Providence, R.I. Mayor and Nov. 2 Congressional candidate David Cicilline apparently had a very tough time this summer deciding where he stands on the municipality’s property tax rate.
Cicilline – mayor of the largest city in the country’s smallest state – first said Providence may have to raise taxes to continue to provide adequate services in the face of state budget cuts and effects of the recession. But when the City Council voted to raise property taxes a week later, Cicilline vowed to veto the vote.
Then, two days later, he backed down, saying he couldn’t stop the measure because doing so would force the city – home to about 18% of the state's residents – to miss a July 31 deadline to set its annual tax levy, the Providence Journal reported. Missing that deadline would have prohibited the city from sending out tax bills or collecting tax revenues, “putting critical city services in jeopardy,” he said in a statement.
Cicilline, who submitted his proposed budget in early May, blamed the council for what he implied was a last-minute vote designed to preclude him from opposing the increase.
So, home owners will see their residential tax rate increase by 3% more than the mayor’s proposed budget, from $24.21 per $1,000 of assessed value to $30.38.
But wait, residential property owners will actually pay less …
However, 70% of the city’s homeowners will actually pay less tax, the council retorted.
That’s because new property revaluations delivered to property owners a few days after the council’s initial vote were about 30% lower, WPRI-TV, the state’s FOX affiliate, reported. Council members contended that even with the increased residential property tax rate, those decreased assessments mean homeowners will actually pay less in taxes, the Providence Journal reported, (just not as much less as they would have without the rate increase). The average homeowner should save about $300 to $400 this year, council members have calculated.
… unless they are non-resident owners of small, multiunit rental buildings
The tax rate hike, approved in late July by an 8-to-7 council vote, also repeals a tax break for non-resident owners of multiunit buildings. Owners of buildings with less than five rental units who do not live in the property previously were allowed to exempt 33% of the assessed value of the property from their taxes, ABC area affiliate WLNE-TV reported.
That repeal has been criticized by city landlords and realtor groups, who say the loss of the tax break will result in increased rents and be a disincentive for investment in some of the city's poorest neighborhoods, the Providence Journal reported. The Greater Providence Board of Realtors is weighing a lawsuit challenging the repeal.
Tax bills should be mailed by mid-August.