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Sides Battle Over Special Tax Break Extensions for Providence Properties

Wednesday, December 02, 2015

Kate Nagle, GoLocal News Editor

Four existing Providence developments seeking tax break extensions were met with both support — and strong opposition -- on Tuesday night at a City Council Finance Committee hearing.

Monohassett Mill, Pearl Street, Rising Sun Mills, and 100 Fountain Street went before the committee seeking five year extensions on their tax stabilization agreements (TSA) with the city, garnering testimony from tenants and unit owners who said the sudden tax hike after the current TSAs ended would be insurmountable — as did residents of the city who questioned the rest of the taxpayers continuing to offset the cost of the tax breaks.

“There are very few places that the tax structure that has been afforded to these buildings had been afforded,” said Brian Bishop on behalf of the Providence Apartment Association at the hearing. “A ‘ramp [up]’ would be nice for all of us, for everyone whose [property] values go up in the next valuation.”

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Council President Luis Aponte, who is not on the finance committee, said he saw the extensions as potentially necessary moving forward.

“These are some of the early TSAs that were done under a different time when we knew less,” said Aponte. “They're different projects, several of them are condos, so the extension would be for five years to full tax."

“Back then, there were ‘cliffs,’ continued Aponte, noting that the TSA structure required the developments to go suddenly from partially subsidized to fully-taxed. “There's pretty significant sticker shock to get them up full tax.”

Tax Breaks Under Inspection

The look at the extension for the four developments comes after the city and state agreed to a TSA structure for the 195 land back in July. In March, the City Council had announced it was considering a major overhaul of tax breaks.

Providence Mayor Jorge Elorza’s Chief Operating Officer Brett Smiley provide testimony on Tuesday at the hearing that the Administration was in support of the extensions.

“On behalf of the administration, the Mayor supports all four of them. We’re pleased to work with the council so that this ‘cliff’ won’t be created again in the future. It creates an unfair burden on homeowners,” said Smiley. “We do think it’s the most responsible action possible. We think all four are good agreements.”

Lawyer Nick Hemond, who represented Monohassett Mills, Pearl Street LLC, and Rising Sun Mills on Tuesday evening, called the situation of the TSA expiration for thos properties a “mini foreclosure crisis.”

Speaking first for Monohassett Mills, Hemond said, “The five year extension is the same form the Westminster properties receive last summer. These people would lose their homes due to jump in taxes. It’s a mini mortgage foreclosure crisis. [The extension] gives them time. This is a phase in. This old [TSA] model was effective in getting the development it wasn’t effective for sustainability.”

Opponents, however, questioned the application — and extension — of tax breaks in light of the city’s current economic climate.

“The TSA regime that we have is amounting to a theft from a public treasury — it is unevenly applied to developers that seem [blame] poor planning,” said Mike Araujo with Jobs for Justice, who spoke to the types of construction jobs he’s seen on TSA sites. “TSAs take money out of school districts. Does the municipality even require adherence? No. It’s opaque and arbitrarily applied.”

Long time Providence TSA critic John Jacobson was unable to make Tuesday’s hearing, but did submit testimony regarding the extension proposals.

"There is absolutely no reason to grant these TSA extensions from the 2001 era of TSAs that can be rationally justified," said Jacobson. "It is in effect a massive subsidy to profit businesses that have long since finished their development. They also received a five year extension back in 2010 at the Statehouse and should have used the last five years preparing [for] this moment."

"Virtually any property owner in Providence could say that the economic crash of 2008 negatively effected them and that a tax abatement and freeze could help them financially avoid hardship and foreclosure," quipped Jacobson.

City Council President Aponte said however that the proposals were fiscally neutral.

"We're not losing any tax revenue -- just creating a softer landing to get up to full taxation," said Aponte.

Related Slideshow: The Highest Taxed Communities for 2015

How do the taxes in your community compare to other cities and towns in Rhode Island?

GoLocalProv has ranked communities from the least to the highest taxed on the basis of their tax rates, using newly released data from the state Division of Municipal Finance. The below slides list the tax rate per $1,000 in value for homes, commercial property, personal property, and motor vehicles for the 2015 fiscal year, which began last July and ends next June.

Along with the rates are examples of what taxes might cost a typical resident in each city or town. For residential taxes, this calculation is based on the current statewide median price for a single family home, which is $215,000. For communities with them, homestead exemptions are factored in using the latest available figures. For motor vehicles, the example used is a 2008 Honda Accord, valued at the maximum retail price of $15,150. The total cost of home and car taxes is then represented as a percentage of the median income for that community, offering a rough measure of how affordable taxes are for those residents as compared with the taxes in another city or town.

