39 Cities and Towns: Who Rakes in the Most Tax Dollars?
Saturday, October 15, 2011
Rhode Island residents will pay more in taxes for fewer services in 2012, with cities and towns across the state expecting to collect more than $2.1 billion in property taxes during the fiscal year that began July 1.
In all, only seven communities (Exeter, Foster, Lincoln, Little Compton, North Smithfield, Pawtucket and West Warwick) will see their residential or commercial property taxes decrease or remain the same this year, while the rest will continue to pay more. While no cities and towns technically raised car taxes, all but eight communities have lowered their tax exemption since the General Assembly voted to allow municipalities to reduce the exemption in 2010.
In fact, only eight communities have maintained the $6,000 excise tax exemption, while 18 have lowered it to the $500 minimum. The remainder of the communities have lowered the exemption to a point in between, such as $3,000 or $1,500.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTHighest Taxed Communities
To no surprise, Providence sits atop the list for taxes it plans to collect in 2012, with the expectation set at over $100 million more than any other city and town. The capital city expects to collect $324,460,407 after being forced to become one of three communities to seek a waiver to exceed the 4.25 percent maximum tax cap levy for residential and commercial taxes. The city originally wanted to raise property taxes by more than 13 percent, but eventually settled on a significantly lower number while cutting the car tax exemption down to $1,000.
Warwick and Cranston are next on the list, with the two cities and towns expecting to collect nearly $400 million during the 2012 fiscal year. Cranston has twice been forced to apply for state waivers to exceed the maximum tax levy in recent years and both communities were forced to raise taxes this year.
Rounding out the five most-taxed communities for 2012 are Pawtucket and Johnston, which expect to collect $96,340,757 and $68,570,772 respectively.
No Emergency Funds
After Pawtucket, residents in the next dozen cities and towns will pay between $50 and $70 million in property taxes during the fiscal year. But Dr. Edward Mazze, Distinguished University Professor of Business Administration at the University of Rhode Island, said residents shouldn’t necessarily see an increase in city services thanks to increased revenue.
Mazze said the majority of property taxes tend to go toward benefits and paying down past debts, not the public works departments.
“Relying on property taxes, most municipalities have little or no discretionary funds for emergencies or special projects,” Mazze said. “Towns and cities do collect other taxes and fees which are a small and important part of the municipal budget. The largest percentage of property taxes and other sources of revenue go to personnel, fringe benefits, interest on past borrowings/bonds and retirement and health benefits for former municipal employees. Road repairs and maintenance of municipal facilities and assets are often postponed because of a lack of funds.”
Taxes May Continue to Rise
And the trend of higher taxes may continue, according to Mazze, who said cities and towns have been forced to settle for decreases in help from the state in recent years.
In former Governor Don Carcieri’s second term alone, nearly $195 million in aid was cut from communities across the state. In 2012, communities will receive $663,002,519 in municipal and education from the state, according to the most recent figures.
“In the last three years, the municipalities have had to survive with less state support as costs of doing government business and maintaining their school systems has increased,” Mazze said. “A number of Rhode Island municipalities may have to consider filing for Chapter 9 bankruptcy as has Central Falls if sources of revenue from local taxpayers and the state do not increase. Municipalities will not be able to provide the services taxpayers expect because of budget constraints and may be the last of the entities exiting the 2007 recession.”
Tea Party Leader: No Bang For The Buck
The increases should leave tax payers fed up, according to Lisa Blais, who heads up the Ocean State Tea Party in Action. Blais questioned what tax payers will see for their increased payments during the year.
How, she asked, “do the taxpayers get their bang for their buck with escalating property taxes as city and town services are cut and funding for schools that prioritize adults' needs before the students all while we hemorrhage money we don't have to meet unaffordable pension payments? The short answer is, we don't and we're broke.”
Blais believes a bloated government is to blame for tax hikes.
“The burden of increased taxes and fees slash net income of average Rhode Islanders. Too many are fighting just to meet their basic needs and pay their bills,” she said. “But property tax bills keep on increasing based on reduced values while car taxes increase based on exaggerated values. Too much money is demanded of citizens to support bloated government.”
Will Elections Change Anything?
The question now is whether the 2012 election will force politicians to avoid raising taxes next year. As voters head to the polls during a Presidential election year, Quest Research pollster Victor Profughi said their anger is unlikely to disappear.
“I definitely think that voter anger will continue unabated, but it is hard to say what the impact will be on local and legislative races in each community,” he said. “Voter anger statewide may be driven as much by the Presidential election as by anything else, but could be successfully tapped by well known and/or well funded selective local or legislative candidates.”
Profughi said it will be interesting to see which candidates try to tap into that anger and of course, whether they can actually follow through on their promises.
“Given the current political climate in the state, and nationwide, voter anger is likely to grow,” he said. “The issue will be can it be channeled in a given direction for select candidates and will it shift many normal voting preferences.”
If you valued this article, please LIKE GoLocalProv.com on Facebook by clicking HERE.