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A dispute between the Rhode Island Philharmonic Orchestra and Music School and the commission overseeing East Providence’s finances has inspired the submission of legislation that would permanently protect arts and cultural nonprofits’ tax-exempt status, something many of them are worried is in danger as cash-strapped municipalities look to levy property taxes on the organizations.
R.I. Rep. Frank Ferri, D-Warwick, R.I. Sen. Maryellen Goodwin, D-Providence, and others have filed bills to clarify that qualifying 501(c)(3) nonprofit performing and visual arts institutions and museums are exempt from local property tax assessments, regardless of how their property is used.
“We know the arts are an economic driver in Rhode Island,” Ferri said. “We want to emphasize it’s one of our assets.”
The bills were drafted after budget commissions overseeing municipal finances in Woonsocket and East Providence sought to collect taxes on organizations such as the Philharmonic, which is locked in a legal battle with East Providence over a tax bill of just under $160,000 for its 40,000-square-foot headquarters and school building on Waterman Street.
The Philharmonic has challenged the tax assessment; that dispute is heading to Superior Court.
Executive Director David Beauchesne said losing tax-exempt status would threaten the organization’s ability to survive.
“Our business model is based on raising funds, largely through contributions, to provide a public service,” he said. “Every single lesson we give is subsidized, most people who buy a ticket to a concert, that ticket price has been subsidized. It’s not as though we can cut back on programs and reallocate those funds to pay a tax bill. We just don’t have anywhere to pull those funds from.”