlement. Mayor Smiley told the panel the city supports the bill as a lesson learned from five years of litigation and a painful settlement: the measure, he said, would give municipalities “a predictable and a pace of increase of funding that is something the community can absorb” and would remove what he described as the “sledgehammer” effect of an unelected official withholding broad streams of state aid.

Opponents — including the Department of Education’s chief legal counsel and senior department staff — urged caution. Anthony Catone, chief legal counsel at the Department of Education, said the commissioner’s authority under Rhode Island General Laws §16-5-30 to seek withholding is one of the few statutory tools to ensure compliance with school funding statutes and called the bill’s proposed maintenance-of-effort language ambiguous without further definition. Deputy Commissioner Drew Eccleston warned removing the withholding power could limit the state’s ability to compel corrective action where municipalities historically underfund schools and said Massachusetts has a similar withholding authority used as a leverage tool in turnarounds.

Community witnesses also opposed the change. Dozens of students, parents and community organizers testified that the proposal would reduce accountability for adequate and equitable school funding when a district is under state control. Dr. Shonda Womack, speaking for several grassroots organizations, said changing the statute would move funding away from “adequacy and equity” toward a formula tied to tax increases and would weaken protections for students in taken-over districts.

Supporters and opponents disagreed on how often and for what scope the Crowley Act has been used. Witnesses noted the statute historically targeted single-school interventions and that a full-district takeover is rare; proponents argued the Providence case exposed practical limits of the current statutory text and its fiscal consequences for municipalities.

Committee action: At the start of the hearing the committee moved and seconded a procedural motion to hold all bills on the agenda, including HB 5389, for further study. That motion was adopted by voice vote. No final vote on HB 5389 was taken at the hearing.

Why it matters: The bill would change the division of fiscal responsibility between municipalities and the state during interventions and limit one of the education commissioner’s enforcement powers. Supporters say it would avoid municipal fiscal crises that follow takeovers; opponents say it could reduce accountability and make it harder for the state to ensure adequate funding for students.

Next steps: HB 5389 was placed on further study; sponsors and department staff indicated willingness to negotiate statutory language and technical clarifications with the committee.