Data sources: the Rhode Island Division of Municipal Finance, the Rhode Island Association of Realtors, the Rhode Island League of Cities and Towns, the National Automobile Dealers Association, and the U.S. Census Bureau.

#39 New Shoreham

FY 2015 Tax Rates Per $1,000 in Value

Residential: $5.34

Commercial: $5.34

Personal Property: $5.34

Motor Vehicle: $9.75

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $1,148.10

For a 2008 Honda Accord: $147.71

Total Taxes as a % of Median Income:1.43%

Note: Real property is assessed at 80 percent of value. This is reflected in the community's ranking.

#38 Little Compton

FY 2015 Tax Rates Per $1,000 in Value

Residential: $5.64

Commercial: $5.64

Personal Property: $11.28

Motor Vehicle: $13.90

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $1,212.60

For a 2008 Honda Accord: $210.59

Total Taxes as a % of Median Income: 1.56%

#37 Jamestown

FY 2015 Tax Rates Per $1,000 in Value

Residential: $8.75

Commercial: $8.75

Personal Property: $8.75

Motor Vehicle: $14.42

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $1,881.25

For a 2008 Honda Accord: $218.46

Total Taxes as a % of Median Income: 2.46%

#36 Charlestown

FY 2015 Tax Rates Per $1,000 in Value

Residential: $9.90

Commercial: $9.90

Personal Property: $9.90

Motor Vehicle: $13.08

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $2,128.50

For a 2008 Honda Accord: $198.16

Total Taxes as a % of Median Income: 3.20%

#35 Bristol

FY 2015 Tax Rates Per $1,000 in Value

Residential: $13.06

Commercial: $13.06

Personal Property: $13.06

Motor Vehicle: $17.35

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $2,807.90

For a 2008 Honda Accord: $262.85

Total Taxes as a % of Median Income: 5.04%

Note: Bristol had a revaluation or statistical update effective December 31, 2013

#34 Narragansett

FY 2015 Tax Rates Per $1,000 in Value

Residential: $10.04

Commercial: $15.06

Personal Property: $15.06

Motor Vehicle: $16.46

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $2,158.60

For a 2008 Honda Accord: $249.37

Total Taxes as a % of Median Income: 3.58%

#33 Westerly

FY 2015 Tax Rates Per $1,000 in Value

Residential: $10.64

Commercial: $10.64

Personal Property: $10.64

Motor Vehicle: $29.67

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $2,287.60

For a 2008 Honda Accord: $449.50

Total Taxes as a % of Median Income: 4.64%

#32 Portsmouth

FY 2015 Tax Rates Per $1,000 in Value

Residential: $15.80

Commercial: $15.80

Personal Property: $15.80

Motor Vehicle: $22.50

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $3,397.00

For a 2008 Honda Accord: $340.88

Total Taxes as a % of Median Income: 5.10%

Note: Motor vehicles are assessed at 70 percent of value. This is reflected in the community's ranking.

#31 South Kingstown

FY 2015 Tax Rates Per $1,000 in Value

Residential: $15.48

Commercial: $15.48

Personal Property: $15.48

Motor Vehicle: $18.71

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $3,328.20

For a 2008 Honda Accord: $283.46

Total Taxes as a % of Median Income: 4.91%

#30 Newport

FY 2015 Tax Rates Per $1,000 in Value

Residential: $12.06

Commercial:$16.72

Personal Property: $16.72

Motor Vehicle: $23.45

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $2,592.90

For a 2008 Honda Accord: $355.27

Total Taxes as a % of Median Income: 5.11%

#29 Middletown

FY 2015 Tax Rates Per $1,000 in Value

Residential:$16.07

Commercial: $21.34

Personal Property: $16.07

Motor Vehicle: $16.05

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $3,455.05

For a 2008 Honda Accord: $243.16

Total Taxes as a % of Median Income: 5.23%

#28 Exeter

FY 2015 Tax Rates Per $1,000 in Value

Residential: $14.63

Commercial: $14.63

Personal Property: $14.63

Motor Vehicle: $32.59

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $3,145.45

For a 2008 Honda Accord: $493.74

Total Taxes as a % of Median Income: 3.82%

#27 Tiverton

FY 2015 Tax Rates Per $1,000 in Value

Residential: $19.30

Commercial: $19.30

Personal Property: $19.30

Motor Vehicle: $19.14

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,149.50

For a 2008 Honda Accord: $289.97

Total Taxes as a % of Median Income: 6.46%

#26 North Kingstown

FY 2015 Tax Rates Per $1,000 in Value

Residential: $18.91

Commercial: $18.91

Personal Property: $18.91

Motor Vehicle: $22.04

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,065.65

For a 2008 Honda Accord: $333.91

Total Taxes as a % of Median Income: 5.49%

#25 Richmond

FY 2015 Tax Rates Per $1,000 in Value

Residential: $20.94

Commercial: $20.94

Personal Property: $20.94

Motor Vehicle: $22.64

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,502.10

For a 2008 Honda Accord: $343.00

Total Taxes as a % of Median Income: 5.88%

Notes:

