Providence Budget Battle: Controversial Tax Structure Proposal Passes Senate Committee

Providence Budget Battle: Controversial Tax Structure Proposal Passes Senate Committee

The City of Providence could be one step closer to a new two-tiered tax structure -- one that would most impact the affluent East Side of Providence.

The Senate Committee on Housing and Municipal Government on Thursday approved enabling legislation to allow the Providence City Council to move forward with the council leadership’s proposed new tax structure, which has drawn strong opposition from members of the East Side — and real estate community. 

Senate Bill 985, sponsored by Frank Ciccone, enables the City of Providence to adopt a homestead exemption in which an owner-occupied home-value of $350,000 would receive a homestead exemption of 40% of value, while anything above would receive a homestead exemption of 28% of value. 

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

“This is just enabling them to go back and fight it out,” said Ciccone of the measure, which was amended on Thursday to mirror language introduced on the House side. “Irrespective of what they’re saying [here tonight], they’re bordering on the brink of bankruptcy.”

"Contentious Dispute" Clears Hurdle

While Council Finance Chair John Igliozzi called the Senate committee passage a “victory” for Providence, Ward 1 Councilman Seth Yurdin, who opposes the proposed changes, started his testimony by apologizing to the Senate Committee for “dragging them into the contentious dispute.”

“It's a great victory for all the people of Providence and even more so the folks that have the biggest economic struggle in the city,” said Igliozzi following the vote, noting that he has a super-majority in support of the changes in the council. 

Igliozzi announced Thursday night that the council will work to re-open the appeal process for the city’s recent revaluation, for those homeowners that want to contest their appraised home value by the city. 

“All taxpayers will have the opportunity to file an appeal and state their case and have the due process,” said Igliozzi, after the window to appeal had previously been closed.  “My belief is when the City Council has the authority to pass city law, we can do so. The next step is we'll request the Administration re-open the appeal process. Hopefully they'll cooperate and if not we'll pass a city law to do it .”

Thursday’s committee hearing saw members of the City Council testify first before the body, as a full City Council meeting has been previously scheduled for Thursday evening. 

Freshman Senator Sam Bell said that he had gotten a number of emails from people who he believed were misinformed. 

“I’ve gotten a lot of emails about this bill [from the East Side] that their taxes would be going up, and when I would looked up the property, most of the properties would be seeing a reduction under this proposal,” said Bell. 

“Someone gave some wrong information, and it was like a game of telephone,” said City Council President Sabina Matos, of information that was leaked last Monday — and refuted by Igliozzi before the Council leadership held a press conference lastThursday on their proposal. “People were sending emails with the wrong information.”

Igliozzi in his testimony called out the opposition from realtors. 

“I know the [realtors] are concerned. Other cities and towns have a homestead [exemption] and they seem to do just fine,” said Igliozzi. “Part of the sell is telling people what taxes you’re going to pay. I always go pay what’s their mission statement and what’s mine,  which is to represent and advocate for people who don’t have a voice. We have special interest business groups and I understand [theirs is] how much money am I going to make on this sale.”

The realtors, however, shot back. 

“The council leadership’s inability to answer questions about their math from their own supporters on the committee is the clearest sign yet that this proposal has not been vetted and requires outside, professional analysis,” said Mike Raia, a spokesperson for Residential Properties Ltd.

Opponent Yurdin, who on Wednesday accused the supporters of the proposed tax changes of political pandering ahead of the next mayoral election, said he would support 

“I’m not saying there aren’t ways to solve these problems — tonight’s the first time I heard they’ll reopen the appeal process,” said Yurdin. “In the end the proposal you’re voting on very specifically sets up these rates — this legislation states these are the levels, and these might not be the right ones to have a positive effect.”

“One proposal I hope we’d consider is looking at a small modification to an existing statue - which allows for a freezing of a property tax cap for people of an income threshold,” said Yurdin. “If Providence had that kind of authority it could help those impacted in much more meaningful way.”