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Report: Providence’s proposed tax levy increase clears House; cuts loom if bill not passed

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PBN Staff

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05/28/2025

tLnvrlgL-statehouse-bill — A BILL that would allow for a one-year increase to the city’s property tax cap levy – or the total amount of revenue the city can collect from property taxes – above the state’s usual 4% limit cleared the R.I. House Tuesday. / PBN FILE PHOTO/WILLIAM HAMILTON

PROVIDENCE – A bill that would allow for a one-year increase to the city’s property tax cap levy – or the total amount of revenue the city can collect from property taxes – above the state’s usual 4% limit cleared the House Tuesday. The bill is key to Mayor Brett P. Smiley’s proposed $624.2 million

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PROVIDENCE – A bill that would allow for a one-year increase to the city’s property tax cap levy – or the total amount of revenue the city can collect from property taxes – above the state’s usual 4% limit cleared the House Tuesday. The bill is key to Mayor Brett P. Smiley’s proposed $624.2 million budget for fiscal year 2026 that begins July 1. The spending plan includes a host of tax and fee hikes to help cover a projected $25 million shortfall, which includes a $15 million settlement reached with the city’s schools, WPRI-TV CBS 12 reported. The bill, introduced by Rep. Rebecca Kislak, D-Providence, would grant the city a one-year levy cap exemption for the 2026 fiscal year not to exceed 8%. Smiley has proposed a 7.5% increase in tax revenue compared with the city’s fiscal 2025 budget. The legislation still needs Senate approval. The Senate bill, sponsored by Providence Democrat Sam Zurier was held for further study Tuesday after being heard before the Senate Finance Committee. According to WPRI’s report, Providence Chief Operating Officer Courtney Hawkins sent a letter to city department directors on Tuesday, stating that if the tax levy bill were not passed and signed by Gov. Daniel J. McKee by June 16, the City Council “may not be able to move forward with the first passage of the budget.” The “projected reductions” estimated that about 10% of the municipal workforce would be eliminated across city departments, and would result in more than $7 million in cuts, totaling 92 positions, according to Hawkins’ letter. The cuts would still need to be negotiated with the City Council. Hawkins also wrote that the Parks Department and Department of Public Works could see the biggest reductions in staff. The city proposed eliminating 16 positions in the Parks Department to save $975,358, in addition to 14 positions from the DPW to save $807,352, according to WPRI. Eight civilian jobs from the city’s police department could also be cut for a savings of $473,752, according to the letter. “The purpose of these targets is to assist in framing the magnitude of cuts that will likely need to be made and may change as we work together to balance the budget,” Hawkins said. While the levy cap restricts the overall revenue the city can collect from property taxes, it does not limit the tax rate or the assessed value of individual properties, meaning individual property tax bills could increase by more than the levy cap percentage, as the bills can fluctuate based on changes in property values and the city budget. Budget documents show that valuations across the city increased by 37% on average due to the last property revaluation, meaning that most taxpayers will see higher bills despite paying lower rates. Smiley is proposing a tax rate of $8.25 per $1,000 of assessed value for owner-occupied dwellings and $14.40 for nonowner-occupied dwellings, while the rates for dwellings with six to 10 units would be set at $24.50 and at $27.75 for dwellings with more than 11 units. Property taxes on single-family homes would increase by 4%, or an average increase of $160 per year. Multifamily nonowner-occupied properties with two to five units on average would see tax bills increase by $1,197.47 per year. The commercial tax rate would be lowered to $28.80 per $1,000 of assessed value, leading to commercial property owners seeing their tax bills drop by 2% on average, or about $400 per year. However, Smiley’s proposed budget also increases a host of property tax exemptions, doubling the exemptions for veterans and increasing those for senior citizens by 25%. The budget requires City Council approval and must be signed by the mayor by July 1. A public hearing on the revised budget is scheduled for June 9.