1. Motor vehicles are assessed at 80 percent of value. This is reflected in the community's ranking

2. Richmond had a revaluation or statistical update effective Dec. 31, 2013

#24 Hopkinton

FY 2015 Tax Rates Per $1,000 in Value

Residential: $20.64

Commercial: $20.64

Personal Property: $20.64

Motor Vehicle: $21.18

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,437.60

For a 2008 Honda Accord: $320.88

Total Taxes as a % of Median Income: 7.13%

Note: Hopkinton had a revaluation or statistical update effective Dec. 31, 2013

#23 Cumberland

FY 2015 Tax Rates Per $1,000 in Value

Residential: $17.08

Commercial: $17.08

Personal Property: $29.53

Motor Vehicle: $19.87

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $3,672.20

For a 2008 Honda Accord: $301.03

Total Taxes as a % of Median Income: 5.42%

Note: Cumberland had a revaluation or statistical update effective Dec. 31, 2013

#22 Coventry

FY 2015 Tax Rates Per $1,000 in Value

Residential: $20.40

Commercial: $24.58

Personal Property: $20.40

Motor Vehicle: $18.75

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,386.00

For a 2008 Honda Accord: $284.06

Total Taxes as a % of Median Income: 7.12%

Note: Coventry had a revaluation or statistical update effective Dec. 31, 2013

#21 Warren

FY 2015 Tax Rates Per $1,000 in Value

Residential: $20.07

Commercial: $20.07

Personal Property: $20.07

Motor Vehicle:$26.00

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,315.05

For a 2008 Honda accord: $393.90

Total Taxes as a % of Median Income: 8.62%

#20 East Greenwich

FY 2015 Tax Rates Per $1,000 in Value

Residential: $23.26

Commercial: $23.26

Personal Property: $23.26

Motor Vehicle: $22.88

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $5,000.90

For a 2008 Honda accord: $346.63

Total Taxes as a % of Median Income: 5.48%

#19 Burrillville

FY 2015 Tax Rates Per $1,000 in Value

Residential: $18.88

Commercial: $18.88

Personal Property: $18.88

Motor Vehicle: $40.00

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,059.20

For a 2008 Honda Accord: $606.00

Total Taxes as a % of Median Income: 7.01%

#18 Barrington

FY 2015 Tax Rates Per $1,000 in Value

Residential: $18.30

Commercial: $18.30

Personal Property: $18.30

Motor Vehicle: $42.00

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $3,934.50

For a 2008 Honda Accord: $636.30

Total Taxes as a % of Median Income: 4.43%

#17 West Greenwich

FY 2015 Tax Rates Per $1,000 in Value

Residential: $22.55

Commercial: $22.55

Personal Property:$33.85

Motor Vehicle: $19.02

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,848.25

For a 2008 Honda Accord: $288.15

Total Taxes as a % of Median Income: 6.36%

Notes:

1. Does not include rate for vacant land which is $16.07

2. West Greenwich has a homestead exemption

3. West Greenwich had a revaluation or statistical update effective Dec. 31, 2013

#16 Foster

FY 2015 Tax Rates Per $1,000 in Value

Residential: $21.06

Commercial: $21.06

Personal Property: $28.96

Motor Vehicle: $36.95

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,527.90

For a 2008 Honda Accord: $559.79

Total Taxes as a % of Median Income: 6.26%

#15 Scituate

FY 2015 Tax Rates Per $1,000 in Value

Residential: $18.98

Commercial: $21.94

Personal Property: $40.38

Motor Vehicle: $30.20

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,080.70

For a 2008 Honda Accord: $457.53

Total Taxes as a % of Median Income: 5.52%

Note: Motor vehicles are assessed at 95 percent of value. This is reflected in the community's ranking.

