PROVIDENCE – The average residential tax bill is still going to rise, but potentially not by as much under further tax cuts set forth by a panel of city lawmakers.
The $568 million fiscal 2023 budget approved by the City Council Finance Committee on Wednesday amends the spending plan previously unveiled by Mayor Jorge O. Elorza. Among the key changes: further reducing the residential property tax rate, which under the council’s version would drop to $17.80 per $1,0000 of assessed value – a significant drop over the current rate of $24.56 and also less than the $18.50 in Elorza’s budget.
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The tax cuts seek to partially offset soaring property values from the recent statistical property revaluation while keeping the tax levy increase under the state cap of 4%. Even with proposed tax cuts, many property owners are still poised to see bigger tax bills, particularly multi-family homeowners and landlords who don’t live in their homes, according to city analysis shared with Providence Business News.
The city council’s budget plan shrinks the size of that increase, however, with the average residential property owner seeing a $114 jump in their annual tax bill, versus the $309 average increase under Elorza’s budget, according to city analysis.
“Our families are faced with rising inflation costs, from groceries to gas. And while we all appreciate increased home values, it was important for the council to crunch the numbers and lessen the tax burden on our single-family, multi-family, and elderly homeowners without sacrificing city services,” Councilwoman and Finance Chair Jo-Ann Ryan said in a statement.
To make up the lost revenue from a lower residential tax rate, the city finance committee’s budget ups the commercial tax rate from what Elorza proposed to $35.40 per $1,000 of assessed value, although it’s still lower than the current tax rate. On average, commercial property owners can expect to see their tax bills increase by 15%, according to the city auditor.
Other budget changes in the city council’s spending plan include
- Decreasing the business tangible tax rate to $53.40 per $1,000 of assessed value (versus the mayor’s proposal of $55.55);
- Increasing the elderly tax exemption from $511 to $600;
- Defunding the city fire chief position, which has long been unfilled, with the provision to add $175,000 if the job is filled;
- Adding $5 million for the redevelopment of the “Superman” building.
While Elorza also has supported the plan for the city to give $5 million to help redevelop the Industrial National Bank building, the contribution was absent from his original spending plan because the city intended to offer that funding later, after the long-vacant building is occupied. While occupancy may still be several years away, adding the money now is intended to symbolize the city’s commitment on the project, said James Lombardi, the city’s treasurer and city council chief of staff.
“At the end of day, we wanted to signal to the statehouse that we were willing to spend the $5 million if necessary,” Lombardi said.
Lombardi also said the other budget tweaks were the result of a collaborative effort between the city council and administration.
With the Finance Committee’s unanimous vote on Wednesday, the tax and spend plan now heads to the full council Thursday for approval.
Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.
