Mayor still mulling tax on students

PROVIDENCE – Mayor David N. Cicilline said today he has not made a decision yet about whether to seek legislation that would allow Providence and other municipalities to levy an annual tax on every out-of-state student who attends a private college or university in Rhode Island.

In an interview with Providence Business News, Cicilline said he is still discussing the proposal with lawmakers, in addition to administrators and students at the city’s four private schools: Brown University, Johnson & Wales University, Providence College and the Rhode Island School of Design.

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“This is really about everyone working together, doing more than they’ve done in the past to support the health and prosperity of the city,” he said.

Complete details of what the mayor is calling a “student impact fee” have not been worked out yet, Cicilline said. The annual fee would likely be included as part of a student’s tuition bill, and its amount would be in line with activities fees and other assessments the universities place on students, which the mayor estimated to range between $150 and $260 a year.

Cicilline said he believes the student fee proposal would require approval from the General Assembly, but he has not introduced a bill as yet because a decision has not been made on whether to go forward with the idea. The legislation could allow cities and towns outside the capital to levy a fee on students who attend private schools there, as well. (A spokesman for House Finance Committee chairman Steven Costantino, D-Providence, did not return a phone call requesting comment.)

“This is all still very much trying to build some consensus,” he said, describing the reaction so far as “mixed.” The mayor also said he was not aware of any other city that has instituted a similar fee.

For years, city officials have looked for ways to get more revenue from the tax-exempt hospitals, colleges and universities located in Providence. The state provides the city with an annual payment in lieu of taxes (PILOT) for the institutions, but Cicilline said the provision has not been fully funded as state aid has declined.

In addition, a June 2003 deal between Cicilline and the four schools saw them agree to make nearly $50 million in voluntary payments to the city over a 20-year period.

But with Providence facing a $17 million deficit in the current fiscal year and a nearly $50 million hole in the budget for 2009-10, Cicilline is looking for other sources of revenue – and the mayor said he is determined to avoid property tax increases.

The mayor’s current budget proposal for 2009-10 calls for Providence’s residential and commercial property tax rates to stay at $23.70 and $28.00 per $1,000 in assessed value, respectively.

Cicilline said the student tax is just one of a number of ways his administration is looking to deal with the city’s financial problems, which he said have been caused by the stumbling economy and a lack of state support.

In the interview, he divided his budget approach into three pieces: reductions in the size of city government; concessions from the city’s unions; and revenue increases. “I’m exploring all three of those areas in an effort to develop some revenues for the city outside of the regular property taxes,” he said.

Cicilline, who is running for re-election next year, said he has reduced the number of city jobs by 450 and has kept the annual rate of growth in city government below inflation, as well as below the state and federal governments’ rates of growth.

Last month, the mayor announced a set of concessions made by the city’s largest union, Laborers International Union of North America Local 1033. He said today that discussions with the city’s other unions were ongoing. “We’re not there yet, but we’re making progress, and just, again, talking about everyone doing their part during these challenging themes, but also to avoid shifting any more burden to Providence taxpayers,” he said.

In terms of increasing revenue from the tax-exempt institutions, Cicilline said he is “in conversations with them about ways that the hospitals and universities can do more,” including the per-student fee. The Legislature considered a bill a few years ago that would have charged full-time college students $200 a year, but the measure did not pass.

Asked about the reaction from student leaders with whom he had spoken, Cicilline – himself a Brown graduate – said: “I don’t think [adults] give young people enough credit. I think this is a new generation of young people that understand, in this post-Obama world, that everyone is being asked to do things differently and think about the collective well-being of the community. And I think young people understand that.”

But the mayor acknowledged that the idea needed to be presented in a way that did not make Providence look inhospitable to students or institutions of higher education.

“We have worked very hard to demonstrate that we value enormously the contributions that colleges and universities make to the city and that college students make to the long-term vitality and economic health of Providence and Rhode Island,” he said. “It has to be done in a way that young people are being invited to think about contributing to the health and success of a community they’re a part of, and not in any way as an attack on university students.”