#14 North Smithfield

FY 2015 Tax Rates Per $1,000 in Value

Residential: $16.02

Commercial: $17.77

Personal Property: $42.80

Motor Vehicle: $37.62

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $3,444.30

For a 2008 Honda Accord: $569.94

Total Taxes as a % of Median Income: 5.21%

#13 Glocester

FY 2015 Tax Rates Per $1,000 in Value

Residential: $21.77

Commercial: $24.74

Personal Property: $43.34

Motor Vehicle: $24.37

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,680.55

For a 2008 Honda Accord: $369.21

Total Taxes as a % of Median Income: 6.31%

Note: Glocester had a revaluation or statistical update effective Dec. 31, 2013

#12 Lincoln

FY 2015 Tax Rates Per $1,000 in Value

Residential: $23.57

Commercial: $26.94

Personal Property: $37.02

Motor Vehicle: $30.66

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $5,067.55

For a 2008 Honda Accord: $464.50

Total Taxes as a % of Median Income: 7.33%

Note: Lincoln Has a homestead exemption.

#11 Warwick

FY 2015 Tax Rates Per $1,000 in Value

Residential: $20.06

Commercial: $30.09

Personal Property: $40.12

Motor Vehicle: $34.60

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,312.90

For a 2008 Honda Accord: $524.19

Total Taxes as a % of Median Income: 7.93%

#10 West Warwick

FY 2015 Tax Rates Per $1,000 in Value

Residential:

For apartments with 6+ units: $36.28
For Two to Five Family buildings: $36.45
For Single family homes: $25.3

Commercial: $30.85

Personal Property: $40.13

Motor Vehicle: $28.47

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $5,458.85

For a 2008 Honda Accord: $431.32

Total Taxes as a % of Median Income: 11.46%

Note: For rankng purposes, an average of the three residential rates was used.

#9 Smithfield

FY 2015 Tax Rates Per $1,000 in Value

Residential: $17.13

Commercial: $17.13

Personal Property: $59.70

Motor Vehicle: $39.00

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $3,682.95

For a 2008 Honda Accord: $590.85

Total Taxes as a % of Median Income: 5.89%

#8 Cranston

FY 2015 Tax Rates Per $1,000 in Value

Residential: $22.84

Commercial: $34.26

Personal Property: $34.26

Motor Vehicle: $42.44

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,910.60

For a 2008 Honda Accord: $642.97

Total Taxes as a % of Median Income: 9.45%

#7 East Providence

FY 2015 Tax Rates Per $1,000 in Value

Residential: $22.95

Commercial: $25.40

Personal Property: $56.67

Motor Vehicle: $37.10

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,934.25

For a 2008 Honda Accord: $562.07

Total Taxes as a % of Median Income:11.09%

Notes:

1. Rates are for FY 2014

2. East Providence has homestead exemptions

#6 Johnston

FY 2015 Tax Rates Per $1,000 in Value

Residential: $28.75

Commercial: $28.75

Personal Property: $59.22

Motor Vehicle: $41.46

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $6,181.25

For a 2008 Honda Accord: $628.12

Total Taxes as a % of Median Income: 11.99%

Note: Johnston has homestead exemptions

#5 Pawtucket

FY 2015 Tax Rates Per $1,000 in Value

Residential: $23.06

Commercial: $30.88

Personal Property: $52.09

Motor Vehicle: $53.30

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,957.90

For a 2008 Honda Accord: $807.50

Total Taxes as a % of Median Income: 14.28%

#4 Woonsocket

FY 2015 Tax Rates Per $1,000 in Value

Residential: $35.94

Commercial: $39.99

Personal Property: $46.58

Motor Vehicle: $46.58

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $7,727.10

For a 2008 Honda Accord: $705.69

Total Taxes as a % of Median Income: 21.99%

Note: Woonsocket has homestead exemptions

#3 North Providence

FY 2015 Tax Rates Per $1,000 in Value

Residential: $27.94

Commercial: $34.68

Personal Property: $69.91

Motor Vehicle: $41.95

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $6,007.10

For a 2008 Honda Accord: $635.54

Total Taxes as a % of Median Income: 13.04%

Notes:

1. North Providence has homestead exemptions

2. North Providence had a revaluation or statistical update effective Dec. 31, 2013

#2 Providence

FY 2015 Tax Rates Per $1,000 in Value

Residential:

For owner-occupied residential property: $19.25
For non-owner-occupied residential property: $33.75

Commercial: $36.75

Personal Property: $55.80

Motor Vehicle: $60.00

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $4,138.75

For a 2008 Honda Accord: $909.00

Total Taxes as a % of Median Income: 13.20%

Note: For ranking purposes, the average of two residential rates was used

#1 Central Falls

FY 2015 Tax Rates Per $1,000 in Value

Residential: $27.26

Commercial: $39.48

Personal Property: $73.11

Motor Vehicle: $48.65

Tax Cost for Residents

Taxes for a Single Family Home Valued at $215,000: $5,860.90

For a 2008 Honda Accord: $737.05

Total Taxes as a % of Median Income: 22.54%

Note: Central Falls has homestead exemptions

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