Providence Tax Increase a Crushing Blow to City Homeowners
Thursday, July 21, 2011
The tax hike that is coming with the new budget has sparked outrage and disappointment among city homeowners who tell GoLocalProv that it is one more financial hit they cannot afford.
The budget aims to close a projected $110 million shortfall by boosting the residential tax rate from $30.38 to $31.89 per $1,000 in home value, a jump of nearly 5 percent. It’s less than the original increase of 13 percent, but that came as small consolation to homeowners yesterday.
“With the taxes being raised in this area, it’s ridiculous. Look at the neighborhood,” said Shirley Piccoli, a resident of 24 Erastus Street in Olneyville. Across the street is a boarded up three-story home that has been foreclosed. Next door is a second foreclosed home and down the street are two vacant houses.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTPiccoli works as a full-time caretaker for her husband, Anthony, who is on Social Security Disability. Last year, Piccoli said the couple paid about $5,000 in taxes on her home, which is assessed at $153,600, according to city records. With a $1.51 tax increase, she will owe about $231 more in taxes.
She said it’s one more hit to the pocketbook after another. “You got the sewer. You got the water. What else are they going to raise?” she asked. “Are they going to make everyone homeless?”
Homeowner: ‘Why should I pay for their mistakes?’
Her anger was shared by her Olneyville neighbors.
“It’s horrible, because you’re not making more to pay taxes,” said Maria DePina, a 22 Levaughn Street homeowner who says she is not due for any raises anytime soon at her job as a CNA in a local nursing home. Like Piccoli, DePina and her husband will have to pay approximately $200 more in taxes under the new budget.
She told GoLocalProv it’s unfair for the city to make homeowners pay for the mistakes of officials who mismanaged city finances for so many years. “Why should I pay for their mistakes?” she said.
Her neighbor across the street agreed. “I think it’s being pushed off on the little people,” said Rita Holmes. “We can’t really afford to live here and now they’re pushing more on us that we can’t absorb.”
Their local councilman, Michael Correia, agrees. “Is it fair? It’s not fair on the homeowners,” he said.
But he said the city had no choice. Without the tax increase, he said the city would have had to reduce basic services—everything from the closure of parks and pools to trash collection and street sweeping. Months ago, Correia told GoLocalProv he would not vote for a tax increase, but he said he ultimately saw there was no alternative, after the city cut $6 million out of the police and fire budgets, closed schools, terminated teachers, and exhausted a number of other cost-saving measures.
“Even with deep budget cuts a tax increase was unfortunately necessary to close the city’s $110 million deficit,” said David Ortiz, spokesman for Mayor Angel Taveras. “Closing this gap has not been easy. Many in Providence are feeling the effects.”
Olneyville resident: Go after the wealthy
In all, a budget that could have been as high as $680 million this fiscal year was shrunk to about $614 million through months of belt-tightening. The agreement on a tax increase was one of the last steps of the process.
“It was a very hard decision for me. I did support it because everyone gave in their fair share of sacrifice,” Correia said.
But not everyone quite saw it that way. “This is ridiculous. Our city is going into debt. They shouldn’t be taking it out on the poor people,” Piccoli said. “Go after the wealthy.”
The sentiment was much the same across town, even in places like Fox Point. “It’s terribly upsetting,” said Patrice Roberts, who lives with her husband Newell and two children on Sheldon Street. “It’s not good. Here we are trying to cut out and downsize.”
She also thinks the city should shift the burden onto other payers. But instead of the wealthy, she wants the city to focus on Brown University and other tax-exempt colleges.
In fact, the budget that was approved this week counts on the city being able to secure an additional $7 million in voluntary contributions from tax-exempt institutions like Brown. “Mayor Taveras has called on the city’s colleges, universities, and hospitals to contribute and those negotiations are ongoing. No one is exempt from the sacrifices needed to pull Providence back from the brink of financial collapse,” Ortiz said.
‘I was middle class before…’
Higher property taxes will have a widespread and varied impact on homeowners.
For Piccoli and her husband, it means everything from fewer nights out to simple everyday cutbacks, like fewer trips in their car. “You can’t go out. You don’t have the money,” Piccoli said.
But she says the impact will be far more severe on some of her neighbors and friends. She said many have been forced into foreclosure or selling their homes at a loss. She the cost of paying taxes—even before the new tax increases—already was a major factor in driving people from their homes.
Roberts said her family has already had to downsize, in large part to cope with the tax burden. Four years ago, they lived in West Greenwich home and owned a second, four-unit house at 57 Sheldon Street that her husband inherited from his mother. The tax bill on the West Greenwich home came to about $6,000 to $7,000 while the couple owed $17,000 in Providence. With Roberts facing a 50 percent cut in her income next year as a teacher in a local charter school, she said the couple had to choose between the homes. (Her husband also works as a public school teacher in Providence.)
So they sold off their 2,800-square-foot West Greenwich home and, earlier this summer, moved into one of the 1,000-square-foot units on Sheldon Street, renting out the other three. “I thought I was middle class before,” Roberts said. “I think I’m well below that because I live from paycheck to paycheck.”
Now, for the first time, she says the family will have to forego its yearly summer vacation in New Hampshire. “The taxes are getting higher and higher and you can’t afford to live here,” she said. “Everyone here—I think they’re living just enough to get by.”
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THE IMPACT
Single Family Home—Citywide
VALUE $102,000
2011 Taxes: $3,098.76
2012 Taxes: $3,252.78
DIFFERENCE $154.02
VALUE $86,750
2011 Taxes: $2,633.94
2012 Taxes: $2,764.86
DIFFERENCE $130.92
Single Family Homes by Select Neighborhoods
Olneyville
VALUE $115,000
2011 Taxes: $3,493.70
2012 Taxes: $3,667.35
DIFFERENCE $173.65
VALUE $135,000
2011 Taxes: $4,101.30
2012 Taxes: $4,305.15
DIFFERENCE $203.85
College Hill
VALUE $369,500
2011 Taxes: $11,225.41
2012 Taxes: $11,783.35
DIFFERENCE $557.94
Sources: Latest available median prices from ProvPlan, Rhode Island Association of Realtors.
Note: The above uses figures from data on prices, which may not always be the same as the assessed value of a home. The above calculations also do not show what the impact of the homestead exemption.
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